Working through Umbrella Companies

From 6 April 2020 the rules for engaging individuals through limited companies, sometimes known as Personal Service Companies (or “PSCs”) are changing. The responsibility for determining whether the Off-Payroll Working rules (sometimes known as “IR35”) apply will move to the organisation receiving an individual’s services. One of the main principles of this legislation is to ensure that all workers are paying appropriate tax and national insurance contributions.

What is changing?

As a consequence of this change in legislation Equiniti Hazell Carr have conducted extensive consultations with our internal stakeholders, external advisors and our clients. We have assessed the new Off-Payroll Working rules and the risks attached to them and have decided that engaging with PSCs post 28 February 2020 would be a significant risk to both Equiniti Hazell Carr (without suitable insurances and indemnities in place from the PSC and with our own insurers) and to any “End User” (being the party receiving the benefit of the services).

Therefore, to minimise the risk of any uncertain status assessments and to comply with applicable law, from 28 February 2020 Hazell Carr will primarily engage with independent contractors via a panel of umbrella companies. Each of these umbrella companies will be an “FCSA Accredited Umbrella Company” that directly employs the independent contractors and will operate all relevant employers’ and employees’ National Insurance and income tax deductions on earnings they pay individuals (i.e. the umbrella company will pay the contractor the net amount).

Our panel of umbrella companies

We are pleased to confirm that we have completed a procurement exercise to identify our panel of preferred umbrella companies. This procurement exercise helped us identify reputable umbrella companies who provide a good level of contractor support and can offer a service that complies with the forthcoming IR35 regulations. See below for more detail regarding our panel:

PayStream

Telephone: 0161 516 2942
Email: newbusiness@paystream.co.uk
Website: https://www.paystream.co.uk/umbrella/

Trafalgar

Telephone: 020 7940 1990
Email: contracts@contractorsolutions.co.uk
Website: https://www.trafalgaraccounting.co.uk/services/trafalgar-umbrella-company-solutions/

Please do not hesitate to contact the companies above if you have any questions regarding their products and services.

What are the next steps?

If you already work with an umbrella company on our panel you do not need to take any further action.

If you currently work via a PSC, or you work with an umbrella company that is not on our panel, we would like you to switch to one of our panel of preferred umbrella companies.

We would like you to tell us by 29 November 2019 which umbrella company you would like to use in the future. We will then engage with you via this umbrella company for any assignments running from March 2020 onwards. Please click on the following link and complete the short questionnaire to notify us of your intentions:
https://www.smartsurvey.co.uk/s/HazellCarrUmbrella/

To be clear, you can continue working with us via a PSC, or an umbrella company that is not on our panel, up to 28 February 2020. From March 2020 onwards we require you to engage with us via one of our panel of preferred umbrella companies.
If our clients identify roles that are potentially outside of IR35, and are willing for us to offer contractors the option of working via PSCs, we will explore ways of implementing this. We will work with you to ensure that our resourcing services continue to meet your needs.

Summary of relevant dates and milestones

• 15 November 2019 – Our panel of umbrella companies will be communicated to all contractors, with further information added to the Hazell Carr website.
• 29 November 2019 – Individuals who currently work via limited companies, or umbrella companies not on our panel, must review the panel options and pick a new umbrella company to use. Individuals must agree to convert to their chosen umbrella company from 1 March 2020 onwards.
• December 2019 onwards – New contracts will be issued using the new umbrella company details.
• 1 March 2020 onwards – We will primarily engage with independent contractors via a panel of umbrella companies.

Our approach regarding the new Off-Payroll Working rules has been accepted by all of our clients with whom we have specifically engaged. We have aligned our approach with industry best practice, as well as through seeking independent advice.

Please do not hesitate to contact us via one of the following channels if you have any queries.
Email: contact@hazellcarr.com
Telephone: 01903 852 531
Or speak to your onsite operations management team.

Working with Umbrella Companies FAQs

FAQ1 - My contract has a substitution clause, so I’m covered, right?

Please bear in mind that some Clients have made the decision not to engage the services of Limited Companies so although your existing contract may contain this clause, it is irrelevant as Limited Company contractors are being asked to switch to one of the Equiniti Hazel Carr umbrella companies.
If the end Client confirms that they will be carrying out IR35 assessments, then yes, “substitution” is one of the considerations, however, it is not the only consideration. For further information on IR35 assessments please check out the following links:
https://www.gov.uk/guidance/check-employment-status-for-tax
https://www.gov.uk/guidance/understanding-off-payroll-working-ir35.

FAQ2 - I believe the work I do sits 'outside' of IR35 and therefore can I continue to work via my Limited Company?

Please bear in mind that some Clients have made the decision not to engage the services of Limited Companies from April 2020 and therefore if you wish to continue to work with them, you will have to switch to working via an Umbrella Company.

Equiniti Hazell Carr will be liaising with Clients to see if they believe any roles are 'outside' IR35, however if you believe your specific role is 'outside' please contact us.

Email: contact@hazellcarr.com
Telephone: 01903 852 531
Or speak to your onsite operations management team.

For further information on IR35 assessments please check out the following links:
https://www.gov.uk/guidance/check-employment-status-for-tax
https://www.gov.uk/guidance/understanding-off-payroll-working-ir35.

FAQ3 - I currently work via an Umbrella Company/PAYE. Am I impacted by the IR35 regulations?

No you are not impacted by IR35. However, to continue working on your existing Equiniti Hazel Carr assignment, you will need to make sure that you are using one of the panel of Equiniti Hazell Carr umbrella companies. If you need to switch to one of the panel of umbrella companies, you will need to do the following:

18th November to 28th November
Please take the time and opportunity to speak to the Equiniti Hazell Carr panel of umbrella companies. Each has been specifically selected by Equiniti Hazell Carr because of their reputation for providing a good level of contractor support and, importantly, can offer a service that complies with the forthcoming IR35 regulations.

29th November 2019
Select an umbrella company from the Equiniti Hazell Carr panel of umbrella companies and complete the following link no later than 29th November 2019.
https://www.smartsurvey.co.uk/s/HazellCarrUmbrella/

31st January 2020
Complete your registration with the panel umbrella company of your choice and ensure that your contract with the umbrella company starts no later than 28th February 2020.

Please note: Failure to meet any of these deadline dates could affect the continuation of your assignment.
 

FAQ4 - Why do I have to switch to one of Hazell Carr's panel of umbrella companies? I would like to work through an umbrella company of my choice.

Equiniti Hazell Carr has carefully selected which umbrella companies it will work with to ensure they provide you, our contractors, with a reliable service from reputable companies. We also have a responsibility to our Clients (and our contractors) to carry out initial and ongoing due diligence on the Umbrella companies.  

The umbrella companies we have selected are all members of the FCSA. The FCSA is the UK's leading professional membership body for Umbrella Companies, and is dedicated to raising standards and promoting supply chain compliance for the temporary labour market.

We do appreciate there are other umbrella companies in the market, however Equniti Hazell Carr has not completed the appropriate due diligence on them and therefore is unable to work with them.

FAQ5 - A)If I currently operate via a Limited Company but my assignment requires me to provide my services via an Umbrella Company - when do I need to make a decision about what I want to do?

B) If am currently working via an Umbrella Company, do I need to make any changes if my umbrella company doesn't appear on the panel?

If you have been advised that in order to continue to with your current assignment with Equiniti Hazell Carr, you need to provide your services via one of the umbrella companies on the Equiniti Hazell Carr panel of umbrella companies or you currently use an umbrella company which is not on the Equiniti Hazell Carr panel of umbrella companies, you need to do the following:

18th November to 28th November 2019
Please review the panel of umbrella companies. Each has been specifically selected by Equiniti Hazell Carr because of their reputation for providing a good level of contractor support and, importantly, can offer a service that complies with the forthcoming IR35 regulations.

29th November 2019
Select an umbrella company from the Equiniti Hazell Carr panel of umbrella companies and complete the following link no later than 29th November 2019.
https://www.smartsurvey.co.uk/s/HazellCarrUmbrella/

31st January 2020
Complete your registration with the panel umbrella company of your choice and ensure that your contract with the panel umbrella company starts no later than 28th February 2020.

Please note: Failure to meet any of these deadline dates will affect the continuation of your assignment.

FAQ6 - How can I find out what each Umbrella Company charges, income calculations and what other benefits (e.g. pension contributions, holiday pay) the umbrella company may provide?

Please do not hesitate to contact the companies if you have any questions regarding their products and services. Each company has been specifically selected by Equiniti Hazell Carr because of their reputation for providing a good level of contractor support and, importantly, can offer a service that complies with the forthcoming IR35 regulations.
Please do not hesitate to contact the companies if you have any questions regarding their products and services.
Once you have made your choice of umbrella company, please let us know your decision by 29th November 2019 by using the following link:

https://www.smartsurvey.co.uk/s/HazellCarrUmbrella/

FAQ7 - If I operate a Limited Company - what should I do with the Limited Company?

Equiniti Hazell Carr is unable to provide advice on what you should so with your Limited Company. You should therefore speak to your accountant or a professional advisor. It is important that you also let your accountant know if you will be using an Umbrella Company to continue with your Equiniti Hazell Carr assignment.

FAQ8 - What happens if I'm working via a Limited Company or an Umbrella company that is not on the panel of umbrella companies and I don't make a selection by 29th November?

Your Equiniti Hazell Carr manager will be talking to the impacted contractors to provide support through this transition period. If you are unsure and want further information, please do not hesitate to speak to your Equiniti Hazell Carr manager and any one of the panel of umbrella companies. For everyone that wants to continue with their assignments, we will send out reminders to make sure we achieve the deadlines and that all the required changes are made ahead of 5th April 2020.

FAQ9 - Can I continue contracting post April 2020?

Yes, post April 2020, you can continue contracting. You just need to be aware that Equiniti Hazell Carr may need you to provide your services via one of the Equiniti Hazell Carr panel of umbrella companies.

FAQ10 - My take home pay is going to reduce, will Equiniti Hazell Carr compensate me for this?

There is currently no intention to review pay rates, however Equiniti Hazell Carr regularly reviews its pay rates to ensure they remain competitive.

FAQ11 - Will I be able to claim expenses through the Umbrella company?

If you are asked to incur expenses as a direct result of the work you are doing for the client, you will still be able to claim these back via your online timesheet. For all other expenses, you should speak to your chosen Umbrella Company who will be able to explain the process of claiming expenses.

FAQ12 - When will my last invoice be paid via my Limited Company?

Assuming you switch to your chosen Umbrella Company from the 1st March 2020, your final invoice as a Limited Company will be paid on the 27th March 2020.

FAQ13 - What is the CEST tool?

Check Employment Status for Tax (CEST) is HMRC’s online tool for determining IR35 status. Although it has been widely criticised for giving incorrect results, it is currently the only recognised tool for assessing whether a contract is inside or outside IR35. If you do not wish to use the CEST tool, you can seek independent advice, however there is likely to be a charge for this service and there is no guarantee that your Client will accept the result.

FAQ14 - It appears the Client and Equiniti Hazell Carr are taking a 'Blanket Decision' and putting all roles Inside IR35. I didn’t think this was allowed.

We can assure you this is not the case. Some of Equiniti Hazell Carr's clients have decided not to engage Limited Companies going forward, however this is a business decision, which Equiniti Hazell Carr has not had any influence in. Equiniti Hazell Carr remains committed to working with Limited Companies in the future, however can only do so where our Clients confirm the role is outside IR35. We continue to speak with our Clients and if we identify roles that are Outside IR35 we will advertise these accordingly.

FAQ15 - I have read that I can continue to work via a Limited Company, so long as the agency (Equiniti Hazell Carr) pays me Net of any deductions (Tax & NI). Why is Equiniti Hazell Carr not offering this service?

Equiniti Hazell Carr did review this as an option, however feedback from the majority of our Clients showed they were not willing to consider this option. Equiniti Hazell Carr has therefore taken the decision not to allow this option at this time.