Umbrella Guide for Contractors

Table ofContents Please click the section headings below to

view content for each section.

Introduction to Unified

Payroll

Why You Should Use

Unified Payroll?

Required Documents

to Join Unified Payroll

IR35 Explained

Expenses Policy

Umbrella Companies

Explained

The Enrolment Process

Your Employment

Contract Explained

Payslip and

Reconciliation

Statements Explained

03

04

07

12

16

03

06

09

13

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We also run multiple pay runs, so your payments are delivered on time, every time. All payments to contractors are processed on-shore to a UK based bank account that is denominated in British pound sterling.

Our dedicated compliance and customer service team has extensive experience in assisting with all your queries. Whether you have questions about PAYE, Umbrella companies, IR35 or switching to us, our team is here to help. Our 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 accordingly.

HMRC guidelines, while including AWR (Agency Workers Regulations) and IR35 legislation, ensuring your payroll is compliant with the law.

As your employer, we manage your payments, deducting tax, pension, holiday pay and other deductions required by law. Our contract is overarching, so you can complete as many contracts as you want without changing employers. Using our umbrella company solution saves you time and effort, leaving you to be in control of what contracts you complete while we handle everything else.

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About Us

Trusted by contractors all over the country, Unified Payroll is one of the UK’s leading PAYE (Pay as you earn) umbrella companies. We have over ten years of experience providing stress-free payroll services for contractors, freelancers, and recruitment agencies.

Our umbrella company is professional and trustworthy while following HMRC guidelines. Using our umbrella solution means your payments and tax deductions are accurate, leaving you with peace of mind.

What is anumbrella company?An umbrella company employs freelancers or contractors who complete their contract assignments for client companies. Umbrella companies sit between you (the contractor), and the recruitment agency or client company.

If you are within IR35, Unified Payroll, as an umbrella company, will employ you as an employee as you complete your contract with the end client.

By signing a contract of employment, you become an employee of Unified Payroll, and we become your employer. Our contract of employment follows

Why useUnified Payroll?

Quick and simple on boarding process

Our on boarding process is simple, informative and fast. Inform our team that you want to use our services, send the required documents, and we can have you set up on the same day.

Free take-home pay illustration

We provide a free take-home pay illustration based on your circumstances, so you know your possible take-home pay before you join us.

Access to Unified Loyalty Perks

As a contractor using our PAYE umbrella payroll company, you get automatic access to Unified Loyalty Perks with online shopping vouchers and discounts at over 7,500 high street retailers.

We manage all the admin

We operate a PAYE umbrella scheme for contractors working within IR35, making life simple and easy. As your umbrella company, we process all HMRC deductions, pension and holiday pay, so you do not have to be involved with any admin.

A compliant umbrella company

As a contractor, your umbrella company must follow HMRC guidelines when processing your payments.

As a compliant umbrella company we follow all HMRC guidelines. If an umbrella company does not follow HMRC guidelines, it will result in HMRC recovering unpaid taxes from you as the contractor.

Full employee benefits protected

Our contract of employment includes full statutory benefits including sick pay, maternity, paternity & holiday pay. No matter what contract you carry out your statutory benefits are protected.

Faster payments & pay notifications

We run multiple pay runs daily using same day faster payments to make sure you are paid on time, every time. We also email you your payslips and send text message alerts, to let you know when you will be paid.

An expert customer service team

As part of our umbrella solution, you have access to our expert customer service team, who can assist with questions about IR35, umbrella companies, expenses and our services. We personalise our service to your needs so whether you want a specific account manager, or you want to speak to anyone in the team, our expert team will always help.

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UsefulContacts

CustomerService Team

01268 669979 07727 676427

info@unifiedpayroll.co.uk

Sales Team

07543 22030807543 219347

sales@unifiedpayroll.co.uk

Payroll Team

01268 669979

payroll@unifiedpayroll.co.uk

Competitive umbrella company Margin

We have a low, competitive umbrella margin.

No joining or exit fees

We don’t have any joining or exit fees, so using our service is straight forward and hassle-free.

Pension contributions sorted with no hassle

Our chosen pension scheme is the government-backed pension provider 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 applications

We provide references for mortgages, tenancy agreements and other financial applications.

How do I join Unified Payroll?

Joining Unified Payroll as an umbrella company is straight forward and easy. All you need to do is;

Email our team on

sales@unifiedpayroll.co.uk

Or give us a call on01268 669 979

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What is the joiningprocess for Unified Payroll?

• You choose to sign up withUnified Payroll, providing yourdetails, right to work and P45/P46.

• Your ID documentation isverified by our compliance team,completing yourenrolment.

• We send out your Unified PayrollUmbrella – EmploymentContract using EchoSign, anelectronic contract system youuse to sign the contract. Thisoverarching employmentcontract states all youremployment rights and benefits.

• We contact your agency or clientcompany and request an agency/client company contract. Theagency contract shows the termswith which we engage with youragency on your behalf.

Please note: We will not be able to process timesheets that are older than two weeks before enrolling with us.

• We sign the agency/clientcompany contract and return it toyour agency/client company.

• We issue you with an AssignmentSchedule. This schedule outlinesthe particulars of yourassignment, including pay rate,start/end date and any noticeperiod you need to adhere to withthe end client.

• You submit your timesheets toyour recruitment agency/clientcompany weekly.

• We raise invoices with yourrecruitment agency or clientcompany based on yourtimesheets.

• You receive a text message whenpayment is sent to your account.

• Your payslip is sent to you byemail.

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Required Documents to start working with Unified Payroll

What required documents do I need to provide?

1. Right to work documentation

If you are a British Citizen, thisincludes:

• A Valid Passport (copy ofFront cover and photographpage)

• or a Full Birth Certificate (notthe short version)

• and a copy of NationalInsurance confirmation fromHMRC.

If you are an Overseas National, there will be an additional requirement, this includes:

• A valid residency permit, withproof that you can reside andwork in the UK,

• or a current BiometricImmigration Document,

• or a current immigrationstatus document withPhotograph.

For more details, please request a Right to Work checklist.

2. Confirmation of NationalInsurance number

Examples of acceptabledocuments include:

HMRC Notifications orDocumentations, payslips,P60, P45 or plastic NationalInsurance card.

3. Proof of Bank account

Examples of acceptabledocuments include:

• A Bank statement,

• A photocopy of your bankcard,

• or a screenshot of your onlinebanking account includingaccount number, sort code,name and address.

4. Two documents showing Proof ofAddress

Examples of acceptabledocuments include:

• Mortgage Statement ora Mortgage RedemptionStatement (acceptable for 12months from the date shown

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on the statement) • Recent Utility Bill – can be

Gas, Electric, Water,Telephone (acceptable forthree months from the dateshown on the bill)

• Council Tax Bill (acceptablefor 12 months from the dateshown on the bill, currentyear)

• House or Motor InsuranceCertificate (12 months fromthe start date of the policy)

• Current Full UK DrivingLicence

• UK/EU Photocard DrivingLicence (must be current)

• Current State PensionBook or Notification Letter(acceptable for 12 monthsfrom date of the letter)

• Benefits Agency Book(current) or letter from thebenefits agency (acceptablefor 12 months from the dateof the letter)

• Local Authority Rent Card(current)

• Rent Book or TenancyAgreement

• Bank Statement, BuildingSociety Statement, CreditUnion Statement orPassbooks (acceptable forthree months from the date

on the statements) • Letter from a Solicitor

confirming completion ofa house purchase or landregistration

• Official Documentation fromHer Majesty’s Revenue andCustoms (excluding P60s)(these are acceptable for 12months from the date shownon the documentation)

• Credit Card Statements(acceptable for threemonths from the date shownon the bill)

• Tenancy agreement (within12 months, current)

5. P45 of your last Job/UmbrellaPayroll provider

Your P45 will ensure your taxcode is correct, resulting incorrect and constant deductions.

If you have any questionsregarding validity or allowanceof any documentation, pleasecontact our customer serviceteam who can help.

Please note – We will not be ableto progress your enrolment orpay any timesheets until youhave provided us with youridentification documents, andthese documents have beenverified and checked by ourcompliance team.

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Your EmploymentContract ExplainedWhat is an agency contract?

An agency contract is a signed contract between Unified Payroll and your recruitment agency showing the terms for how we engage with your recruitment agency on your behalf. Once an agency contract is signed, we issue you with an ‘Assignment Schedule’. Our assignment schedule outlines the particulars of your assignment, including pay rate, start/end date and any notice period you need to adhere to with the end client.

What is my employment contract?

Your employment contract is your overarching employment contract with Unified Payroll containing all of your employment rights and benefits. You can sign this quickly and electronically using echo sign.

Are Agency Workers Regulations included in my employment contract?

Our contract of employment covers Agency Workers Regulations. Agency Workers Regulations (AWR) ensures that contractors get equal treatment compared to end client’s internal employees. For example, you should be allowed to use any shared facilities (e.g. a staff canteen or childcare) from the first day you work for your end client.

After 12 weeks continuous employment in the same role, you should get the same terms and conditions as the end client’s internal

employees, including pay and any annual leave above the minimum 28 days required by law. Your assignment can not be ended as you get near 12 weeks of continuous work.

Are statutory employment entitlements included in my employment contract?

Yes, our employment contract ensures you have the same rights as any other employed person. Your statutory employment entitlements include:

Statutory Sick Pay (SSP)

Should you be off work for more than four consecutive days with a valid GP note, subject to qualification, we will initiate a statutory sick pay on your behalf. The standard rate for SSP is £94.25 per week (2019-20). Statutory sick pay is paid on your usual payment date.

Statutory Maternity Pay (SMP) & Statutory Paternity Pay (SPP)

Qualifying criteria must be met before you can apply for Statutory maternity and Statutory Paternity Pay. The current rate is £148.68 per week for both.

For Statutory maternity pay, the main criteria is continuous employment with your employer for a minimum of 26 weeks before the qualifying week (the 15th week before your due date).

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Holiday Pay

You have the right to 28 days paid leave, including bank holidays (although you could be entitled to more under Agency Workers Regulations).

If you work on a casual basis or very irregular hours, your holiday entitlement is calculated as a percentage of your hours, so 28 days holiday per year is equivalent to 12.07% hours. We then use 12.07% to calculate your holiday entitlement per hour or days worked.

Can I get my holiday paid in different ways?

There are two ways we can pay you your holiday pay; this is shown below:

Held Back (Accrued) Holiday Pay - Holiday Pay can be held back in a‘Holiday Fund’ which you can apply forwhen you take time off. We calculate12.07% of your gross taxable incomeand retain this amount gross. Thisgross income will be taxed when youtake a holiday and get your holiday pay.You will need to inform us when youwould like this paid out via email.

Held back (Accrued) Holiday Pay can be paid as a weekly value, a combination of weeks that you have accrued or as a total accumulated holiday amount.

For example:

Week 1 - £ 45.50 holiday pay retained Week 2 - £65.50 holiday pay retained

Week 3 - £45.50 holiday pay retained

If you decide to take a holiday in Week 4, you can request:

• an individual week’s value (week 1= £45.50),

• a combination of the weeks accrued(weeks 1 and 2 = £111)

• or the total accumulated holidaypaid (week 1, 2 & 3 = £156.50).

Please note:Held Back (Accrued) Holiday Pay is the default method used by Unified Payroll.

Rolled Up Holiday Pay

Your Holiday Pay is included upfront with each payment you receive. Rolled Up Holiday Pay means you get paid in advance for the time you may take off as holiday, but you won’t get paid when you decide to take a holiday. Rolled-up holiday pay is calculated using your gross taxable salary.

Please note:You will have to request Rolled Up Holiday Pay, as your Holiday Pay method.

How do I save towards my pension?

All eligible contractors with Unified Payroll will be auto-enrolled into our pension scheme with government-backed pension provider NEST.You will be auto-enrolled into our pension scheme after 12 weeks of continuous employment with Unified Payroll. To be enrolled in our pension scheme, you must be;

• Aged 22 or over and under statepension age,

• And your earnings must be morethan £182 gross in the week youare assessed.

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Please note:

You must first be enrolled and make a contribution before you can opt-out of your pension.

What happens if I change my recruitment agency or client company?

Unified Payroll can work with any agency in the UK, so no matter the contract, your employment with Unified Payroll continues. Notify sales@unifiedpayroll.co.uk with the details of your new agency contract, and we’ll do the rest.

Each agency is different, so please make sure you are aware of your new agencies payment processes and whether they are self-billing or need invoices from Unified Payroll.

What happens if I no longer need an Umbrella company?

If you get a permanent role or want to leave Unified Payroll for any other reason, the process is straightforward. There are no exit fees, so all you need to do is request your P45 by email from your account manager.

Please note the following when you request your P45:

Your final payment must be processed and paid to you by Unified Payroll before a P45 can be issued.

The payroll period relating to your final payment will need to have passed before we can process a P45 (e.g. if you are paid in tax week 37, the earliest we can issue a P45 is week 38).

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What is IR35?

IR35 is the UK anti-tax avoidance legislation coming into effect April 2021. The pending IR35 changes are designed to combat what HMRC saw as tax avoidance by disguised employees and the firms hiring them. HMRC discovered that disguised employees were using limited companies to avoid tax when in practice, they were working as employees for client companies.

Contractors working within IR35 and under the supervision, direction and control of the client company will have their paid income subject to the following deductions:

• PAYE Tax

• NI Contributions (includingEmployer NI)

• Apprenticeship Levy

• Pension Contributions

• Holiday Pay

• Student Loan Repayment, and

• Any other statutory deductionsrequired.

How does IR35 affect contractors?

If your job role is inside IR35, you will need to be paid with HMRC deductions via a PAYE umbrella company, if your client company do not wish to use their internal payroll.

Recruitment agencies or client companies cannot blanket assess job status’s, so if you have any doubt, our experienced team can offer advice.

Please note:

The pending IR35 changes, affecting private sector contractors, come into effect April 2021.

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Payslip and reconciliation statements explained

Agency Workers Regulations protect your pay

Agency Workers Regulations state that after 12 weeks’ continuous employment in the same role, you should get the same terms and conditions as the end client’s internal employees, this includes your pay.

For example, if the end client’s internal employee is paid £660.97 after-tax, you as a contractor must be paid the same, so your net pay is £660.97.

What are the deductions on my payslip?

As a PAYE umbrella solution following HMRC guidelines, we display employment costs and HMRC deductions clearly on your payslip. Please find the explanations to payslip deductions below.

Employment costs

To pay you as an employer, your recruitment agency or client company passes on the cost of employing you over to us.

Employment costs include:

• Employers National Insurance

• Apprenticeship Levy

• Holiday Pay

• Employer pension contribution

• and Umbrella margin

Employment costs are shown in red in the example reconciliation statement below.

Gross Placement Income - This is the gross income we get from your agency or end company for the work you have completed. This income is increased, taking employment costs into account. Once employment costs are deducted from your placement income, you will get the same net pay as the end clients internal employee.

Effective gross income - This is the gross placement income with employment costs deducted.

Employee taxes

These are the HMRC deductions; this includes tax and employee national insurance. Employee taxes are shown in blue in the example reconciliation statement below.

Net Pay

This is the take-home amount paid to you after all tax and national insurance have been deducted.

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Example Reconciliation Statement

Gross Placement Income

Less employment costs

Less employee taxes

Total employment costs deducted

Effective Gross Income before Tax

Employees NI (National Insurance)

PAYE

£980.00

Employers NI (National Insurance)

Apprenticeship Levy

Employer Auto enrolment pension contribution

Unified Payroll Umbrella Margin

(£94.30)

(£13.00)

(£38.00)

(£18.00)

£161.80

£818.20

(£88.43)

(£68.80)

£660.97Net Salary

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Vehicle

Car or Van

Motorcycle

Bicycle

Passenger

rate

5p/mile

-

-

First 10,000

business miles

45p/mile

24p/mile

20p/mile

Over 10,000

business miles

25p/mile

24p/mile

20p/mile

• You are not moving between locations, or if you are not expected to move toanother site for the same end client, when this temporary workplace finishes.

• If you are in doubt about whether your site is a temporary workplace, pleasecontact our customer service team.

You can claim expenses for using your vehicle, using the HMRC guideline rates, shown below:

Mileage

Expenses 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:

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For your mileage claim to be accepted, the claim needs to meet the following criteria:

• You must be the owner of thevehicle used (i.e. the vehicle isregistered in your name).

• The vehicle must be fully taxed,insured and have a valid MOTcertificate.

• The travel must be wholly andexclusively for the businesspurposes of the end client company.

• The claim must be submitted usingour claim form or online portal.

• If you are using the manual form,you must complete and sign theform, stating the postcode of thestart and end of each journey plusthe purpose of that journey.

• You must attach fuel receipts to theclaim form or the online portal.

Agency reimbursed expenses

If you have agreed in advance with your agency/end client that you will be

reimbursed for business expenses in full, we will need:

• Copies of your claims and allaccompanying receipts in order toprocess your expenses free of tax &National insurance.

• Without a claim form andaccompanying receipts, expensesthat have been reimbursed by theagency will automatically form partof your income and will be taxed.

Are there any other expenses I can claim?

There are no other claimable expenses.

Validating your claim

Checking the vehicle used to incur expenses

• We will check that the vehicle usedbelongs to the worker and not theend client or someone else. We mayuse the DVLA vehicle check tool tosubstantiate this.

• We will check the vehicle bycomparing fuel receipts to thelocation and details of the car.

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Verifying a temporary site and expense mileage

• We will assess the reason forthe journey making sure it wasgenuinely for business purposes.

• Where we are unable to determinethis from the claim form, we willcontact the worker to get furtherclarification.

• We may use the AA Route Plannerto verify mileage. The mileagetravelled for each journey must bechecked against a recognized routeplanning website before being puton the form.

• You will need to explain thevariances of a route used if themileage is different from that givenby the route planning site. UnifiedPayroll will amend to the confirmedmileage where no explanation hasbeen 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.

Claiming of mileage costs

On receipt of your claim, we will check for its validity, genuineness, and accuracy before authorizing it for reimbursement by Unified Payroll. We will communicate with you where we need further clarification, explanations or more documents to support your claim.

We will only reimburse expenses where the funds received, allow the payment of hours worked to meet National Minimum Wage. Only where there is excess can expenses be reimbursed. Any unpaid expenses can be carried forward until sufficient funds are available. All approved qualifying expenses will be paid free of tax and NIC.

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Unified Payroll Ltd

Unit 13, Ilford Trading Estate, Basildon, Essex, SS14 3DR