Frequently Asked Questions

What is an Umbrella company?
Will I be charged if I don’t work?
Can I claim my relocation costs?
What expenses can I claim?
Do I have to keep my receipts?
How is Employers NI calculated?
How is Employees NI calculated?
What is a NI uplift?
What is the difference between Re-imbursable and Claimable expenses?
Why are expenses on both sides of the payslips?
How long does my money take to clear into my account?
What does the Insurance cover?
What is the difference between a Cumulative Tax Code, Week 1/Month 1 tax code and BR Tax Code?
What is Employees National Insurance?
What is Employers National Insurance?
How does the breakdown of my payslip work?
How can I check that I have been paid correctly?
How do you calculate holiday pay?
How do I claim for holiday or sickness?
To whom do I send my timesheets to?
When should you receive my timesheet?
How long does it take to process my registration?
What happens once I’ve been working at the same client site for 24 months
What about my VAT, PAYE and NI liabilities?
Do you have a referral scheme in place?
Why can’t I submit my timesheets online?
What if I have more questions?

What is an Umbrella company?
An umbrella company offers contractors most of the benefits of being a limited company without all the responsibilities and cost of the financial management. It means that contractors can be legally tax efficient and not be concerned with all the implications of IR35.

Will I be charged if I don’t work?
No, 1st Contact Umbrella only charges for every timesheet that is processed through our payroll.

Can I claim my relocation costs?
If you sign up before you leave your home country and 1st Contact Umbrella is your first job, you can claim your relocation costs as part of your expenses. This includes flights, six weeks temporary accommodation and moving/shipping costs. You can claim to £ 8000 in relocation costs.

What expenses can I claim?
All expense claimed must be wholly and exclusively for business purposes. These include Travel and subsistence, Computers and stationary. Our expense policy and a comprehensive list of expenses can be found on our website.

Do I have to keep my receipts?
You are required to keep invoices/receipts for all expenses that you claim. Should HM Revenue & Customs enquire about your expenses, you should be able to substantiate the expenses with these invoices/receipts. 1st Contact does not require that you send in these receipts. 1st Contact may review expenses from time to time where receipts will be requested.

How is Employers NI calculated?
Employers NI is calculated according to your Taxable Pay. The Employers NI rate is 12.8%. The weekly tax free allowance is £110.
You can calculate this as follows;
If your Taxable pay is £1000:
(Taxable Pay – Tax free allowance)*12.8%
= (£1000 - £110)*12.8%
= £113.92

How is Employees NI calculated?
Employees NI is calculated according to your Taxable Pay as well. The Employers NI rate is 11% and 1%. The weekly tax free allowance is £110. The following brackets apply to Employees NI.

You can calculate this as follows if your Taxable pay is £1000:
((Taxable Pay – Tax free allowance – Excess over £ 770)*11%) +(( Taxable Pay – Tax free allowance – Middle bracket)*1%)
= ((£1000 – £110 -£230)*11%) + ((£1000 - £110 - £660)*1%)
= ((£660)*11%) + ((£230)*1%)
= £74.90

What is a NI uplift?
The NI Uplift (National Insurance Uplift) is something that some agencies/employers will agree to pay contractors who are going through an Umbrella Company as opposed to working and being paid by them as PAYE employees. When you work through an Umbrella Company, your agency/client will not have to make Employer’s National Insurance payments to HM Revenue and Customs on your behalf. As your agency/client is effectively saving money by not making this payment, they may be willing to pass this benefit on to you. The NI Uplift can range from anything up to 12.8%. If your agency/client decides to pass this benefit on to you, it will be added to your hourly rate.

For example:
If your rate is £10 per hour and your agency/client decide to pass on the benefit to you, your hourly rate would be £11.28 per hour if you are paid through a Umbrella company.

Please note that this benefit is given at the discretion of each agency/client and will need to be discussed with them.

What is the difference between Re-imbursable and Claimable expenses?
The difference between a Claimable Expense and a Reimbursable Expense is as follows:

Claimable Expenses are expenses that are incurred by the contractor and they must be wholly and exclusively business related. The agency/client do not pay these on behalf of the contractor, they are expenses that are claimed through the Umbrella Company. By submitting an expense the contractor is effectively reducing their taxable earnings and thus reducing the amount of PAYE and NI paid.

Reimbursable Expenses are expenses the contractor has incurred and that the agency agrees to refund back to the contractor. The agency should pay VAT on these reimbursable expenses as they do on the rest of the invoice.

Why are expenses on both sides of the payslips?
Claimable Expenses are expenses that are incurred by the contractor and are wholly and exclusively business related. The Agency/Client do not pay these on behalf of the contractor, they are expenses that are claimed through the Umbrella Company. By submitting an expense the contractor is effectively reducing their taxable earnings and thus reducing the amount of PAYE and NI paid.

The reason the claimable expenses shows up as a deductible expense is because we deduct the amount of your expense from your pay before we calculate your tax – this is the main benefit of using an Umbrella company; expenses reduce your taxable income. Your expense shows up on the other side as a claimable expense because the expense is then added back onto your pay after the tax has been taken off.

How long does my money take to clear into my account?
At 1st Contact, payroll is run every Wednesday and Friday, providing that we have an invoice from you that matches the funds we receive. We run all of our payments using the standard UK BACS payment method which takes 3 working days to clear.

The three working days are set out as follows:
Day 1 - the day we receive the funds and process them in payroll,
Day 2 - the day the funds are processed by the bank,
Day 3 - the day the funds are cleared into your account (this can be at any time until close of business that day).

So if your funds are sent to us on a Monday, Tuesday or Wednesday they will be processed by us on the Wednesday and will clear into your account on Friday of that week. If your funds are sent to us on a Thursday or Friday they will be processed by us on the Friday and will clear into your account on Tuesday of the following week.

If you would like a clear indication of when you will be getting paid, you will need to contact your agency and find out from them when they will be making the payment to us (and how they make their payments, as this will affect how long the funds take to clear into our account), as we cannot process the payment for you until it has cleared into our account.

What does the Insurance cover?
If you are a 1st Contact employee you are automatically covered for the Professional Indemnity, Employers Liability and Public Liability. The geographical limits for the insurance are Great Britain, Northern Ireland, Isle of Man, Jersey, Guernsey and Alderney.

What is the difference between a Cumulative Tax Code, Week 1/Month 1 tax code and BR Tax Code?
The tax code you are on will depend on if you provide us with a P45 or a P46.  The Cumulative tax code allows you to be more flexible a tax free allowance can accrue if you don’t use it. If you start late in a tax year the first few payments usually has little to no tax on. On a Week1/Month1 you are allocated a tax free allowance and if you don’t use it for a certain week or month you forfeit the tax free allowance. If you do not provide you a P45 and P46 on registration you will allocate a BR (Basic Rate) Tax Code until a P46 or P45 can be provided.

What is Employees National Insurance?
You pay National Insurance contributions (NICs) to build up your entitlement to certain social security benefits, including the State Pension.

Your National Insurance number (NI number) is your own personal account number. The number ensures that the National Insurance contributions and the tax you pay are properly recorded on your account. It also acts as a reference number for the entire social security system.

What is Employers National Insurance?
In effect, you have always paid Employers NI, but no one would have told you about it before, and it would not have appeared on your payslips. Every Employer in the UK has to pay 12.8% on every employee's wages to HMRC as Employers NI (ENI). If you were working directly for your end employer, they would pay the ENI. If you were working through your agency, they would pay it.

In the case of working through an umbrella company, the ENI still needs to be paid, in this case, by us. So this is reflected in the uplifted rate given by your agency. The end client has passed the ENI on to the agency, who pass it onto us (via your uplifted rate) and we then pass it on to HMRC.

How does the breakdown of my payslip work?

The breakdown of your payslip can be seen as follows;

Taxable Pay = (Basic Pay + Holiday Pay) - (Deductable Expenses) - (NIER) - (1st Contact fee)

Calculate PAYE and NIEE and NIER on Taxable Pay, according to tax bands and tax code.

Employee take home pay = (Basic Pay + Holiday Pay) – (PAYE and NIEE and NIER) – (1st Contact Fee)

How can I check that I have been paid correctly?
After each week that you are paid we will load your payslip online which will detail your income, expenses and the appropriate deductions to arrive at your net salary

How do you calculate holiday pay?
Holiday pay is calculated at 1/12th of your total gross earnings for the week or month.

How do I claim for holiday or sickness?
You don't, because 1st Contact Umbrella does not accrue any of your money whilst you are working. However, contractors are entitled to Statutory Sick Pay (SSP). Please contact us for further details.

To whom do I send my timesheets to?
If you have registered with 1st Contact you can submit your timesheets and Re-imbursable expenses online. Please ensure you send the original timesheet to your agency as well. 1st Contact will generate the invoice and email or Fax it to your agency except if they are Self-Billing.

When should you receive my timesheet?
It is essential that you submit your timesheet as soon as you can. We invoice your agency immediately after receiving your timesheet. Please note that some agencies have specific payroll days and to make sure you are not left off payroll please confirm this with your agency.

How long does it take to process my registration?
Once you have completed our registration forms we aim to have your account active within 24 hours. Register now.

What happens once I’ve been working at the same client site for 24 months?
When you have been at the same client's site for 24 months, or you become aware that your contracted period will extend beyond 24 months, your workplace is no longer deemed as temporary. Once you have breached the 24-month rule and you spend 40% or more of your time at the same site, you will no longer be able to claim travel between your home and that place of work.

What about my VAT, PAYE and NI liabilities?
With 1st Contact Umbrella you do not need to worry about any of these government regulations. We take care of all your VAT, PAYE and NI liabilities. PAYE and NI are deducted and paid to the Inland Revenue by us.

Do you have a referral scheme in place?
If you Refer a friend and the referral is successful you get £50. Terms and Conditions apply.

Why can’t I submit my timesheets online?
If you have not sent us your placement details yet you will be unable to submit timesheets online. Please forward these to us as soon as you have them or if your placement details change.

What if I have more questions?
If you still have any unanswered questions please contact us.