Basic Umbrella Company FAQs
Whether or not you have worked for an Umbrella Company before, you may have some questions about how Green Lantern works. We have sent you a guide to working for us, however, we thought it may be helpful to explain some common questions here. Of course if there is anything you need you can contact us at any time.
What is an Umbrella Company?
An Umbrella Company is a company which employs contractors who are providing services to clients on a temporary contract for recruitment companies or end clients. It is usually the option of choice for first time contractors, or those who don’t want to incur the burdens of running their own company. Learn more about the services we provide.
How Does an Umbrella Company work?
- You become an employee of the Umbrella Company
- Green Lantern takes care of all administration and accountancy functions, including invoices and payroll
- The Umbrella Company will make payments to you that are net of PAYE and National Insurance contribution because all income is treated as salary
What is my employment status?
You become our employee, with full employment rights.
How do I get started?
Once we have all of your details, we will contact you to welcome you to Green Lantern, and explain how everything works. We will also double check all of your details are correct and issue you with a link to our employee portal. We will also issue you with a contract of employment which you will need to sign and return to us, and register you with Perkbox.
What are the common Tax Codes?
1100L – This is the standard tax code for this tax year, means that you are entitled to a cumulative allowance of £11,000 between April 2016 and April 2017.
0T – You have not sent a P45 or completed a P46 before your first payment, and therefore you do not have any allowances for tax. It could also mean that your allowances have been used up or reduced to nil by HMRC.
BR – You have a second job/pension. All your income will be subject to 20% tax. If you do not have a second job/pension, you should contact HMRC to rectify.
D0 – You have a 2nd job/pension and you are a higher rate tax payer. All your income will be subject to 40% tax. If you do not have a second job/pension, you should contact HMRC to rectify.
D1 – You have a 2nd job/pension and you are an additional rate tax payer. All your income will be subject to 45% tax. If you do not have a second job/pension, you should contact HMRC to rectify.
NT – You are not subject to any tax deductions (0%).
Emergency Codes – Week 1 or Month 1 emergency codes treat each week or month in isolation and gives an equal amount of tax-free pay every tax week or month that you are paid. This means that your previous tax history for the tax year is not being considered in your tax calculation each week or month.
What are the National Insurance Contribution thresholds?
The Lower Earnings Limit threshold is £112 per week.
The Primary Threshold Limit is £155 per week.
The Upper Earnings Limited threshold is £827 per week
- You will pay 12% Employee’s National Insurance Contributions on your earnings over the Primary threshold up to Upper Earnings Limit)
- You will pay 2% Employee’s National Insurance Contributions on your earnings over the Upper Earnings Limit)
The Secondary Threshold is £156 per week
- 13.8% Employer’s National Insurance Contributions on your earnings over the Secondary Threshold
Do I pay employer’s National Insurance contributions?
As with all employers Green Lantern complies with HMRC guidelines and has to pay Employer’s National Insurance. The amount paid out for Employer’s National Insurance will be shown on your payslips.
I do not have a National Insurance Number?
If you do not have a National Insurance number you must apply for one by calling the Jobcentre Plus on Tel 0845 600 0643. Lines are open 8.00 am to 6.00 pm Monday to Friday and are normally less busy before 9.00 am.
HM Revenue & Customs (HMRC) use your National Insurance number to keep your entitlements to benefits like tax credits and the State Pension up to date.
What ID do I need to join?
If you are an EU national, you will be required to supply one form of photo ID (such as a passport, driver’s license or national ID card), as well as an item proving your address (for example a recent bank statement or utility bill).
For Non-EU nationals there are further requirements that have to be met and we will talk you through this during the joining process.
We will also request proof of your previous earnings and tax coding via a P45 or P46.
Which pay cycle am I using?
You can choose to either be paid weekly or monthly. Most employees are paid in accordance with the invoicing cycle of the end client they are supplied to, and therefore it is important that timesheets are submitted on time to ensure that payments are made within your chosen cycle. If you are paid more than once within a given week or month, your payments will be combined and you will have tax and National Insurance deducted in accordance with this.
How do I access the employee portal?
We will send you a link as soon as you are registered with us. You will set your own password the first time you log on. You can then logon to the portal each time you need to via the button on this website.
How much money will I get paid?
Prior to making payment to you, the Umbrella Company makes all necessary deductions, including PAYE and National Insurance Contributions. Your payments will vary with your hours worked, your chosen payment cycle, your tax code and any other circumstances which are personal to you. We will send you a payslip each week which will show how your net pay has been calculated, and if you would like us to go through this with you please just give us a call. Check how much you will get paid using our Limited Calculator
Will I get paid the same amount each week?
Not always. Your payments vary with your hours worked, your chosen payment cycle, your tax code and the level of expenses that you claim
When do I get paid?
We will process your payment as per your chosen pay cycle. We offer one of the fastest turnarounds of payments in the industry and always release payments to you via Faster Payment – which means that you receive your funds the same day that we process your payroll.
How will I know I’ve been paid?
We will send you a text message each time you are paid, with the net amount being processed into your bank account. As long as your bank accepts Faster Payments, you will be in receipt of funds by close of business on the day you receive the text message.
Will I receive a payslip?
Your payslip will be sent to you via your chosen method – either online, via email or through the post.
I’ve started a new assignment with a different client/recruitment agency, what do I do?
Just let us know and we will get in touch with the new contact. You can call us on 0207 164 2116, or email us, or submit a contact form on this website.
When can I expect to receive my P60?
If you are employed on 5th April, we will send you a P60 which summarises your payment history for the year. We will send this to you by 31st May, usually by email.
I’ve misplaced / never received my P60, can you send me another?
Yes, we can send you a duplicate P60, or alternatively we can provide you with a statement of earnings which shows the necessary information.
What information is on the P60?
The P60 shows your gross salary, PAYE, National Insurance contributions and your student loan deductions (if applicable).
Will Green Lantern complete my personal tax return?
No. We will complete all of the company’s tax information, and submit all records of what has been paid to you to HMRC as soon as we make payment to you. If you are required to submit a tax return, your P60 from us will show the information relating to your Green Lantern employment.
What is a Self-Assessment form?
Self-Assessment is how the government work out what tax is due from an individual, particularly in relation to items that can’t be accommodated within the PAYE scheme. Most people won’t have to complete a self-assessment, but some common reasons as to why you may are below.
Will I have to complete a Self-Assessment tax return form?
Your Umbrella Company work with Green Lantern is properly accounted for in the PAYE system, and therefore your employment with us is not necessary to record on a Self-Assessment. However, there may be some circumstances which may mean you still have to complete a Self-Assessment:
- Have received gross income from savings or investments before tax (including dividends)
- Were self-employed at any point during the tax year
- Were a Director at any point during the tax year
- Earn over £100,000 gross income during the tax year (all income)
- Have been sent one by HMRC
- Are claiming £2,500 worth of expenses/subscriptions against tax (including P11D expenses)
If HMRC sends you a Self-Assessment form you must complete it and send it back.
Can I complete my tax return myself?
This is a personal choice. You can complete your self-assessment form online via HMRC’s self-assessment portal.
Can I expect to receive a tax bill or rebate at the end of the year?
It depends on your personal situation, and if you were being paid on the correct tax code for your individual circumstances. If you have received other sources of income outside of your employment with the umbrella company, or if you have claimed expenses that HMRC does not accept, then further tax charges may arise. You would only receive a tax rebate if you have not worked for the full year, or if you have been paying tax on the wrong tax code relating to your own personal circumstances.
What will happen if I don’t complete a Self-Assessment form?
You could be liable to penalties and interest.
What is a P11D?
A P11D is a form your employer uses to tell HMRC of any expenses and benefits in kind you have claimed through the tax year.
Do you offer a company pension scheme?
Yes, and we will put you in contact with our Financial Advisors if you are interested in contributing to this. Our Advisors have over twenty years’ experience in dealing with contractor’s retirement needs, there are no initial set-up fees and 100% of your contributions are invested.
How much do you charge?
We don’t charge you a fee; we actually retain a small margin from the funds received from the agency / client you are supplied to. We do not charge any fees for setting up or closing down your employment with us, and we also have a no work, no margin policy.
Do I need to arrange insurances in relation to my contract?
When you join Green Lantern, as your employer we provide all the required professional insurances you need. Our Insurances include:
- £2million Professional Indemnity
- £5million Public & Product Indemnity
- £10million Employers Liability