Further information about how to tell if your umbrella company are paying you in line with HMRC guidance
Umbrella companies who are compliant with HMRC deduct set percentages from the contract rate we receive, as defined by HMRC.
This includes the umbrella's employment costs, which are deducted to leave your gross pay for tax, which we then deduct your PAYE tax and NI on. We report all these deductions to HMRC, apart from our company margin.
As the company margin is decided by the umbrella company and not HMRC, this will vary between umbrella companies. As a result, your take home pay will not vary very much at all between compliant umbrella companies, as the only difference in deductions will be the cost of the margin charged. If an umbrella company are offering you a take home pay that is higher than other umbrella companies, then you should be very wary of this.
Unfortunately, not all umbrella companies are compliant with HMRC. There are various companies who operate different forms of disguised employment or tax avoidance schemes who market themselves as umbrella companies. HMRC are very aware of these schemes and are actively shutting them down and reclaiming underpaid tax from those who have been using such schemes. You can view further information regarding this, and how to check if the correct deductions are being made to your payslip on the .gov.uk website here:
Nasa Umbrella are committed to compliance, we are regularly audited by HMRC and are also accredited members of the Freelancer & Contractor Services Association (FSCA); the UK's leading professional body dedicated to raising standards and promoting supply chain compliance for the temporary labour market.
There are some helpful resources from HMRC linked below:
- https://www.gov.uk/guidance/responsibilities-for-employment-businesses-working-with-umbrella-companies
- https://www.gov.uk/guidance/working-through-an-umbrella-company
We'd always recommend if you feel you have been part of a tax avoidance scheme (intentionally or not) to contact HMRC to discuss options. These schemes can catch people out, which in turn can add financial strain and stress if funds are due to be paid back. You can find advice online here: