What happens if my end client refuses to pay my umbrella provider?

If you’re new to umbrella contracting, you might be wondering what an earth happens in the event that your end client isn’t happy paying your umbrella provider.

While this could happen for a number of reasons, it’s usually because the recruiter or end client has reservations about the legitimacy of the umbrella provider.

Even if they have paid you through this umbrella before, they can unfortunately still turn around and change their mind.

Instead, your client may offer a list of alternative ‘approved’ umbrellas to choose from.

Here at Mint Umbrella, we always recommend researching the umbrella provider you’re planning on working with before agreeing to anything.

Green flags to look out for include:

• Being accredited by Professional Passport/FCSA/APSCo

• Pay transparency – offers to provide you with a pay illustration and doesn’t claim to save you tax

• Easy to contact and happy to answer any queries

“What are my rights in this situation?” 

In short, it depends on your contract. Under the Conduct of Employment Agencies and Employment Businesses Regulations 2003, the end client is not able to withhold funds if there if there is an ‘opt-out’ in place because it will be viewed as a ‘work-seeker’.

However, if your recruiter/client has concerns about your chosen umbrella, they likely have good reason and you should definitely reevaluate whether it is truely compliant with UK tax law.

For example, if you are getting take-home pay that vastly differs from the umbrellas on the ‘prefered suppliers list’ then alarm bells should start to ring. If the correct taxes and deductions are being made, there should not be noticeable disparity between the take home pay being offered by different brollies.

Key takeaways? 

Overall, it is crucial to be diligent when it comes to selecting an umbrella provider. This can save you a lot of hassle down the line. Plus, you don’t want HMRC knocking at your door when it turns out you owe them tax!

We also recommend looking at your contract in depth before agreeing to take on a new project so you can check the terms and conditions regarding approved umbrellas, moving between umbrellas mid-contract etc.

Looking for a Professional Passport approved umbrella? Speak to our team on 0203 967 6846 today to find out more about working with Mint!