Working through an umbrella company

This post seeks to provide a high-level overview of how the relationship between you, Obelisk and your chosen umbrella works, and the typical deductions which you can expect to see whilst working with an umbrella company. Please note that the specific amount of pay you will receive for your assignment will vary, depending on your personal circumstances and the role that you are undertaking. Your umbrella company will take you through a tailored illustration of the pay you can expect to receive as part of your onboarding process.

Working inside IR35 Rules

The Client is responsible for providing a status determination for your assignment, and Obelisk has no control over the outcome of any such determination. You may appeal the status determination with the Client if you have grounds for believing that it is inaccurate, and the Client must respond to you within 45 days.
When the Client determines that the assignment is to be carried out inside IR35 rules, Obelisk will inform you of the outcome and advise you to find a suitable umbrella company if you wish to accept the assignment. Obelisk will inform you of umbrellas which they have previously worked with upon request, but we can work through your choice of umbrella company as long as they are FCSA-accredited.

To ensure that there are no delays to your assignment start date, you must register with the umbrella directly and Obelisk will follow up with the umbrella to provide your assignment details to them.
Your assignment rate

This is specified on our Job Brief. You will have received this via email from Obelisk. This is the rate that we agree to pay to the umbrella company for your services and is subject to the following deductions by the umbrella in order to arrive at your gross pay rate.

The deductions typically include:
– Employers’ NIC
– Umbrella margin
– Apprenticeship Levy
–
Your gross pay rate
This is the part of your rate that is payable to you and then subject to your standard payroll deductions as an employee. It includes holiday pay, which you can either choose to accrue or to be paid as you go:
– Income tax
– Employee NIC
– Any other necessary deductions, such as employee pension contributions
Please note: the information in this document is for guidance purposes only.
Obelisk Support is unable to provide any tax advice and you should consult a specialist advisor if you feel you need to.

Your net pay

This is your pay after all deductions have been made and will be paid by the umbrella company directly to you.
Obelisk will pay the umbrella company in accordance with the schedule of payment dates and these are approximately 30 days after the last day of the month in which the work was carried out.
So, for example, if you work from the 1st June to the 30th June, Obelisk will pay the umbrella company on or around 30 July. The umbrella should make their payment of the net pay due to you on the same day.
Timesheets and Invoicing

You are required to complete timesheets for Obelisk and your chosen umbrella company. These must be completed within one working day of the end of each calendar month. Please ensure you keep all lines of communication with Obelisk open in case we have any queries regarding your hours. Payments may be delayed if timesheets are not provided on time or if Obelisk is unable to make contact with you.

Once all parties have received your timesheet information, the umbrella will invoice Obelisk on your behalf. There is no need for you to raise any invoices.

Sample illustrations:
Sample pay illustrations will be obtainable from your chosen umbrella and we would strongly recommend that you ask for one to be done to your specific circumstances in order that you understand what you should expect as net pay. We have included below an example of what you might expect to see. This illustration is based on 2023-24 tax rates and assuming no pension auto- enrolment, 1257L tax code, no previous earnings, full time work and an advanced holiday pay model. Umbrella fees can vary.

Based on assignment rate of £750 per day, working 5 days per week for 1 month