Umbrella Payments & Payroll

Let us explain about Umbrella Payments & Payroll.

Our business is based on Contracts/Agreements between third parties and Clarity Umbrella Ltd for the services of our employees. In this case, we have a contract between the agency/end client and Clarity Umbrella Ltd for the contractor services. Funds received from that Contract belong to Clarity Umbrella Ltd and we meet our obligation to pay Employment Taxes from those funds. In addition, we deduct an arbitrary margin in arriving at “earnings” of employees that are then subjected to Income Tax and National Insurance Contributions.

So in summary, the “earnings” amount to the London Living Wage plus a Bonus based on the profit that Clarity Umbrella Ltd makes from the Contract with the agency/end client.

To calculate that profit, Clarity Umbrella Ltd has first to deduct payments that have to be made to HMRC, (secondary Class 1 contributions and the apprenticeship levy), and an arbitrary margin that covers general running costs. In other words the “Bonus” part of the earnings cannot be calculated or be available until after statutory payments have been set aside for payment to HMRC.

When Contracts of Employment are received they are retained by the point of contact here at Clarity and we will NOT countersign until the Verification of Identity and Right to Work Check has been satisfactorily completed. Therefore no funds will be issued to contractors until these checks have been completed in its entirety.

Invoice Processing Procedure       

We request that all contractors complete their timesheets on our online portal, this can be done on a daily basis and saved or submitted in one go, based on the agencies weekly or monthly invoice request. Timesheets that are completed before 3pm are processed and invoiced the same working day, after this point the invoice will be raised the following working morning.

All invoices are issued to the agency by email as soon as the point of contact here at Clarity has checked to ensure the details are as expected.

Payment Processing           

We run our bank statement every morning at around 8.00am, providing funds have hit our account at this point from the agency then funds will be processed the same day less all necessary deductions. We will then issue the contractor with a payslip via our online portal confirming all necessary taxes have been paid. Daily payment runs are reported to HMRC via RTI. We pay the worker once a month regardless of whether we have received funds from the agency/ client or we pay them the day we receive funds; whichever comes first.