Transparency, Trust and Ethics
When it comes to choosing an umbrella company, whether you’re an agency or a contractor it can be a bit of minefield with such a huge number of providers in the market. They range from the small to the very large; some newer entrants and some very established names that have been in the market for 20+ years; and some accredited, some not.
A great place to start is looking at the accredited companies. Whether its Professional Passport or FCSA, having the knowledge that a third party has already audited the operations certainly gives some great assurances. But what else should you be looking at?
The two main areas should be compliance and service. If you’re an agency, ask to speak to some of the umbrella company’s clients, check payslips with corresponding RTI returns, ask for copies of the umbrella company’s VAT account and PAYE statements.
If you’re a contractor, you should be checking you’re not being exposed to potential tax liabilities via a tax avoidance scheme. Although accredited umbrella companies should give confidence that isn’t happening but as a general rule of thumb any umbrella provider offering 80%+ take home pay should be avoided like the plague.
When it comes to seeing what sort of service you can expect, check how accessible the provider is, don’t just check their opening hours, ask how often they run payroll and importantly, ask what time their payroll team finishes (especially on a Friday!). We’re open 8am – 8pm Monday to Friday, and we run payroll up to 8pm. We’re also open 9am – 12pm on Saturdays and can process emergency pays then too.
What other questions should you be asking? A good one is how will the umbrella provider treat your holiday pay. Now this might seem an obvious one, but the devil is in the detail. Some providers default to ‘accrued’ holiday pay – in other words, a percentage of pay is put to one side to build up a holiday pay pot that you can draw down when you need it. Others default to ‘advanced’ holiday pay – so in every pay period, your holiday pay is paid out in advance of you taking holidays and no monies are held back or retained by the umbrella provider. Some providers, like us, offer both to give choice and flexibility. A really important point to drill into, is where an umbrella provider defaults to accrued or offers accrued, you should check what happens to that pot at the turn of the year or when you request your P45/leave. Some companies operate a “use it or lose it” policy, and this is definitely something you should be asking about if they are going to be accruing your holiday pay.
Here at ForeTwo, we take operating both compliantly and ethically very seriously, that’s why we’re FCSA Accredited and a founding member of the Umbrella Leaders Association. Here are ForeTwo, we default to ‘advanced’ holiday pay which means if a contractor hasn’t made up their mind about whether to have accrued or advanced holiday pay by the time their first pay is due, we pay all the monies out in that first pay. With us, contractors can change between the two at any point, and if a contractor has any unused accrued holiday pay when they come to leave, we run a final pay to process the holiday pay pot before issuing the P45. It’s your money, you’ve worked hard for it. Not all providers take this approach, but the name – ForeTwo – actually refers to us putting our two core values (doing things compliantly and delivering a great service to our contractors) at the fore front of everything we do. It’s in our name.
So before signing on the dotted line with your umbrella company of choice, try asking some of the questions suggested above, it might be a bit of an eye opener.
If you would like to know more, drop us a line on 0808 196 9601 or email firstname.lastname@example.org and see how we can help you.