Contractors Umbrella Guide for - Unified Payroll
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Umbrella Guide for Contractors
Table of
Contents Please click the section headings below to
view content for each section.
03 Introduction to Unified 03 Umbrella Companies
Payroll Explained
04 Why You Should Use 06 The Enrolment Process
Unified Payroll?
07 Required Documents 09 Your Employment
to Join Unified Payroll Contract Explained
12 IR35 Explained 13 Payslip and
Reconciliation
Statements Explained
16 Expenses Policy
2 Unified Payroll
About Us
Trusted by contractors all over the We also run multiple pay runs, so your
country, Unified Payroll is one of the UK’s payments are delivered on time, every
leading PAYE (Pay as you earn) umbrella time. All payments to contractors are
companies. We have over ten years of processed on-shore to a UK based bank
experience providing stress-free payroll account that is denominated in British
services for contractors, freelancers, and pound sterling.
recruitment agencies.
Our dedicated compliance and customer
Our umbrella company is professional and service team has extensive experience in
trustworthy while following HMRC assisting with all your queries. Whether
guidelines. Using our umbrella solution you have questions about PAYE,
means your payments and tax deductions Umbrella companies, IR35 or switching
are accurate, leaving you with peace of to us, our team is here to help. Our
mind. versatile approach to support, will ensure
you receive tailored support so if you
prefer to speak to a specific account
manager or team member, we will adjust
What is an
accordingly.
umbrella company?
An umbrella company employs
freelancers or contractors who
complete their contract assignments for
client companies. Umbrella companies
HMRC guidelines, while including
sit between you (the contractor), and
AWR (Agency Workers Regulations)
the recruitment agency or client
and IR35 legislation, ensuring your
company.
payroll is compliant with the law.
If you are within IR35, Unified Payroll,
As your employer, we manage your
as an umbrella company, will employ
payments, deducting tax, pension,
you as an employee as you complete
holiday pay and other deductions
your contract with the end client.
required by law. Our contract is
By signing a contract of employment, overarching, so you can complete as
you become an employee of Unified many contracts as you want without
Payroll, and we become your employer. changing employers. Using our
Our contract of employment follows umbrella company solution saves you
time and effort, leaving you to be in
control of what contracts you
complete while we handle everything
else.
Unified Payroll 3Why use
Unified Payroll?
Quick and simple on boarding process As a compliant umbrella company we
follow all HMRC guidelines. If an
Our on boarding process is simple, umbrella company does not follow
informative and fast. Inform our team HMRC guidelines, it will result in
that you want to use our services, send HMRC recovering unpaid taxes from
the required documents, and we can you as the contractor.
have you set up on the same day.
Free take-home pay illustration Full employee benefits protected
We provide a free take-home Our contract of employment includes
pay illustration based on your full statutory benefits including sick
circumstances, so you know your pay, maternity, paternity & holiday pay.
possible take-home pay before you No matter what contract you carry out
join us. your statutory benefits are protected.
Access to Unified Loyalty Perks Faster payments & pay notifications
We run multiple pay runs daily using
As a contractor using our PAYE
same day faster payments to make
umbrella payroll company, you get
sure you are paid on time, every time.
automatic access to Unified Loyalty
We also email you your payslips and
Perks with online shopping vouchers
send text message alerts, to let you
and discounts at over 7,500 high
know when you will be paid.
street retailers.
An expert customer service team
We manage all the admin
As part of our umbrella solution, you
We operate a PAYE umbrella scheme
have access to our expert customer
for contractors working within IR35,
service team, who can assist with
making life simple and easy. As your
questions about IR35, umbrella
umbrella company, we process all
companies, expenses and our services.
HMRC deductions, pension and
We personalise our service to your
holiday pay, so you do not have to be
needs so whether you want a specific
involved with any admin.
account manager, or you want to speak
A compliant umbrella company to anyone in the team, our expert team
will always help.
As a contractor, your umbrella
company must follow HMRC
guidelines when processing your
payments.
4 Unified PayrollCompetitive umbrella company Margin
Useful
We have a low, competitive umbrella
margin. Contacts
No joining or exit fees
We don’t have any joining or exit fees,
so using our service is straight
forward and hassle-free.
Customer
Service Team
Pension contributions sorted with no
hassle 01268 669979
07727 676427
Our chosen pension scheme is the
government-backed pension provider info@unifiedpayroll.co.uk
Nest, so if you wish to contribute
towards your pension, we will enrol
you so you can continue to work
without any worries.
References provided for bank loan Sales Team
applications
07543 220308
We provide references for mortgages, 07543 219347
tenancy agreements and other
financial applications. sales@unifiedpayroll.co.uk
How do I join Unified Payroll?
Joining Unified Payroll as an umbrella
company is straight forward and easy.
All you need to do is;
Payroll Team
Email our team on 01268 669979
sales@unifiedpayroll.co.uk payroll@unifiedpayroll.co.uk
Or give us a call on
01268 669 979
Unified
Unified
Payroll
Payroll
2020 5What is the joining
process for Unified Payroll?
• You choose to sign up with • We sign the agency/client
Unified Payroll, providing your company contract and return it to
details, right to work and P45/ your agency/client company.
P46.
• We issue you with an Assignment
• Your ID documentation is Schedule. This schedule outlines
verified by our compliance team, the particulars of your
completing your assignment, including pay rate,
enrolment. start/end date and any notice
period you need to adhere to with
• We send out your Unified Payroll the end client.
Umbrella – Employment
Contract using EchoSign, an • You submit your timesheets to
electronic contract system you your recruitment agency/client
use to sign the contract. This company weekly.
overarching employment • We raise invoices with your
contract states all your recruitment agency or client
employment rights and benefits. company based on your
• We contact your agency or client timesheets.
company and request an agency/ • You receive a text message when
client company contract. The payment is sent to your account.
agency contract shows the terms
with which we engage with your • Your payslip is sent to you by
agency on your behalf. email.
Please note: We will not be able to process timesheets that are
older than two weeks before enrolling with us.
6 Unified PayrollRequired Documents to start
working with Unified Payroll
What required documents do I need
to provide? 2. Confirmation of National
Insurance number
1. Right to work documentation
Examples of acceptable
If you are a British Citizen, this documents include:
includes:
HMRC Notifications or
• A Valid Passport (copy of Documentations, payslips,
Front cover and photograph P60, P45 or plastic National
page) Insurance card.
• or a Full Birth Certificate (not 3. Proof of Bank account
the short version)
Examples of acceptable
• and a copy of National documents include:
Insurance confirmation from
HMRC. • A Bank statement,
• A photocopy of your bank
If you are an Overseas National, card,
there will be an additional
requirement, this includes: • or a screenshot of your online
banking account including
• A valid residency permit, with account number, sort code,
proof that you can reside and name and address.
work in the UK,
4. Two documents showing Proof of
• or a current Biometric Address
Immigration Document,
• or a current immigration Examples of acceptable
status document with documents include:
Photograph.
• Mortgage Statement or
For more details, please request a a Mortgage Redemption
Right to Work checklist. Statement (acceptable for 12
months from the date shown
Unified Payroll 7on the statement) on the statements)
• Recent Utility Bill – can be • Letter from a Solicitor
Gas, Electric, Water, confirming completion of
Telephone (acceptable for a house purchase or land
three months from the date registration
shown on the bill)
• Official Documentation from
• Council Tax Bill (acceptable Her Majesty’s Revenue and
for 12 months from the date Customs (excluding P60s)
shown on the bill, current (these are acceptable for 12
year) months from the date shown
on the documentation)
• House or Motor Insurance
Certificate (12 months from • Credit Card Statements
the start date of the policy) (acceptable for three
months from the date shown
• Current Full UK Driving on the bill)
Licence
• Tenancy agreement (within
• UK/EU Photocard Driving 12 months, current)
Licence (must be current)
5. P45 of your last Job/Umbrella
• Current State Pension Payroll provider
Book or Notification Letter
(acceptable for 12 months Your P45 will ensure your tax
from date of the letter) code is correct, resulting in
correct and constant deductions.
• Benefits Agency Book
(current) or letter from the If you have any questions
benefits agency (acceptable regarding validity or allowance
for 12 months from the date of any documentation, please
of the letter) contact our customer service
team who can help.
• Local Authority Rent Card
(current) Please note – We will not be able
to progress your enrolment or
• Rent Book or Tenancy pay any timesheets until you
Agreement have provided us with your
identification documents, and
• Bank Statement, Building these documents have been
Society Statement, Credit verified and checked by our
Union Statement or compliance team.
Passbooks (acceptable for
three months from the date
8 Unified PayrollYour Employment
Contract Explained
What is an agency contract? employees, including pay and any
annual leave above the minimum 28
An agency contract is a signed contract
days required by law. Your assignment
between Unified Payroll and your
can not be ended as you get near 12
recruitment agency showing the
weeks of continuous work.
terms for how we engage with your
recruitment agency on your behalf.
Are statutory employment
Once an agency contract is signed,
entitlements included in my
we issue you with an ‘Assignment
employment contract?
Schedule’. Our assignment schedule
outlines the particulars of your
Yes, our employment contract ensures
assignment, including pay rate, start/
you have the same rights as any other
end date and any notice period you
employed person. Your statutory
need to adhere to with the end client.
employment entitlements include:
What is my employment contract?
Statutory Sick Pay (SSP)
Your employment contract is your
Should you be off work for more than
overarching employment contract with
four consecutive days with a valid GP
Unified Payroll containing all of your
note, subject to qualification, we will
employment rights and benefits. You
initiate a statutory sick pay on your
can sign this quickly and electronically
behalf. The standard rate for SSP is
using echo sign.
£94.25 per week (2019-20). Statutory
sick pay is paid on your usual payment
Are Agency Workers Regulations
date.
included in my employment
contract?
Statutory Maternity Pay (SMP) &
Our contract of employment covers Statutory Paternity Pay (SPP)
Agency Workers Regulations. Agency
Qualifying criteria must be met before
Workers Regulations (AWR) ensures
you can apply for Statutory maternity
that contractors get equal treatment
and Statutory Paternity Pay. The
compared to end client’s internal
current rate is £148.68 per week for
employees. For example, you should be
both.
allowed to use any shared facilities (e.g.
a staff canteen or childcare) from the
For Statutory maternity pay, the main
first day you work for your end client.
criteria is continuous employment
with your employer for a minimum of
After 12 weeks continuous
26 weeks before the qualifying week
employment in the same role, you
(the 15th week before your due date).
should get the same terms and
conditions as the end client’s internal
Unified Payroll 9Holiday Pay
You have the right to 28 days paid • an individual week’s value (week 1
leave, including bank holidays = £45.50),
(although you could be entitled • a combination of the weeks accrued
to more under Agency Workers (weeks 1 and 2 = £111)
Regulations).
• or the total accumulated holiday
paid (week 1, 2 & 3 = £156.50).
If you work on a casual basis or
very irregular hours, your holiday
Please note:
entitlement is calculated as a
percentage of your hours, so 28 days Held Back (Accrued) Holiday Pay is
holiday per year is equivalent to the default method used by Unified
12.07% hours. We then use 12.07% to Payroll.
calculate your holiday entitlement per
hour or days worked. Rolled Up Holiday Pay
Your Holiday Pay is included upfront
Can I get my holiday paid in different with each payment you receive. Rolled
ways? Up Holiday Pay means you get paid in
There are two ways we can pay you advance for the time you may take off
your holiday pay; this is shown below: as holiday, but you won’t get paid when
you decide to take a holiday. Rolled-up
Held Back (Accrued) Holiday Pay holiday pay is calculated using your
- Holiday Pay can be held back in a gross taxable salary.
‘Holiday Fund’ which you can apply for
when you take time off. We calculate Please note:
12.07% of your gross taxable income You will have to request Rolled Up
and retain this amount gross. This Holiday Pay, as your Holiday Pay
gross income will be taxed when you method.
take a holiday and get your holiday pay.
You will need to inform us when you How do I save towards my pension?
would like this paid out via email.
All eligible contractors with Unified
Payroll will be auto-enrolled into our
Held back (Accrued) Holiday Pay
pension scheme with government-
can be paid as a weekly value, a
backed pension provider NEST.
combination of weeks that you have
You will be auto-enrolled into our
accrued or as a total accumulated
pension scheme after 12 weeks of
holiday amount.
continuous employment with Unified
Payroll. To be enrolled in our pension
For example:
scheme, you must be;
Week 1 - £ 45.50 holiday pay retained
• Aged 22 or over and under state
Week 2 - £65.50 holiday pay retained
pension age,
Week 3 - £45.50 holiday pay retained
• And your earnings must be more
than £182 gross in the week you
If you decide to take a holiday in Week 4,
are assessed.
you can request:
10 Unified PayrollPlease note: What happens if I no longer need an
Umbrella company?
You must first be enrolled and make a
contribution before you can opt-out of
If you get a permanent role or want
your pension.
to leave Unified Payroll for any other
reason, the process is straightforward.
What happens if I change my
There are no exit fees, so all you need
recruitment agency or client
to do is request your P45 by email from
company?
your account manager.
Unified Payroll can work with any
agency in the UK, so no matter the Please note the following when you
contract, your employment with request your P45:
Unified Payroll continues. Notify
sales@unifiedpayroll.co.uk with the Your final payment must be processed
details of your new agency contract, and paid to you by Unified Payroll
and we’ll do the rest. before a P45 can be issued.
Each agency is different, so please The payroll period relating to your
make sure you are aware of your new final payment will need to have passed
agencies payment processes and before we can process a P45 (e.g. if you
whether they are self-billing or need are paid in tax week 37, the earliest we
invoices from Unified Payroll. can issue a P45 is week 38).
Unified Payroll 11What is IR35?
IR35 is the UK anti-tax avoidance • Student Loan Repayment, and
legislation coming into effect April • Any other statutory deductions
2021. The pending IR35 changes required.
are designed to combat what HMRC
saw as tax avoidance by disguised How does IR35 affect contractors?
employees and the firms hiring them.
HMRC discovered that If your job role is inside IR35, you will
disguised employees were using need to be paid with HMRC deductions
limited companies to avoid tax when via a PAYE umbrella company, if your
in practice, they were working as client company do not wish to use their
employees for client companies. internal payroll.
Contractors working within IR35 and Recruitment agencies or client
under the supervision, direction and companies cannot blanket assess job
control of the client company will status’s, so if you have any doubt, our
have their paid income subject to the experienced team can offer advice.
following deductions:
Please note:
• PAYE Tax
The pending IR35 changes, affecting
• NI Contributions (including
private sector contractors, come into
Employer NI)
effect April 2021.
• Apprenticeship Levy
• Pension Contributions
• Holiday Pay
12 Unified PayrollPayslip and reconciliation
statements explained
Agency Workers Regulations protect
your pay • Employer pension contribution
• and Umbrella margin
Agency Workers Regulations state
that after 12 weeks’ continuous Employment costs are shown in red in
employment in the same role, you the example reconciliation statement
should get the same terms and below.
conditions as the end client’s internal
employees, this includes your pay. Gross Placement Income - This is the
gross income we get from your agency
For example, if the end client’s internal or end company for the work you have
employee is paid £660.97 after-tax, completed. This income is increased,
you as a contractor must be paid the taking employment costs into account.
same, so your net pay is £660.97. Once employment costs are deducted
from your placement income, you will
What are the deductions on my payslip? get the same net pay as the end clients
internal employee.
As a PAYE umbrella solution
following HMRC guidelines, we Effective gross income - This is the gross
display employment costs and HMRC placement income with employment
deductions clearly on your payslip. costs deducted.
Please find the explanations to payslip
deductions below. Employee taxes
These are the HMRC deductions; this
Employment costs
includes tax and employee national
To pay you as an employer, your insurance. Employee taxes are shown
recruitment agency or client company in blue in the example reconciliation
passes on the cost of employing you statement below.
over to us.
Net Pay
Employment costs include:
This is the take-home amount paid to
you after all tax and national insurance
• Employers National Insurance
have been deducted.
• Apprenticeship Levy
• Holiday Pay
Unified Payroll 13Example Reconciliation Statement
Gross Placement Income £980.00
Less employment costs
Employers NI (National Insurance) (£94.30)
Apprenticeship Levy (£13.00)
Employer Auto enrolment pension contribution (£38.00)
Unified Payroll Umbrella Margin (£18.00)
Less employee taxes
Total employment costs deducted £161.80
Effective Gross Income before Tax £818.20
Employees NI (National Insurance) (£88.43)
PAYE (£68.80)
Net Salary £660.97
14 Unified PayrollExpenses Policy
(Mileage only)
All payments of mileage expenses are at the sole discretion of Unified Payroll Ltd.
Expenses must be claimed using our expense claim form or online expense claim
portal. All claims are subject to checking and authorization. You may be required to
reimburse claims which cannot be verified.
Supervision, Direction or Control (SDC) and multi-site
All Unified Payroll employees work under the supervision, direction and control of
the end client and are therefore caught by SDC rules.
Contractors caught by SDC cannot claim any expenses. The only exception would
be workers that travel to multiple sites during their working day, who may be able to
claim mileage between some of the sites.
Temporary workplace
All mileage costs must be incurred on travel to or from a temporary workplace. A
temporary workplace is somewhere you go to perform a task of limited duration or
for a temporary purpose.
If you are likely to spend more than 40% of your working time at a site for more
than 24 months, it cannot be a temporary workplace. If the temporary site is the
only site, you are likely to be working at for the end client, during your contract, you
cannot claim.
You also can not claim expenses if:
• You are not moving between locations, or if you are not expected to move to
another site for the same end client, when this temporary workplace finishes.
• If you are in doubt about whether your site is a temporary workplace, please
contact our customer service team.
Mileage
You can claim expenses for using your vehicle, using the HMRC guideline rates,
shown below:
Vehicle First 10,000 Over 10,000 Passenger
business miles business miles rate
Car or Van 45p/mile 25p/mile 5p/mile
Motorcycle 24p/mile 24p/mile -
Bicycle 20p/mile 20p/mile -
Unified Payroll 15For your mileage claim to be reimbursed for business expenses in full,
accepted, the claim needs to meet the we will need:
following criteria:
• Copies of your claims and all
• You must be the owner of the accompanying receipts in order to
vehicle used (i.e. the vehicle is process your expenses free of tax &
registered in your name). National insurance.
• The vehicle must be fully taxed, • Without a claim form and
insured and have a valid MOT accompanying receipts, expenses
certificate. that have been reimbursed by the
• The travel must be wholly and agency will automatically form part
exclusively for the business of your income and will be taxed.
purposes of the end client company. Are there any other expenses I can
• The claim must be submitted using claim?
our claim form or online portal.
There are no other claimable expenses.
• If you are using the manual form,
you must complete and sign the Validating your claim
form, stating the postcode of the
start and end of each journey plus Checking the vehicle used to incur
the purpose of that journey. expenses
• You must attach fuel receipts to the • We will check that the vehicle used
claim form or the online portal. belongs to the worker and not the
end client or someone else. We may
Agency reimbursed expenses use the DVLA vehicle check tool to
substantiate this.
If you have agreed in advance with your
agency/end client that you will be • We will check the vehicle by
comparing fuel receipts to the
location and details of the car.
16 Unified PayrollVerifying a temporary site and Claiming of mileage costs
expense mileage
On receipt of your claim, we will check
• We will assess the reason for for its validity, genuineness, and accuracy
the journey making sure it was before authorizing it for reimbursement
genuinely for business purposes. by Unified Payroll. We will communicate
with you where we need further
• Where we are unable to determine clarification, explanations or more
this from the claim form, we will documents to support your claim.
contact the worker to get further
clarification. We will only reimburse expenses where
the funds received, allow the payment of
• We may use the AA Route Planner hours worked to meet National
to verify mileage. The mileage Minimum Wage. Only where there is
travelled for each journey must be excess can expenses be reimbursed. Any
checked against a recognized route unpaid expenses can be carried forward
planning website before being put until sufficient funds are available. All
on the form. approved qualifying expenses will be
paid free of tax and NIC.
• You will need to explain the
variances of a route used if the
mileage is different from that given
by the route planning site. Unified
Payroll will amend to the confirmed
mileage where no explanation has
been provided.
High mileage claims
Where mileage claims are excessive,
we will request more information
about the reasons for such mileage
and discuss with you to consider
other suitable alternatives for health
and safety.
We may ask you to confirm high
mileage claims by requesting a
picture of the speedometer reading at
the start of the week and another
picture at the end of the week.
Unified Payroll 17Unified Payroll Ltd Unit 13, Ilford Trading Estate, Basildon, Essex, SS14 3DR
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