“With FPS you don't feel like 'just a number', the service is
very personal and they really understand our sector.”
Introducing FPS Goup ...1
Umbrella Company Services ...2
Agency Benefits ...3
Umbrella... Personalised ...4
Technical Information...6
Service Commitment...8
…and our
Groundbreaking Solution
As well as being experienced, transparent and regulated, we have also designed a unique product called the Personal Service Umbrella, or PSU, which is safer for both the contractor and agency than standard umbrella arrangements. On the following pages we describe the benefits of umbrella companies generally, and then introduce the PSU.Introducing FPS Group…
Established in 1994, FPS Group is the industry’s most trusted and transparent umbrella company
administrator.
The group has been highly successful, reinvesting profits, growing organically and evolving to meet changing legislation. We remain a family business without third party borrowings, equity or influence. Our head office is based in the Isle of Man but we do not provide any offshore tax structuring solutions. Over 50% of our 70 strong admin team have worked with us for more than 5 years, providing valuable experience that our customers benefit from.
We are the UK’s only regulated umbrella company provider and firmly believe that compliance and security are of paramount importance. No agency or contractor funds ever leave the UK - we invoice the umbrella company for the administration fee only once the contractor has been paid.
Contractor Benefits
An umbrella solution is a simple and compliant way for contractors to get paid.
•
They become an employee of the umbrella company instead of the recruitment consultancy.•
The amount of tax and national insurance they pay is reduced by offsetting HMRC allowable business expenses such as mileage, food costs, training, professional memberships etc.•
Funds are paid to the contractor with all PAYE deductions having been made, so there is no need to employ an accountant or complete complex tax returns.•
There is no directorship appointment or company paperwork for the contractor to undertake.•
There is no charge during periods when they are between assignments and no sign-up or exit charges.By utilising an umbrella company, contractors usually earn significantly more than if they were working directly through a recruitment agency. Please see the contractor information included in this brochure for details.
Additional benefits include:
•
Free business insurances* - Professional Indemnity, Public Liability and Employer’s Liability.•
One employer/tax code regardless of the number of agencies a contractor is working through.•
Continuity of employment / payslip history that can be helpful when applying for mortgages and personal loans.* Certain exclusions apply.
Umbrella Company Services
Umbrella companies are a useful way of managing contract workers, with benefits for both the
contractors themselves and their recruitment agency.
Margins
Agency margins are improved as the umbrella company will charge less for the candidate’s services than the equivalent agency payroll cost.
Administration
The paperwork and administration involved in running a temp desk doesn’t always fit naturally with the sales focused individuals that make the best recruiters. Using an umbrella company allows them to concentrate on making fees instead of answering pay queries, organising holiday pay and time off, discussing candidate welfare/health and safety or sending out payslips, P45s and P60s.
Agency Benefits
Recruiters are there to find the right candidates and place them in the right jobs. Using umbrella
companies will ensure that they are making the best margins possible and reduce the administrative
hassles of running a temp desk.
Candidate Rate of Pay
Agency Payroll:
Umbrella Payroll:
Holiday Pay Employer’s NI Standard Margin Charge Out Rate of Pay Candidate Rate of Pay Uplift INCREASED MARGIN Charge Out Rate of Pay1
Instead of having a lot of people under one umbrella, each PSU exclusively employs a single UK contractor - in other words, everyone gets their own personal umbrella company. All FPS administered PSUs are structured as follows:
•
UK limited companies, with UK banking arrangements.•
Registered as an employer with HMRC - Income Tax, National Insurance and Corporation Tax are paid directly to the UK authorities.•
Full PAYE deductions are made on all contractor payments in strict accordance with HMRC guidelines.•
Business expenses can be offset, in line with HMRC guidelines, but Income Tax and National Insurance will always be paid on at least the minimum wage.•
Operated on a ‘Comparator’ (equal-pay) model for the purposes of the Agency Workers Regulations (AWR).•
One low fee per week/month, with no upfront or exit charges.•
Incorporated and fully administered by FPS Group, ensuring no paperwork or directorial responsibilities for the contractor.•
They are registered for and charge VAT where applicable*.Umbrella… Personalised
In standard ‘group’ umbrella services, all of a provider’s contractors are employed by a single limited
company that sits within its group structure. We have identified a number of weaknesses and risks
in this model and have launched a unique solution: the Personal Service Umbrella (PSU).
* The Isle of Man is part of the UK for VAT purposes. Please feel free to refer to Section 3.2 of HMRC’s VAT Guide or contact us if you require further clarification. ** Certain exclusions apply.
The benefits of this set up are significant:
•
Each PSU is beneficially owned by the contractor and not FPS Group. This guarantees protection of contractor funds in the unlikely event of FPS Group insolvency.•
As each PSU is a unique entity, contractors’ money cannot be affected by other workers’ AWR tribunals. This ‘honeycomb’ system ensures protection from class actions.•
UK auto-enrolment pension legislation is delayed for PSUs, by virtue of being single employee companies. This saves agencies the administrative burden and potential loss of margin until circa 2017.•
Agencies engaging with multiple PSUs need only make a single payment to a regulated ‘client monies’ account, reducing administration and financial risk.AGENCY
PAYE
STANDARD
GROUP UMBRELLA
ST AND ARD BENEFITSHigher agency margins
N/A
N/A
N/A
Offset business expenses Business insurances**
Online portal for umbrella administration
LEGISLA
TION/RISK
Protected from AWR class actions
Pension auto-enrolment deferred until 2017 Electronic Crime insurance in place
Regulated by a Government body
Client money segregated from company funds
PERSONAL
SERVICE UMBRELLA
Industry Regulation
The umbrella industry is generally unregulated. Some providers regulate themselves but, as they make up their own set of rules, it affords little protection to the agencies and contractors that work with them. FPS Group is the only UK umbrella company administrator that is regulated by a Government body. This means that:
•
Directors and key staff are thoroughly vetted before appointment.•
Appropriate internal controls, policies and procedures must be in place.•
Independent internal audits and compliance procedures must be undertaken regularly.•
FPS must maintain prescribed levels of Professional Indemnity insurance at all times.•
FPS must maintain its own liquidity above statutory solvency tolerances. We are subject to audit to confirm compliance.•
Client funds must be ring fenced (held separate to the main trading account) and reconciled regularly.•
Anti-money laundering legislation must be strictly adhered to and a Compliance Officer/Money Laundering Reporting Officer must be appointed.•
Internal affairs must be organised and controlled in a responsible manner.•
High ethical standards must be promoted.No Offshore Structuring
Offshore structures designed to avoid taxation are a danger to UK recruiters and contractors that use them and offer unrealistic returns. The PSU is an entirelyonshore solution and we are happy to
provide as much information as you require. They are incorporated in the UK, have UK banking arrangements and are registered as an employer with HMRC. No contractor money leaves the UK.
Technical Information
Both legislative and commercial risks are important considerations in choosing a payroll solution.
FPS Group designed the Personal Service Umbrella with this in mind.
•
The PSU belongs to the contractor and not FPS.•
The PSU stands as a separate legal entity from FPS and all other PSUs.•
The PSU banks through a regulated client monies account. The bank warrants this as segregated from FPS Group funds and so not belonging to FPS in the event of insolvency. This approach means agencies can fund multiple PSUs in a single remittance.Each contractor is employed by their own umbrella company, which contains only their funds. No class action or claim can be made against a central pot of funds, as all contractors are employed by different PSUs.
Financial Loss
Legal Claims
Some agencies recommend contractors start their own company by referring them to a provider of ‘Limited Company’, ‘PSC’ or ‘Accountancy Services’. When doing so, urgent consideration needs to be given to the IR35, Managed Service Company and Transfer of Debt risks. These can only be avoided where contractors can demonstrate, in practice, being in business on their own account.
The PSU only makes contractor payments subject to the PAYE and National Insurance regime:
•
There is no risk of challenge for unpaid tax and penalties on either the contractor or agency as a result of ‘dividends’, ‘loans’ or other disguised remuneration methods.•
Contractors are not subject to IR35 as they are engaged as employees of the PSU.IR35 and MSC Legislation
In a standard umbrella model, the umbrella company invoices the agency for the service, taking the
money into their own beneficial ownership. When umbrella companies have gone into
administration, it has resulted in a loss of contractor funds and reputational damage to the industry.
The PSU is different:
Agencies
A dedicated Account Manager will be appointed to look after all your needs. They will be your first point of call for all referrals, queries and concerns. As well as a helpdesk number, we will be happy to provide you with your Account Manager’s direct line and email address.
Contractors
Contractors will be appointed a dedicated Client Relationship Executive to support them. They will be proactively guided
throughout their initial 12 weeks of working via an FPS administered PSU, or until they are completely confident with the service.
Service Commitment
At FPS Group, we are passionate about providing a bespoke, one-to-one service, to meet the needs
of both our agencies and contractors.
Summary
FPS Group is one of the most longstanding administrators to UK umbrella companies, a constant
‘thought leader’ and the only one that is regulated by a Government body.
The Personal Service Umbrella (PSU) is far superior to the standard ‘group’ umbrella model offered by other providers. By utilising the PSU, you will be:
•
Helping your contractors to make more money.•
Increasing your margins.•
Future proofing your business against changing legislation.•
Protecting funds throughout the supply chain, from the agency to the contractors’ pockets.“FPS are always ahead of the game when it comes to legislation
affecting the recruitment industry. Their response is always
innovative, relevant and, more importantly, effective.”
- Chief Finance Officer
tel //
0800 634 4848
email //
sales@fpsgroup.com
web //
www.fpsgroup.com
FPS Group
0800 634 4848 sales@fpsgroup.com www.fpsgroup.com
Viking House, St Paul’s Square, Ramsey, IM8 1GB
FPS Group is the trading name of Freelance Professional Services Ltd
Information for Contractors - Umbrella
FPS Group offers a convenient and reliable way to get paid whilst out working on temporary assignments.
Using our Umbrella solution, business expenses can be processed, making it a more tax-efficient
alternative to being paid on your agency’s payroll.
Pay Increase
Potentially higher take home pay than you currently receive on your agency’s PAYE.*
Customer Service
Easy and quick sign up process. Dedicated Client Relationship expert to look after all your needs.
Online Discounts
Free access to FPS Rewards, giving you discounts at major online and high street retailers
Ease of use
Secure online servicing facilities to manage your FPS account. Use your smartphone to submit expenses.
No Hassle
One tax code, avoiding
unnecessary overpayment of tax. Eliminate administration of invoicing and tax payments.
Claim Expenses
By claiming for business expenses you incur as part of your contract, you can save on both income tax and national insurance.
Hourly rate
Agency PAYE
weekly net pay
FPS administered PSU
weekly net pay
Increase in weekly take
home pay using a PSU
£8.00
£10.00
£25.00
£277.20
£331.60
£721.66
£283.44
£374.64
£793.96
Take home pay comparison:
· Training and Additional Qualifications
· Any work related mileage undertaken
· Professional memberships & subscriptions
· Parking and toll charges
· All food and drink consumed whilst out on assignment
· Travel to and from your temporary workplace by car, motorbike, bicycle, or public transport
+£43.04
+£6.24
+£58.90
*Based on a 1060L Tax Code, working 40 hours a week, being over 21 and under state pension age, claiming weekly expenses of £150 (subject to National Minimum Wage legislation). 13.8% rate uplift, £24 weekly administration fee.
For a full list please visit www.fpsgroup.com
Expenses
+£72.30
Information for Contractors - Limited Company
FPS Group offers convenient and reliable ways to get paid whilst out working on temporary assignments.
Via our affiliation with Method Accounting we are able to provide contractors with their own limited
company.
Hourly rate
Agency PAYE
weekly net pay
Method ltd company
weekly net pay
Weekly take home pay increase using ltd company
£15.00
£25.00
£75.00
£467.60
£721.66
£1881.66
£610.54
£995.09
£2330.42
Take home pay comparison:
0800 634 4848
tel
+£273.43
+£142.94
+£418.55
Based on 8060 annual salary, working 40 hours a week, 46.4 weeks per annum, being over 21 and under state pension age, claiming weekly expenses of £150, 13.8% rate uplift, using essentialMethod service. *Joining flat rate scheme (where appropriate) at 12% **Includes any additional tax due
For a details please visit www.fpsgroup.com
IR35
Guide
+£448.76
£50.00
£1301.66
£1720.21
They provide the following:
If you are a long term contractor and outside IR35, your own
limited company might be right for you as a tax efficient
alternative to being paid on your agency's payroll. Our affiliate
Method Accounting can discuss the pros and cons of setting up
your own company.
An FPS Group consultant would be happy to have a no
obligation discussion with you and provide guidance specific
to your circumstances.
Accountancy and financial management
· Payroll, PAYE & RTI
· VAT compliance
· Company secretarial
· Personal taxation
·
Available services, from as little as £125+VAT per month:
· Corporate tax compliance
