How can you check that your umbrella company payslip and net take home pay figures are correct, comply with UK tax laws, and don’t include any unexpected deductions?
Following several recent high profile cases of unscrupulous umbrella companies ‘skimming’ contractors’ pay, contractors are bound to be extra-cautious when it comes to checking the validity of their payslips.
To the uninitiated, and even to veteran contractors, working out what all the entries on payslips isn’t a simple process.
Fortunately, there are several excellent online tools to help you, including AI-powered auditing tools and government guidance.
We have summarised some of these resources below.
PayePass
PayePass provides supply chain compliance solutions for umbrella companies, and offers a guarantee that verified partners are compliant and will not promote tax avoidance, tax evasion or process payroll unethically (including salary skimming and incorrect processing of holiday pay).
For an umbrella to earn the PayePass Compliance Award, they must pass a series of independent audits that will check they operate compliantly and process their employees’ payslips accurately and transparently. The PayePass website states:
When an umbrella company displays a PayePass Verify Award, it’s a guarantee that our internal team of lawyers, accountants and payroll experts have verified that it has correctly calculated every salary and paid HMRC exactly what is due to it.
Julia Kermode, CEO of PayePass and IWORK, explains the aim of PayePass. She said:
We want a world where the contracting sector is free from the perils of tax avoidance and evasion schemes, mini-umbrella companies, skimming and holiday pay misconduct.
To check if an umbrella company has a PayePass Compliance Award, ask your umbrella.
Verified umbrella companies are assigned a unique ID number from PayePass, and you can check an umbrella company’s status by submitting their ID number into the PayePass website.
Using an umbrella with a PayePass Compliance Award will help you check you are being paid by your umbrella company compliantly and should provide you with the peace of mind needed when working on your assignments.
SafeRec
Despite being new to the marketplace, SafeRec provides AI-powered umbrella company payslip auditing that has quickly grabbed the attention of all parties in the supply chain of temporary workers.
Workers using a SafeRec certified umbrella company can run an audit on all of their payslips to check they have been processed correctly, and the results are generated in real-time.
This type of transparency is new to the sector and will certainly provide contractors with peace of mind.
SafeRec also benefits recruitment agencies because they can keep tabs on every payslip processed for their candidates.
The software provides ongoing compliance reporting and the necessary paperwork to prove compliance with HMRC’s rules and regulations (should HMRC ever launch an investigation).
At the time of publishing this article, 10 umbrella companies are SafeRec certified: We Contract, Umbrellaphant, Ellier, Orca Pay Group, Navigate People, Champion Contractors, Orbital Payroll Group, ClockWork Contracting, Compass Contracting and ForeTwo Group.
The tool is powered by SafeRec and is available to all umbrella employees – not just those using an FCSA accredited umbrella for their payroll.
It is ideal for any umbrella employee who is interested in running a compliance check to ensure they are being paid correctly.
Using the FCSA’s payslip auditing system is easy and contractors can upload a payslip in just a minute or two.
However, results will take up to seven working days which is significantly slower compared to using SafeRec’s software with a certified umbrella, where results will be instantaneous.
The Government’s Income Tax and National Insurance calculator
The guidance includes information on how to check your Income Tax and NI contributions, advice on what to look out for, example payslips, the risk of using a disguised remuneration scheme (non-compliant tax avoidance scheme), understanding what your responsibilities are and how to report an umbrella company you believe is acting unscrupulously.
