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Although you are regarded as a ‘contractor’, you are in fact employed by the umbrella company as an employee who works on temporary work assignments, usually arranged through a recruitment agency. Kimson agrees a contract to supply your services to the agency and receives payment for your services at agreed periods (usually weekly or monthly).

As an employee at Kimson, you are entitled to comprehensive, ongoing employment rights, granting you statutory benefits like sick leave, maternity/paternity leave, and paid vacation, among others. Opting to work through a recruitment agency on a PAYE basis may not confer this status, making the umbrella company model a more advantageous choice for contractors seeking these entitlements.

No need to worry about invoicing; our umbrella services will handle that for you. Simply provide us with your timesheet detailing the days or hours worked, and we’ll manage the invoicing process. In many cases, you won’t even have to send us a timesheet, as agencies typically inform us of your hours once they receive confirmation from your client.

A portion of the pay rate negotiated with your agency is allocated for your legal holiday entitlement. Should you choose, you can request that we hold onto your holiday pay, which will then be disbursed to you during your time off from the contract work. Alternatively, you have the option to receive your holiday pay with your regular weekly or monthly earnings, giving you access to the funds beforehand. Regardless of the method, your payslip will transparently indicate the amount of holiday pay disbursed to you or the sum contributed to your holiday reserve.

It’s a better way of combining a basic salary, which is at least the national minimum wage, with additional earnings categorised as a commission or bonus. This system accommodates the variability in contractors’ work assignments and rates, simplifying payroll processing.

Here’s a simplified breakdown of the payment structure:

Basic Salary: Paid at the national minimum wage rate.

Commission/Bonus: Represents the rest of the contractor’s earnings, not an actual commission but a term used for the additional payment.

Key Points to Remember:

The term ‘commission’ is used for convenience in payroll processing, not to indicate a traditional sales commission.

This structure doesn’t affect the total earnings due to the contractor; it’s just a different method of calculation.

In case the client or agency fails to pay Kimson, the contractor will still receive the basic salary. The remaining balance (termed as ‘commission’) is paid once Kimson secures the funds from the client/agency.

This approach ensures that contractors are paid consistently while allowing the umbrella company to fulfil its obligations, even when there are delays in payments from clients or agencies.

The compensation package you negotiate with your recruitment agency or direct client encompasses a portion designated for Employers National Insurance (NI) contributions, which are due to Her Majesty’s Revenue and Customs (HMRC). Kimson, acting as your employer, is obligated by law to withhold the Employers NI amount from your salary and remit it to HMRC. This practice is a common procedure adhered to by all umbrella companies that operate in compliance with legal standards.

From the moment you begin until your departure, you will maintain uninterrupted employment with Kimson. Despite having a single employer, you have the freedom to engage in various assignments through different agencies if you choose to do so.

Absolutely, should you have legitimate business expenses during your contractual duties, you are eligible for reimbursement. This is contingent upon the agreement of your agency or end client to cover these expenses and your provision of all required supporting documentation and receipts for your expenses claim.

Yes, we do. Throughout the onboarding process, we will inform you of the payment terms agreed upon with your agency or end client, specifically the timeframe for them to remit payment to Kimson after invoicing for your services. We conduct several pay runs each day and guarantee that you will receive your payment from us on the same day we receive it from your agency, provided the funds arrive prior to our last payroll processing deadline.

Yes, we operate a company pension scheme which will be provided to you during the signup process.

Our fee, known as the company margin, is subtracted from the payments we collect for your contracting services. This margin is comprehensive, encompassing all elements of our service offerings, such as the mandatory public liability and professional indemnity insurance. We ensure transparency with no concealed charges, and we do not impose fees for processing same-day payments. The company margin is only applied for the periods you are actively working. We have established agreements with recruitment agencies across the UK, providing their contractors with a reduced rate compared to our standard margin. This strategy allows us to maintain one of the most competitive rates for umbrella payroll services available. For further details, please consult with our team

Indeed, you have the liberty to choose any company name you prefer (provided it’s appropriate) and it’s not already taken on the Companies House register. The Kimson team is well-versed in assisting contractors in selecting an ideal name for their Limited Company. Don’t hesitate to reach out for our guidance if needed. After you’ve settled on a name, we’ll proceed to establish your Company under that name and handle its registration with Companies House.

We can have you ready to trade within 72 hours in most cases.

To adhere to Anti Money Laundering Regulations, you’re required to submit personal information such as your address, date of birth, National Insurance number, and more. Additionally, we’ll need your business or mailing address, an authenticated copy of your passport or driver’s licence, and a document verifying your address.

Yes, we do. Your company will  be registered for PAYE and VAT where applicable and we can deal with HMRC on your behalf as your agent.

There’s no obligation for your business to register for VAT until your turnover surpasses £85,000. However, you have the option to register for VAT voluntarily even if your turnover is less than this threshold. Often, it’s advantageous to be VAT registered. We can explore the best options for your situation when you join us. Don’t worry, we’ll handle the entire VAT registration process on your behalf.

We process your VAT returns every quarter and share a copy with you for your confirmation prior to submitting it electronically. It’s your responsibility to ensure the payment is made from your company’s bank account. To streamline the process, Kimson can arrange a direct debit for you, alleviating the concern of manual payments.

Alongside reimbursing your business-related expenses, you’ll receive a customised salary that aligns with your individual financial requirements. Additionally, based on your income level and personal needs, you’ll be entitled to dividends, which are distributions of a company’s earnings to its shareholders. These dividends, known for their tax efficiency due to lower income tax rates and exemption from National Insurance, can be transferred from your Company account to your personal account as distinct transactions. Upon registering with us, we’ll arrange a payment schedule that suits you.

Dividends are payments made from a company’s profits or reserves to its shareholders and are a tax-effective method to withdraw money from a Limited Company.

Our services include providing you with management accounts for your Limited Company, detailing the profits and the available amount for dividend distribution. You’ll inform your account manager of the desired dividend amount, and upon agreement, it will be deposited into your personal account. Kimson will also guide you on any personal tax obligations related to these dividend payments.

When it comes to safeguarding yourself and your Limited Company, acquiring the right level of insurance coverage is crucial. As a director of your own Limited Company, it’s essential to meticulously review all contractual obligations and ensure you have adequate protection in place. Here are the key types of insurance you should consider:

Public Liability Insurance: This cover shields your business against claims related to property damage or injuries caused by your company. For instance, if someone is injured on your premises or due to your products, public liability insurance provides essential protection.

Employers’ Liability Insurance: If you have employees, this insurance is mandatory. It covers legal costs and compensation if an employee falls ill or gets injured while working for your company.

Professional Indemnity Insurance: This type of insurance is crucial for professionals who provide advice or services. It protects against claims arising from errors, omissions, or negligence in your work.

Remember, each company’s needs are unique, so it’s essential to tailor your insurance coverage accordingly.

A Director’s Loan occurs when you withdraw money from your company that isn’t a salary, dividend, or expense reimbursement, and the amount you’ve taken exceeds what you’ve contributed. It’s essential to meticulously maintain a record of any funds you borrow from or deposit into the company. This record is typically referred to as a Director’s Loan Account.

The Director’s Loan Account serves as a ledger to track these financial transactions, ensuring transparency and accountability within the company. It allows you to monitor amounts owed to you or by you, including any applicable interest charges. This account holds significance for both legal and tax purposes.

Whilst Kimson offers a full suite of accountancy services, we fully appreciate that you may already have a longstanding relationship with your existing accountant. Why not make the introduction and we can see how Kimson can complement the services you’re already receiving.

Deemed Employment is one of the 3 methods that HMRC has outlined for having PAYE taxes deducted as a contractor. As an option, it has been somewhat eclipsed by umbrella payroll because with Deemed Employment, the recruitment agency will maintain Fee Payer liability for tax deductions, whereas with umbrella, they don’t. Kimson Fee Payer means that the liability sits with Kimson, not the agency. Therefore, for the agency, there’s no real difference between umbrella and Kimson Fee Payer.

Although the rules can be very complex, here’s how it breaks down.

• Off-Payroll Working Legislation (IR35):

• The purpose of the Off-Payroll Working legislation (commonly known as IR35) is to ensure that individuals who work through their own company pay employment taxes in a manner similar to employees.

• These rules apply when a worker, who provides services to a client through their own intermediary (such as a personal service company or PSC), would have been considered an employee if they provided their services directly to that client.

• HMRC introduced these changes to enhance fairness in the tax system, preventing individuals from circumventing employment taxes and National Insurance Contributions by operating through a PSC.

• IR35 Assessment:

• HMRC provides an IR35 assessment tool called the Check Employment Status for Tax Service (CEST).

• Hirers and agencies can use this tool to determine whether a worker should be classified as employed or self-employed for tax purposes.

With Kimson, you can use your Limited Company for all roles.

Kimson are obliged to make the following tax deductions when your role is determined as inside IR35:

• Employer’s National Insurance (NI) and Apprenticeship Levy:

• • • Under the Off-Payroll Working rules (commonly known as IR35), if you’re deemed to be inside IR35, the fee-payer (the party paying your limited company) must deduct and pay the following to HMRC:
    •  
    • Employer’s National Insurance contributions.
    • Apprenticeship Levy.
    •  
    • These deductions are statutory requirements to ensure compliance.

• Rate Calculation:

• • The rate that the agency pays to Giant must cover these employment costs (NI and levy) as well as our margin.
  • To determine your new rate for your limited company, we deduct these costs first. The remaining balance becomes your new assignment rate.
  • This new rate is then subject to PAYE tax and employee’s National Insurance.

• Tax Calculation:

• PAYE tax is deducted using a Basic Rate (BR) tax code of 20%.
  • Approximately eight weeks after you start, HMRC will send us an updated tax code. This ensures we apply the appropriate level of tax.
  • If you leave our service before this updated tax code arrives, you may have additional tax to pay on your self-assessment return.
  • As the fee payer, we are liable for deducting the correct amount of tax, and this liability cannot be transferred to you as the contractor.

Remember, accurate tax handling is crucial, and we’re here to assist you throughout the process!

When it comes to corporation tax, the deemed employment payment you receive from your company is not subject to corporation tax. However, there’s a specific process to follow. When calculating your company’s corporation tax liability, you can deduct the amount of the deemed employment payment. Additionally, you can deduct any Class 1 employer’s National Insurance contributions due on that payment. This deduction is allowed when you calculate the taxable profits for the accounting period in which the deemed employment payment is treated as paid.

Kimson only pay using faster payment. This means that the funds will clear in your account on the same day, eliminating the usual 2-3 working days’ wait for payment to clear. If your agency pays us weekly, we will pay your company weekly. If your agency pays us monthly, we will pay your company monthly.

The IR35 legislation, established in 2000, serves as a framework to classify an individual’s employment and corresponding tax status. Your status under IR35, which hinges on the specifics of your contract and work habits, can be categorised as either inside or outside its scope. Being classified inside IR35 means you are considered a conventional employee for tax purposes, with taxes being withheld at the source and remitted directly to HMRC. Conversely, a classification outside IR35 allows you to manage your finances through a Limited Company, offering more adaptable payment options and the possibility of taking dividends. It’s crucial to understand that assessing your IR35 status requires a thorough examination of both your contract and actual work practices, and therefore, seeking expert advice is highly recommended.

The concept of Supervision, Direction, and Control (SDC) is crucial for contractors to understand. It pertains to how a contractor’s work setup is assessed, specifically if they operate under the oversight, guidance, and command of someone else. Establishing the presence or absence of SDC in a contractor’s work situation is key to identifying their position relative to IR35. This classification has a direct impact on their contracting choices and tax obligations.

The terms are effectively interchangeable. The acronym PSC stands for Personal Services Company, which is essentially synonymous with a contractor’s Limited Company.

AWR stands for Agency Workers Regulations, which were implemented in October 2011. This legislation aims to protect agency workers from discrimination by ensuring they receive certain benefits. These benefits include entitlements to paid holidays, rest periods, working time restrictions, National Minimum Wage, protection against unlawful wage deductions, non-discrimination as per the Equality Act 2010, and workplace health and safety measures. Some of these rights are granted immediately upon starting a contract assignment, while others, like equal pay to a permanent counterpart, are granted after a 12-week qualifying period.

As a contractor engaged with a public-sector client, you may be obliged to engage the services of an umbrella company for your contractual and remuneration processes. This necessity stems from legislative changes enacted in April 2017, which transferred the liability for unpaid taxes from contractors using their own Limited Companies on public sector assignments to the public sector organisations themselves. Consequently, to mitigate this risk, numerous public sector entities now mandate that contractors utilise PAYE umbrella companies, ensuring taxes are deducted at the source, thereby diminishing the public sector’s exposure to tax noncompliance.