Everything you need to know about FCSA accredited Umbrella Companies

Send us your CV

At Xpertise Recruitment we only operate with FCSA accredited umbrellas.

Why?

A compliant Umbrella Company is a great way for a worker to provide services to multiple end customers or agencies, build up employment history, obtain all statutory employment rights as well as additional benefits.

Xpertise Approved Umbrella companies:

NASA Umbrella Ltd

Parasol Ltd

JSA Services Limited

Paystream My Max Ltd

Danbro workforce solutions Ltd

Giant Professional Ltd

Orange Genie Ltd

At Xpertise we take compliance seriously. All the Umbrella companies we work with are assessed and accredited before we partner with them. The ones listed below are our current approved Umbrella partners. Umbrella companies offer a variety of benefits, and you should check directly with them for their current offering and pricing.

What is an umbrella company?

An umbrella company is a separate company that acts as an employer for contractors working on fixed-term contracts. They also serve as an intermediary between the contractor and their end client or agency. Its principal function is to organise payment for the contractor. Recruitment agencies prefer to issue contracts to a limited company as the agency liability would be reduced.

Why use an umbrella company?

Using an umbrella company is the easiest way to get paid for any contractor. However, some circumstances are even more suited to an umbrella company, such as:

Inside IR35 contract roles

New to contracting

Rates at less than £15 per hour or £100 per day

Assignments of three months or less

Most public sector contracts (and from 6th April 2021, many private sector contracts)

Circumstances where a contractor cannot be or does not want to be a limited company director

How is Umbrella Company pay calculated?

If we use the above example of a common supply chain, the recruitment agency will agree an assignment rate with the Umbrella Company via its contract for services.
As with any normal employer, the Umbrella Company has certain costs to cover. These include employer’s National Insurance, holiday pay, apprenticeship levy and pension contributions. The umbrella also retains a small margin for the services it provides. It is important to note that the PAYE rate is the rate that should be discussed with the worker, all the additional costs will be added on top of that rate.
As with any normal employee, statutory deductions would be taken from that pay rate depending on the tax band.

Non-compliant providers:

You should now have a good overview of what an Umbrella Company is, how they operate, calculate pay and the benefits are of working with a compliant company. Unfortunately, they aren’t all like this.
There have always been non-compliant payroll providers on the market. Changes in legislation often creates opportunity for non-compliant firms to take advantage. That is exactly what happened in 2017 when the reform to the public sector off payroll working rules were implemented. Non-compliant indicates a wanton disregard for a suggested path to well-being but fails to acknowledge the mistrust, disruption and inaccessibility.
You can find out how to spot non-compliant companies in the documents linked at the end of this blog.

Any risk to the agency?

Yes. Directors of the agency can be prosecuted under the Criminal Finance Act 2017 where they have been involved in a supply chain containing non-compliant providers operating in the manner described above. Therefore, many agencies like us will have an Approved Supplier List (ASL) of Umbrella Companies they trade with to ensure a compliant, safe supply chain.

FCSA accreditation:

The FCSA accreditation is recognised as the industry’s compliance gold standard. Accredited members can demonstrate the highest standard of compliance in the professional employment services sector. Not only are they required to adhere to FCSA’s Charter, but they are also tested for compliance with FCSA’s standards. Accredited Members have been independently audited by leading accountancy and legal professionals to confirm that they adhere to the rigorous FCSA Codes of Compliance. This stringent test of their business operations is a clear commercial differentiator for Umbrella Companies, contractor accountants and CIS payroll providers, and minimises the risk. FCSA have put together some great guides recently as well which you can access here: