Richard Curtis considers the implications of working for an umbrella company.
Workers who have undertaken work arranged by an employment agency may have found themselves working for an umbrella company.
Generally, the recruitment agency would employ a worker who would undertake work for a client of the agency; however, it is increasingly common for the worker to be employed by another business, commonly known as an umbrella company. So, the client company pays the recruitment agency for the services of the worker; the agency then deducts its fee and pays the umbrella company, which then pays the worker for the services they render to the end client.
In this way, the deduction and paying of income tax and Class 1 National Insurance contributions (NICs) from the worker’s salary under the pay-as-you-earn (PAYE) system becomes the responsibility of the umbrella company. The employment rights of the
