The simplest explanation is it is a company that hires contractors on a temporary, assignment by assignment basis. Usually workers who find employment through a recruitment agency will actually be employed by an umbrella company.

These can then maintain one employer whilst working on multiple jobs. Umbrella companies can also contract directly with end clients, which can benefit both parties. Such umbrella companies might have contracts with various recruitment agencies and end clients. The Company can then invoice for the work their employees have carried out.

Every time an invoice payment is received, the umbrella company will keep their agreed margin and deduct any other company costs, such as employers National Insurance and employers pension contributions. Each employee will then be paid, less employees National Insurance contributions and income tax.

What are the benefits to you?

There are numerous advantages. For starters, Centralising things. Even if you are working on several assignments at one time with multiple agencies, it will simplify the whole process to do with your finances. Other benefit include, eligibility to ALL government statutory payments for sick pay and maternity/paternity pay when you need it. There will be no need to complete a self-assessment at the end of the tax year, unless asked to do so by HMRC or if you have any other undeclared income. Being employed by us, will mean you are covered by our Employers and Public Liability Insurance. You’ll also be able to get advice you on what you can and what you can’t be claimed as expenses, and when to claim. As your employment status will be ‘employed’, there is no need to worry about IR35 or MSC legislation.

Recruitment agency benefits

As an agency working with an umbrella company. it won’t be necessary to directly employ contractors, which means no employment rights and no need for a payroll department. All the day-to-day queries about pay, tax and any employment related matters that have the potential to clog up your day would now be the responsibility of PCS. We also make sure workers are checked for the right to work. We will also make sure AWR, PAYE and NI legislation, auto-enrolment, MSC legislation, NMW and IR35 Compliance it adhered to all of the time. For complete piece-of-mind, you’ll have a client portal that means you are able to connect with us 24/7.