FAQs
Are umbrella companies legal?
Yes, Umbrella companies offer a compliant on payroll Pay As You Earn (PAYE) service for contractors and freelancers a good compliant umbrella company will always ensure you pay the correct tax and National Insurance.
What is an overarching contract of employment?
As a Contractor Bureau employee, you’re required to sign an overarching contract of employment. This type of employment contract can link together a series of separate assignments. You become a permanent employee of Contractor Bureau and we provide continuity of employment during and between different contracts.
When do I get paid?
We run payroll Monday to Friday and use the faster payment system. Your contract terms will dictate how frequently payment is made whether that’s weekly, monthly or bi-weekly. We pay you the same day we receive the funds.
What is IR35?
IR35 sometimes referred to as “off-payroll” was introduced in April 2000. The aim is to prevent workers from gaining a tax advantage by using intermediaries (limited companies) when they would otherwise be classed as an employee if the intermediary were not used. If you are deemed inside IR35 you must pay tax and National Insurance through PAYE (PAYE PAY AS YOU EARN) like permanent employees.
How do I know if a contract is inside or outside IR35?
Your recruiter or end client will inform you whether or not the contract or assignment is inside or outside IR35.
Who provides the Contractor Bureau pension scheme?
The Peoples Pension https://thepeoplespension.co.uk/
Can I opt-out of my workplace pension scheme?
You can opt-out only after you’ve been auto-enrolled into the workplace pension scheme. The pension provider will post a joining pack to you and issue you with a customer number. Once you have the customer number you can opt out online.
What insurance is included?
As a Contractor Bureau employee, you have the following cover: £10 million Employer’s Liability insurance, £10 million Public Liability insurance, and £5 million Professional Indemnity Insurance.
Do I need to use a recruitment agency?
Most contractors find work through recruitment agencies but if you find a contract yourself we can engage with your client directly to invoice and pay you.
My pay doesn’t match the original pay illustration you gave me when I signed up.
Your illustration is indicative and usually based on the standard tax code (1257L) when you are registered as a Contractor Bureau employee HMRC sends a new tax code that differs from the standard one this will be reflected in your take-home pay.
I think my tax code is wrong.
If you think you are paying too much tax or your tax code is wrong you should contact HMRC immediately to query it.
Why am I paying both Employer's and Employee’s National Insurance?
If you get paid via PAYE, Income Tax and Employee’s National Insurance will be due on all your earnings. When you work through an umbrella company you will also see a deduction for the Employer’s NI. Even though the umbrella company is seen as your employer (for tax purposes), they do not benefit from any of the work you do and will not pay the Employer’s NI. Equally, your client (whom you carry out the work for) is not your employer and will also not pay the Employer’s NI. Therefore, the Employer’s NI is passed on to you.
Do I pay a joining fee?
No, Contractor Bureau does not charge you to join or to leave. We do not want to hinder your transition to or from umbrella employment in any way we hope that you value our service and refer us to friends and colleagues.
Can I claim travel & subsistence expenses through Contractor Bureau?
The simple answer is no, not for tax relief purposes. Legislation introduced in April 2016 prevents contractors from claiming Travel & Subsistence expenses unless they can prove that they are not under the Supervision, Direction, and Control (or the right thereof) of the end client. We do not process any expenses for tax relief purposes. If you believe you are not under Supervision, Direction, or Control then you can speak directly with HMRC and allow them to confirm your individual situation. If you receive confirmation in writing from HMRC stating they are not under SDC by the client, you will be able to claim tax relief via self-assessment at the end of the financial year.
The advice we have is that if you are deemed inside IR35 the legislation is highly likely to deem that you are under SDC, and as such, no expenses will be allowable. If you do come across an umbrella offering to increase your take-home through tax relief on expenses, then consider that if these are not deemed allowable by HMRC, it is you will be liable for any unpaid taxes, not the umbrella company.