There are many benefits to using Pendragon Consultancy which are specialists in employment solutions for Contractors.
We understand that contracting is demanding and we want to take the stress out of dealing with the administration for Tax, National Insurance and Pension. Using Pendragon Consultancy means that you will get expert, dedicated support, a great package with plenty of benefits combined with receiving your pay on time.
Our industry leading packages all include high levels of expert advice, a friendly but professional service from our dedicated relationship advisors, together with access to our benefits offering Pendragon Perks, where you can make up to £1,000 of savings per year from top retail brands through our partners PerkBox.
We work with agencies throughout the UK, and across a wide range of sectors. We can help you regardless of which agency finds you the work, and if we don’t know an agency, providing you give us the details, we are always happy to get in touch and work with them.
The Pendragon approach means we treat all our employees as individuals, so we can offer advice based on your needs. We are here to help make contracting easier, to answer your questions and to help you get on with your job without worrying about being paid or about tax matters.
Getting started is easy. Just get in touch today and we can get you registered Call our team on 01992 267 067.
- The Umbrella company acts as an employer to agency or end user contractors.
- There is a three-way relationship – the worker (contractor), the Umbrella company and the client.
- The client will pay the Umbrella company who makes the relevant deductions and then pays the worker (employee).
Anyone employed under this three-way relationship through an Umbrella company is classed as an employee and entitled to the same employment rights as any other employee from Day 1.
When an Umbrella company is involved, payment for work is agreed between the Umbrella Company and hiring agency, where a business to business contract is put in place. The Agency then send payment for the work carried out by the employee direct to the Umbrella company, which then retains all employment costs including company margin; this is known as the Invoice Rate. The balance becomes the employees gross pay from which Income Tax and NI deductions are made, and the employee is paid the net salary by the Umbrella company.
- Working as a Pendragon employee means IR35 will not be relevant to you, so no need to worry about it.
- As an employee you don’t need to worry about AWR or MSC risk. It can be a good solution if you are contracting ‘in between’ jobs as there is minimum input required. But we can work with contractors at any level with any length of contract.
- It’s easy to manage your finances. Your payslip will show how much you have earned and how much has been deducted for tax and your wages will be paid directly into your bank account, via faster payment. This means you have the security of knowing exactly how much you will earn and when it will arrive in your account as you’ll receive a text notification once payment is made.
- When you work with Pendragon you become an employee and your salary is paid via PAYE. This means you can continue to work on multiple assignments and enjoy the same benefits as any other employee, for example you are entitled to statutory benefits which include SSP, SMP, SPP, Pension, Holiday Pay.
- As your employer Pendragon can reimburse legitimate expenses as long as they are incurred during a work assignment. There are strict rules about which costs and expenses can be claimed and paid depending on the type of assignment you’re working on and whether it’s subject to SDC (Supervision Direction or Control. Read our full guide on Expenses Explained for more information.
Every Umbrella company uses the same PAYE calculations to work out how much tax you need to pay, but there are still some important things to think about before you choose which company to work with.
Questions to ask:
What margin will the company retain? This varies from company to company, so make sure you find out before you sign up.
What support do they offer? Knowing you have access to a dedicated advisor means that if you ever have any questions or problems you know you can get an expert answer quickly.
What benefits do they offer? Check what benefits, if any, you will get as part of your package. Attractive benefits might be worth paying a little more for, so weigh that up as part of your decision.
What’s the small print? Check minor details like how often, for example weekly or monthly, and what day a company pays to ensure these suit you.
- Check that you are offered genuine employment and not self-employment with tax deducted, and that you are provided with a contract of employment.
- Always do your homework to make sure you are using a reputable and compliant Umbrella company as whilst most operate within the tax legislation some do not. Look out for an accreditation such as FCSA.
- Some promote schemes that are based outside of the UK and claim to allow you to keep more of your income by reducing your tax liability with claims of 80-90%. Salary is paid in two payments one PAYE one loan payment.
- Agency referrals, where the agency is getting a kick-back from an Umbrella company and not concerned with service, accuracy or compliance. The highest referral fee takes precedence over which service would be the most suitable for the worker.
- Promises of HMRC and QC approval. HMRC do not approve any payment solutions and QC approval is funded by the Umbrella company /scheme operator and their lawyers to circumvent the legislation, the worker is then left to pay any outstanding tax liabilities.
- You should be very wary of these claims as such arrangements leave you at risk because you are ultimately responsible for your tax affairs and ensuring you are paying the correct amount of tax.