How does an umbrella company work?

To put it simply, an umbrella has two primary functions:

  • To act as an employer for contractors

  • To provide an efficient and accurate PAYE payroll service for contractors, while ensuring those who are eligible to claim employment expenses remain compliant.

This is the business activity Cloud9 Umbrella will carry out as an employer. The only income we receive is that which is brought in by our employees, and covers all the costs related to our role as the employer.

What happens at Cloud9 Umbrella?

  • Simply fill out the registration form. If you would prefer to register by telephone, please give our client liaison team a call on 020 7078 0212.

  • Once you’ve signed up, you’ll need to provide us with proof of ID, your address and P45. We will then get in touch with your agency to request a copy of your contract.

  • You become our employee under an overarching contract, with a view to carrying out a succession of assignments for various agencies/clients during the course of that employment.

  • To enable you to work for an end client, we enter into a contract with them, or an agency.Our team will get in contact with your recruitment agency and arrange all of the contractual documentation.

  • You carry out your contracted duties at the temporary workplace.

  • You upload your timesheets to our web portal, and we’ll invoice your agency.

  • The agency or end client will pay us a rate – the contract rate – to cover payments for the work you have completed. This will also include all the costs related to your employment such as employer’s NICs and holiday entitlement. This rate is higher than if you were paid PAYE directly by the agency / end client, to cover these additional costs.

  • On the day the agency releases the funds, we will process the payment and make deductions for Income Tax, NICs, and our margin. Read more about our margin and the breakdown of your pay.

  • The process is now completed! You’ll receive a text or email when your payment is on its way.

Please note: If you are currently with another umbrella payroll provider then you will need to let them know about your decision to join Cloud9 Umbrella. If there is a mandatory leaving period, they will let you know.

Is Cloud9 Umbrella right for me?

Some agencies may have a Preferred Supplier List (PSL) that contains umbrella companies they usually work with. When you sign a contract with an agency, their terms may state that you can only use the umbrella companies on their PSL. However, if this is not the case, you should be free to use an umbrella company of your choice. Many agencies allow contractors to use umbrella companies that are not on their PSL, so it’s always worth asking the question.

Joining Cloud9 Umbrella is a piece of cake. Once you’ve chosen to work with us, we’ll give your agency a quick call to introduce ourselves – if we’re not already working with them.

Are there any dangers when using an umbrella company?

No, but we do recommend you undertake thorough research and choose an organisation that is 100% compliant. Please don’t be lured by promises of a 90% take home pay rate, as these companies may be operating a non-compliant scheme.

How are the Cloud9 employment costs broken down?

Contractors regularly ask us to explain their payslips and breakdown how payments are made. We have produced a useful guide to help understand what contractor see on their payslip and what is paid to HMRC. To enquire with Cloud9 and receive a copy of our Employment Costs guide that we share with all new contractors, please fill in the form to download the PDF. You can also contact us on 0207 078 0212 if you have any questions .

Fill out the form to download the PDF

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    What if I have a Limited Company?

    If you’re looking for your own specialist accountant and support team to help set up or run your limited company, our partner company, K&B Accountancy Group is the one for you. Accredited by APSCo and with over 15 years’ experience in the contractor industry, K&B Accountancy is fully compliant with all legislation and industry regulations. For help, advice or support on your contracting options visit