General Questions

As a PAYE umbrella company, we pride ourselves on providing an easy to understand payroll service. Below, we have put together some frequently asked questions to help you understand the role of an umbrella company. Alternatively,  you can contact our expert team using the link below.

What is an umbrella company?

An umbrella company employs freelancers or contractors who complete their contract assignments for client companies. Umbrella companies sit between you (the contractor), and the end client (the recruitment agency or client company).

​If you are within IR35, Unified Payroll, as an umbrella company, will employ you as an employee as you complete your contract with the end client.

​By signing a contract of employment, you become an employee of Unified Payroll, and we become your employer. Our contract of employment includes AWR (Agency worker regulations), HMRC and IR35 legislation, protecting full UK employment rights and ensuring your payroll is compliant with the law.

​As your employer, we manage your payments, deducting tax, pension, holiday pay etc. Our contract is overarching, so you can complete as many contracts as you want without changing employers. Using our umbrella solutions saves you time and effort, leaving you to be in control of what contracts you complete while we handle everything else.

​What does Unified Payroll do?

We take on contractors as our employees with continuous contracts of employment. To meet the rules of ‘continuous’ employment, we follow the Agency Worker Regulations (AWR), HMRC and IR35 legislation requirements.

What umbrella solution is provided by Unified Payroll?

We operate a PAYE (pay as you earn) umbrella scheme for contractors working within IR35 and under the supervision, direction and control of the end client. Contractors working within IR35 will have their income subject to the following deductions:

  • ​PAYE Tax
  • NI Contributions (including Employer NI)
  • Apprenticeship Levy
  • Pension Contributions
  • Holiday Pay
  • Student Loan Repayment, and
  • Any other statutory deductions required. All net wages due to you as the worker are paid into your personal UK based bank account in GBP (Pound Sterling). We do not pay in any other currency neither do we pay off-shore or engage contractors who work outside the UK.

If you are outside IR35, our experienced team can offer advice and alternative solutions.

How does an Umbrella company work?

​Unified Payroll will sign a contract with your recruitment agency, and you will sign an employment contract with ourselves. At the end of your assignment or shift, timesheets (usually provided by your recruitment agency) will be completed so that exact hours and pay can be correctly calculated. Your timesheet is submitted to Unified Payroll and your recruitment Agency, so both parties have a record of the completed work.

​How do contractors get paid through an Umbrella company?

Unless your agency has a self-billing agreement with us, we will raise an invoice with your recruitment agency for the hours you have worked, as well as any expenses that the end client has agreed to reimburse. The recruitment agency will then invoice the end client based on the hours you have worked. The end client will later pay the agency who will, in turn, pay us.

​Your recruitment agency’s pay schedule determines the date of payment. Once your recruitment agency sends payment Unified Payroll pays directly into your bank account using our PAYE system. We email you your payslip, which will detail your received income, minus all statutory deductions mentioned above and the umbrella margin.

Are statutory employment entitlements included in your employment contract?

Being an FCSA and professional passport PAYE umbrella company, we pride ourselves on following the law. Once you sign our contractor employment, you will be entitled to:

Statutory Sick Pay (SSP)
Should you be off work for more than four consecutive days with a valid GP note, we will initiate a statutory sick pay on your behalf. The standard rate for SSP is £94.25 per week (2019-20). SSP will be paid on your usual payment date.

Statutory Maternity Pay (SMP) & Statutory Paternity Pay (SPP)
Qualifying criteria must be met before you can apply for Statutory maternity and Statutory Paternity Pay. The current rate is £148.68 per week for both.
For Statutory maternity pay, the main criteria is continuous employment with your employer for a minimum of 26 weeks before the qualifying week (15th week before your due date).

​How will my holiday pay be calculated?

You have the right to 28 days paid leave, including bank holidays (although you could be entitled to more under Agency Worker Regulations). If you work on a casual basis or very irregular hours, your holiday entitlement will be calculated as a percentage of your hours, so 28 days holiday per year is equivalent to 12.07% hours. We then use 12.07% to calculate your holiday entitlement per hour or days worked.

​Can I get my holiday paid in different ways?

There are two ways we can pay your holiday pay this to you:

Rolled Up Holiday Pay - Your Holiday Pay is included upfront with each payment you receive. Rolled-up holiday pay means you get payment in advance for the time you may take off as holiday, and you won’t be directly paid when you decide to take a holiday. This is calculated on your gross taxable pay.

Please note - This is the default method used by Unified Payroll.

​Can I get my holiday paid in different ways?

There are two ways we can pay your holiday pay this to you:

Rolled Up Holiday Pay - Your Holiday Pay is included upfront with each payment you receive. Rolled-up holiday pay means you get payment in advance for the time you may take off as holiday, and you won’t be directly paid when you decide to take a holiday. This is calculated on your gross taxable pay.

Please note, this is the default method used by Unified Payroll.

Held Back Holiday Pay - Holiday Pay can be held back in a ‘Holiday Fund’ which you can apply for when you do take time off. We calculate 12.07% of your gross taxable income and retain this amount gross. This gross amount will be taxed when you take a holiday and get your holiday pay. You will need to inform us when you would like this paid out via email.

Holiday pay can be released as a weekly value, a combination of weeks that you have accrued or as total accumulated holiday paid.

For example:

Week 1 - £45.50 holiday pay retained
Week 2 - £65.50 holiday pay retained
Week 3 - £45.50 holiday pay retained

If you decide to take a holiday in Week 4, you can request an individual weeks value (week 1 = £45.50), a combination of the weeks accrued ( weeks 1 and 2 = £111) or the total accumulated holiday paid (Week 1, 2 & 3 = £156.50).

​I heard I can claim some relief on my travel expenses?

Before April 2016, you could claim tax and National insurance contributions (NIC) relief on the costs of getting to and from your assignment locations. With IR35 changes, anyone working under the ‘supervision, direction or control’ of their end client will no longer be able to do this.

Many contractors fall within IR35, so it is difficult for low paid workers to qualify for home to work expenses relief unless the travel expenses are incurred while working, as opposed to getting to work (e.g. going to a client meeting/visit). Where you use your car for such travel, you may be able to claim tax and NIC free ‘mileage’.

​Why should I enrol with Unified Payroll?
  • Our onboarding process is fast, simple and informative.
  • ​A fully compliant PAYE Umbrella scheme following HMRC, IR35 & AWR regulations.​​
  • ​One of the few Umbrella companies with FCSA and Professional passport accreditation.​
  • ​We run multiple pay runs daily using same day faster payments to make sure you are paid on time, every time.​
  • ​We provide a take-home pay illustration based on a contractor's circumstances, so you know your possible take-home amount before you register with us.​
  • ​Expert customer service team advising about IR35, HMRC and payroll.​
  • ​We manage all administration, so you don't have to.​
  • ​We offer a low, competitive umbrella margin.
  • ​​No joining or exit fees.​
  • ​​We send out weekly payslips to your email address.​​​
  • ​​We send out a text message (SMS) to your mobile once the money has been transferred to your bank account.​​
  • ​If you choose to enrol in a pension, our pension scheme uses the government-backed provider Nest.​​
  • ​Each contractor has online access to see how their pension contributions grow.​
  • ​Our contract of employment protects your full statutory benefits including sick pay, maternity, paternity & holiday Pay.​​​​​​​​
  • ​Reduced paperwork, all documents are completed and signed online (including the contract of employment).
  • ​​​References provided for mortgages, tenancy agreements and other requirements.

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