What are the risks of using a non-compliant umbrella company?

By engaging with a non-compliant umbrella company, you risk not paying the right tax and National Insurance Contributions. Therefore, HMRC could potentially investigate your tax affairs in the future, and you could face a heavy financial penalty.

What should you do if you think you have used a non-compliant umbrella company?

HMRC has official guidance for workers who are concerned they may have used a tax avoidance scheme in the past. You can send them an email here – CAGetHelpOutOfTaxAvoidance@hmrc.gov.uk. Alternatively, please visit the government’s website for more information. More contact information for HMRC is available here.

Tips to find a compliant umbrella company

There are a lot of umbrella companies in the United Kingdom (and offshore – outside the EU). While a significant majority provide compliant services, a few may be facilitating tax avoidance, and these must be avoided at all costs.

Here are some tips to help you pick a compliant umbrella company.

• Make sure they operate PAYE – Pay As You Earn, HMRC’s tax system for employees.
• Understand how compliant umbrella companies operate.
• Choose an umbrella company with an accreditation from the Freelancer and Contractor Services Association (FCSA). The FCSA is the UK’s leading professional body committed to ensuring the supply chain of temporary workers is compliant with UK tax law. Umbrellas with an FCSA accreditation have successfully proven they adhere to the FCSA’s publicly available Codes of Compliance.
• Use payslip auditing software to check you’re being paid compliantly – There are a handful of umbrella payslip auditing software providers that can help you check your payslips are being processed correctly, without any malicious deductions or red flags. SafeRec, software powered by AI, certify umbrella companies that want to help their employees with compliance. Every time a contractor is paid by a SafeRec umbrella, they are issued a payslip audit which will review all of the deductions on their payslips. Therefore, you may be interested in using an umbrella with SafeRec Certification.
• Read online reviews and only consider engaging with umbrellas that have good reviews on the most respected platforms, such as Trustpilot and Google.

Churchill Knight Umbrella

Churchill Knight Umbrella is a member of the FSCA and a SafeRec Certified Umbrella Company. Our employees have access to payslip audits – every time we process their payroll – thanks to our SafeRec Certification.

To request a take-home pay calculation, please complete the short form on this page, or call our friendly sales professionals on 01707 871622.