What administration will I need to carry out when I use an umbrella company for my payroll?

When you register with an umbrella company, there is very little administration compared to becoming a director of your own limited company. Continue reading to discover what administration you need to carry out when you use an umbrella company for your payroll.

What administration will I need to carry out when I use an umbrella company for my payroll?

When you register with an umbrella company, there are a couple of administration tasks you need to carry out to use an umbrella company for your payroll. The umbrella company can only legally pay you if you provide this information.

Once you have provided your assignment details, information about your recruitment agency or end client, and personal information such as your address and bank account information, the umbrella company will ask you to provide the following:

• A P45 or a completed starter checklist for PAYE – You must provide a recent P45 to your chosen umbrella company so they can process your payroll using the correct tax code. If you do not have a P45, you can complete a starter checklist for PAYE on the government’s website. This will ensure you are allocated the correct tax code.
• A signed contract of employment – You will be sent a contract of employment, which you must carefully read. The contract will outline the standards and practices the umbrella company expects you to abide by while working as an employee, along with the terms of your employment. When you sign the contract and become an umbrella company employee, you will have access to statutory employment rights, including Maternity/Paternity Pay and Sick Pay. For more information, please visit the government’s website.
• Proof of identity and right to work – You are legally required to prove that you can work in the UK. If you are a British or Irish citizen, you can use the photo page of your passport. Otherwise, please use the government’s online right to work checking service to generate a share code and send this to your umbrella company with your date of birth. If you need to submit any further information, your umbrella company will let you know what they require.

What ongoing administration will I need to carry out when I use an umbrella company for my payroll?

One of the benefits of contracting via an umbrella company is that there is very little ongoing administration you need to carry out when using an umbrella company for your payroll. Once you have registered, the bulk of the administration will be completed.

Depending on your recruitment agency or end client processes, you may be required to submit a timesheet to your umbrella company each week/month detailing the hours you have worked. Not all recruitment agencies or end clients need you to submit a timesheet to your umbrella company. Please check with your umbrella company if you need clarification on the process.

If you are required to submit a timesheet, you must submit your completed timesheet or upload the hours you have worked to your umbrella company each week or month (depending on the payment schedule). If you are not required to submit a timesheet to your umbrella company, you may still need to submit one to your recruitment agency or end client, and you will need to do this by their deadline.

Are you looking for an umbrella company?

Getting paid via an umbrella company is one of the easiest ways to get paid as a contractor or freelancer. The umbrella company will invoice your agency or end client for the hours you have done, process your tax deductions, and pay the required amount to HMRC on your behalf. You will then receive a net payment into your bank account.

To learn more about our umbrella service or request a free and tailored take-home pay calculation, please call our friendly team on 01707 871622. If you are happy with the calculation and want to join Churchill Knight Umbrella, the registration process is easy, and we’re here to help you every step of the way.