A new umbrella company in the UK is helping large numbers of contract workers to keep more of the money they earn, whilst keeping their employers within UK employer laws.

The Transparent Umbrella Company, a UK-based provider of umbrella employment services is changing the very concept of umbrella companies’ function for both employers and employees.

Traditionally, these companies, designed for contract workers who are not ‘fully’ employed by their end client, ensure that the end client stays within the UK Government’s IR35 Legislation, managing how and when PAYE is paid by an employer. Should an employee fall into the qualifying category, the employer and employee will need to make increased National Insurance contributions compared to situations where a contractor or freelancer is utilised.

A New Type of Umbrella Employment

The model of umbrella companies thus far has come under much scrutiny, with the supply chain consisting of recruiters finding the necessary candidates for a client who past for recruitment services. The umbrella company subsequently employs the contract worker, charging a fee (usually £20 – £30 per week) from the worker.

However, umbrella companies have also been seen in the past to pay ‘kickbacks’ to the recruitment company for sending them clients, meaning the worker’s pay is reduced further. Because the umbrella company invoices the recruitment agency for the worker’s pay, recruiters, being in the position of control will require additional fees from the umbrella employer which are passed on to workers.

David Soffer of Payday Bad Credit commented: ‘It is not fair on contract workers in the UK, that their hard-earned money is reduced more than necessary via not just fees to umbrella companies, but the kickbacks umbrella company pay recruiters. Many contract workers have to borrow money on a short term basis, which is expensive and can land them in longer term debt, just to get by, as a stop-gap for what they lose out in high fees to recruiters.

The Transparent Umbrella Company have a novel approach to UK contract workers. The worker simply pays a weekly fee, capped at an industry low of £5 per week. The Transparent Umbrella Company do not provide kickbacks to recruiters, meaning that the worker keeps more of their pay packet.

If a recruiter should require any additional fees or a kickback, the Transparent Umbrella Company provide total clarity to workers, informing them of the fees of the recruiters, driving down their earnings.