Following the Matthew Taylor Report on Good work and his recommendation for more transparency PRISM and The Low Incomes Tax Reform Group produced a fact sheet aimed at workers engaged through umbrella companies.
The ‘working through an umbrella company’ factsheet offers guidance to those working through an umbrella company around their tax and employment status and provides practical tips to help them avoid any problems with their pay and deductions. It has been written with the low-paid in mind – recognising the specific risks that they may face when working through an umbrella company – but may certainly be useful more widely.
The factsheet covers a range of issues on which workers are likely to have questions including holiday entitlement and other employment right issues, the availability (or otherwise) of travel expense relief and why they may have been handed over to an umbrella company by an agency in the first place. It includes a helpful diagram explaining how umbrella companies work, a sample payslip to help demystify the sometimes confusing payslip entries and links to more help.
Very importantly, it includes a ‘ready reckoner’ to help workers understand whether the rewards they are being offered through an umbrella company are roughly equivalent to what they might have otherwise received, once the various deductions the umbrella company has to make have been considered. This has been updated to reflect the changes in National Minimum Wage.
Crawford Temple, CEO of PRISM, commented: “Since the launch of this document many providers and recruitment companies now supply this to all workers looking to use umbrella company services. The clarity it brings has resulted in reduced calls to helplines and a broader understanding of associated rights and how an umbrella company operates.”
A copy of the Working Through an Umbrella Company factsheet is available on the PRISM website: https://www.prism.contractors/prism/images/factsheet.pdf.
It is also available from The Low Incomes Tax Reform Group.