We know that any agency owner wants the best for the contractors they engage. Sometimes they don’t want to lose the contractors they have used for a while and it can be for this reason that Umbrella Company promising more pay or no fee’s become appealing.
But before you enter into such relations, do you completely understand what you are signing up to? Are these promises putting you at risk in the supply chain?
Below are some red flags to look out for and to prompt you to think twice:
- Does the company look legit? Can you verify them with the company they say they are accredited by? Recently an Umbrella Company was claiming to be accredited by Professional Passport, even though they were not. Do your homework.
- Are they claiming to be IR35 compliant? For an umbrella company IR35 does not come in to it, hence why they are popular with agencies as they are safe when it comes to the off payroll working rules. So if they are advertising it, just be careful in case they are covering something up.
- Has it been marketed to you that the contractor will retain a higher percentage of their contract rate? Tax is tax and NI is NI, so how is this possible unless part of the income is being treated as ‘non-taxable’ or allowing contractors to claim expenses such as hotel stays, food etc on a weekly basis which reduces the level of tax that is being paid