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How do you register with an umbrella company?

There are a number of steps to complete when you register with an umbrella company. Here, we explain how each step in the process works – and what to look out for.

Before you register, do your homework!

With over 500 umbrella companies in the UK, how do you know which one is right for you?

Start with our popular guide – 20 things to consider when you compare umbrella companies.

Request a take home pay calculation

When you have identified a handful of umbrella companies you’d like to know more about, ask them for a tailored take-home pay calculation.

This is a good opportunity to see your earning potential and if the umbrella companies are dependable or unscrupulous.

All compliant umbrella companies should process your payroll in the same way.

They all operate Pay As You Earn (PAYE) – HMRC’s tax system. Therefore, if you choose two umbrellas with the same margin – £20 per week, for example – they should also quote an identical take-home pay amount.

However, a few umbrellas have been known to manipulate their calculations, to present an inflated take-home figure. It’s only natural that you would be drawn to the umbrella that’s offering you the highest pay retention, but don’t be fooled!

If you see an unusually optimistic projection, challenge the umbrella company and see how they justify it.

Accurate projections consider the following; your tax code, hours per week/month, rate of pay, student loan deductions, pension contributions, and the umbrella margin.

Start the registration process

Once you have identified the right umbrella company – take a moment to give them one final review. Are they compliant? Do they have good feedback and a stellar reputation? How long have they been operating? Is the margin competitive? Have they made you feel comfortable and explained everything thoroughly?

Assuming you’re happy to go ahead, here is what you should do:

  • Contact the umbrella’s sales team and let them know you want to join. Alternatively, you can send the umbrella an email or contact them via the site to request a call at a convenient time.
  • Perhaps you will want to run through another pay calculation before giving the umbrella company the green light.
  • Provide the umbrella with your personal information. This is required by law and will include your full name, address, date of birth, nationality, bank details, assignment details, details about your agency/end-hirer, and more.
  • In many cases, you’ll need to acknowledge a disclaimer explaining some of the umbrella company’s policies. Read this carefully.

Provide your personal information / ID

Before an umbrella company can officially register you as a new employee, they must have proof of your ID (drivers’ licence, passport, visa, etc.)

You should be fine to send a photograph of your document(s), assuming the quality is high and no corners are cut out.

The umbrella will also ask you for your P45.

If you have it – great. Send it across, and the umbrella will ensure you’re put on the correct tax code.

However, if you don’t have a P45 – don’t worry.

Instead, you need to submit a New Worker Checklist – this is a short, easy-to-complete government document.

Your umbrella will help you do this. However, you must complete this form as early as possible as failure to submit it before your first payday could result in you paying tax at the emergency tax code.

Be aware of the background processes

Most contractors join an umbrella company after securing a contract via a recruitment agency. If this scenario applies, the umbrella and agency must sign an overarching contract that allows your funds to be passed down the supply chain.

Although it’s unlikely, every so often inefficiency in the supply chain can result in delayed payment, even when the worker has successfully completed the umbrella company registration process.

Therefore, make sure you keep in touch with your agency, and don’t be afraid to chase them if you have any concerns.

Review the umbrella company’s contract of employment and sign if you are happy

The last piece of the umbrella registration process is the umbrella company’s employment contract.

It’s imperative you read this thoroughly and are entirely happy before you sign and return it.

Most modern umbrella companies will allow you to sign and submit the employment contract online.

When you sign and return the employment contract, you officially become an employee of the umbrella company.

This is the final step in the umbrella company registration process.

The remaining processes to ensure you’re paid on time

Now that you’ve joined an umbrella, make sure you’re familiar with the processes involved that’ll ensure you’re paid on time.

For example, check the timesheet submission process because you won’t be paid when you expect to be without submitting timesheets.

Most umbrellas operate in the same way (or very similar) but make sure you know what you need to do from the beginning to avoid unpleasant surprises down the line.

Switch umbrella if you’re not happy with the service

Switching umbrella companies may sound like a stressful concept, but it’s worth it if you’re not receiving a good level of service.

Although it may take you a while to switch, it could save you time, money and reduce your stress levels.

If you’re unhappy with the current umbrella provider, tell them that you want to leave and, request your P45.

Contact the new umbrella you wish to join, and they’ll guide you through the registration process again (as detailed in this article).

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Last updated: 8th March 2024