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Google is a wonderful tool. However, searching for your next umbrella is not as simple as searching for “umbrella company” and opting to join the first provider you discover. In this short article, we provide some helpful tips to help you search online for an umbrella company you can trust.
Having run a simple search on Google for “umbrella company” (11:40 on 25/09/2024), it’s alarming how many sponsored adverts appear at the top of the results page. The companies behind these adverts are not umbrella companies. Instead, they’re comparison websites that target contractors and encourage them to source an umbrella through their company. Yes, there are plenty of compliant and ethically-driven umbrella company comparison websites out there and these do provide a valuable service. However, be careful. Some make misleading claims.
Take, for instance, a Google advert for an umbrella company comparison website that claims, ‘Don’t let IR35 hurt your bank balance’. This statement is misleading. Umbrella companies are a suitable payroll solution for temporary workers operating inside IR35. Therefore, it’s crucial to understand the implications of IR35 and the difference between being ‘inside’ and ‘outside’. If you’re inside IR35, you must receive payments to a personal bank account with Pay As You Earn (PAYE) – HMRC’s tax system (ensuring all legal tax and NI deductions are processed). There are no legal alternatives, and engaging in a tax avoidance scheme could lead to severe penalties.
Another advert by an umbrella comparison site suggested that using their brokerage will help temporary workers get the “highest take-home pay”. However, every compliant umbrella company in the UK will process payroll identically – following the same processes and procedures to ensure you receive PAYE into your personal bank account.
The only factor that will see your take-home pay differ between compliant umbrella companies is the margin the umbrella deducts each time your payroll is processed. For example, suppose you were to use two umbrella companies simultaneously for the same payment (not possible, but a helpful scenario for this example), and both had a £20 per week margin. In that case, you should expect to receive the same amount of money from both – to the penny.
Searching for an umbrella company online is still a great way to identify your next umbrella company, but be vigilant
We don’t need to write a piece about how magnificent the internet is. However, when it comes to searching for an umbrella company, the internet can often lead contractors and freelancers down a risky path. Here are some online resources that we recommend you use when searching for an umbrella company:
The FCSA’s online directory of members
The Freelancer and Contractor Services Association (FCSA) is the UK’s leading professional body committed to ensuring the supply chain of temporary workers complies with HMRC’s rules and regulations. For an umbrella to obtain FCSA membership, it must undergo a series of strict audits and assessments to ensure that it operates compliantly, meets the highest standards of compliance, and continues to do so throughout its membership (all members are audited annually to ensure they continue to comply with the FCSA’s Codes of Compliance).
On the FCSA’s website, there is a list of FCSA accredited umbrella companies. This is a great place to start your search for your next compliant and ethically-driven umbrella company. The FCSA’s umbrella company directory is available here.
It’s worth noting that some comparison sites may state they only refer to umbrella companies with FCSA accreditation. However, this may not be accurate. Always check that an umbrella is on the FCSA’s official website.
SafeRec certified umbrella companies
If you’ve visited the Churchill Knight Umbrella website before, you’ll have noticed a lot of content about SafeRec – revolutionary software that has allowed ethically-driven umbrella companies to provide their compliance to temporary workers and staffing agencies.
Simply put, SafeRec certified umbrella companies provide employees with an automated payslip audit every time they are paid. The audit reviews all the deductions (PAYE) to ensure that everything is above board and any potential signs of non-compliance are flagged for the worker to see. These audits are also shared with recruitment agencies – allowing them to refer candidates to umbrella companies that can prove they operate how they should.
Despite being relatively new on the scene, the number of SafeRec certified umbrella companies is growing quickly. The SafeRec website includes a directory consisting of certified umbrella companies, and it’s another great place to start your search for your next compliant umbrella company.
Trustworthy online directories and resource platforms
There are plenty of reliable and well-respected online platforms and contractor-focused websites that aim to help temporary workers make well-informed decisions about their payroll. Here are a few that you may find helpful when searching for a trustworthy umbrella company:
Tips to help you identify a compliant umbrella company
- IR35 – Understand that when you use an umbrella company, you will be paid “inside IR35”, meaning that you’ll receive PAYE to your personal bank account.
- Umbrella company processes – Learn how compliant umbrella companies will process your payroll. We have written a guide that you may find helpful, available here.
- Accreditations and certifications – Only consider engaging with umbrella companies that have an accreditation from the FCSA, or certification from SafeRec. These bodies ensure that accredited members (umbrella companies) abide by the highest standards.
- Tax avoidance schemes – Identify the warning signs of tax avoidance schemes and the dangers of engaging with them. Tax avoidance schemes should be averted at all costs. There is plenty of guidance available online, including HMRC’s list of named tax avoidance schemes.
- Online reviews – Online reviews are extremely important. Before you join an umbrella company, make sure they’re well-established and have positive online reviews from real contractors and freelancers. For example, now is the perfect time to mention that Churchill Knight Umbrella is accredited by the FCSA and certified by SafeRec, and our Trustpilot score is 4.8/5.0 and Google rating 4.4/5.0 (with over 700 reviews combined, accurate on 26/09/2024).
- Umbrella company calculations – Before you join an umbrella, request a tailored take-home pay calculation. This will show how the umbrella will process your payroll. Check for all the legal deductions, including income tax, National Insurance, etc. If an umbrella is offering noticeably higher than a majority of others, they’re almost certainly not running accurate calculations (to trick you), or they’re operating non-compliantly.
Churchill Knight Umbrella
Churchill Knight Umbrella is a compliance-driven umbrella company with FCSA accreditation and SafeRec certification. We’re extremely proud of the service we provide temporary workers in the UK. Every week, we process thousands of payslips and all our employees have access to AI-generated payslip audits, thanks to our SafeRec certification.
Registering with Churchill Knight Umbrella is easy and our professional team is here to help you along the way. All our employees can benefit from:
- Specialist support throughout the onboarding process – To ensure you are entirely satisfied with the registration process and your first payment.
- Ongoing support – Our Customer Support Department is always contactable (during business hours) via the phone or by email.
- Exceptional value – Our umbrella service is extremely competitive! Contact us today for our very best margin.
- Free insurance cover – Included in our service is £10 million Employers Liability Insurance, £10 million Public Liability Insurance and £5 million Professional Indemnity Insurance. If you require a higher level of insurance, please get in contact with us.
- Same Day Faster Payments – We’ll process your payroll on the same day we receive funds from your recruitment agency/end-client.
- Employee Benefits – Including Statutory Sick Pay and Statutory Maternity/Paternity Pay.
- Salary sacrifice – Churchill Knight Umbrella is one of the few umbrella companies in the UK that offers salary sacrifice for pensions. This may be the perfect solution for contractors and freelancers who want to tax-efficiently boost their personal pension pot.
- Churchill Knight Rewards – We can offer a special Employee Reward Scheme called Churchill Knight Rewards. When you opt in, you will have access to an array of benefits, including reduced gym membership, 24/7 GP helpline, BP fuelcard, discounts when shopping online, reduced meals at popular restaurants, and more!
Please contact our Sales Professionals today for a free, accurate umbrella company calculation. You can call us on 01707 871622, or schedule a call for a convenient time by completing the short form here.
We're regularly adding new, helpful content
The Churchill Knight blog is regularly updated with helpful content for contractors and freelancers – especially articles that answer the most frequently asked questions about umbrella companies! Please pop back shortly to see the latest articles written by Andrew Trodden (Marketing Manager) and Clare Denison (Marketing Executive).