Recruitment Agency Resource Centre

The AUCAE Recruitment Agency Resource Centre is here to help agencies choose a safe partner to work with. An umbrella company engages contract workers under a contract of employment which makes them an effective partner for recruitment agencies; they take on employer responsibilities and account for tax and national insurance contributions for the workers via PAYE.

Dodgy umbrella sounding Take Home Pay claims

However, they don’t all work the same way which makes it difficult for agencies to recommend a compliant solution. It doesn’t help matters when there probably isn’t an umbrella company out there that doesn’t claim to be ‘fully compliant’. But what does it really mean? What should you, as a recruiter, be looking for when you decide which umbrella companies you should recommend a contractor?
If you come across a ‘too good to be true’ scheme, check out the website of the scheme operator. If it is a single page that promises 80-90% take home pay (or even more) without an explanation of how that figure will be achieved it would be best to look elsewhere. The basic rate of income tax is 20% and all umbrella companies retain a margin from the contract value. So it doesn’t take a mathematical genius to work out that the take home figures quoted really don’t stack up. Read More…

Big words that mean little

Despite what you may be told, it is HMRC who decide what can and can’t be claimed as an expense and not an umbrella company. Some companies claim that they have a ‘special dispensation’ which makes their expenses policy different from their competitors – it doesn’t. Read More…

Expenses in general

As a recruiter you will want the best deal for the contractors that you place and phrases such as ‘maximise your take home pay’ are bound to catch your eye when you are looking to recommend an umbrella company. However, in reality, the only difference in take home pay between any umbrella company will be their margin and the levels of service that they provide. Read More…

Travel & Subsistence Expenses

All umbrella companies state that their employees can claim travel and subsistence (meals) costs but can they? Only if they have an over-arching contract of employment in place and only if the contractor intends to work on more than one assignment whilst they are in their employment. Read More…

IR35 (Intermediaries Legislation)

All umbrella companies should pay their workers via PAYE and this is why it is not an issue for their employees. An individual with their own single person Limited Company (or personal service company), whose working practices put them outside of IR35 could draw dividends from their company but that same individual whose working practices put them inside would have to be paid a salary which would be subject to income tax and both employee’s and employer’s national insurance contributions. Read More…

If you believe there is any information missing from the Recruitment Agency Resource Centre pages, then please do get in touch and we will do our best to update these pages.