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Umbrella Companies - FAQs 

Feeling a bit confused?  Bombarded by information?  As a first time contractor, you will probably be wondering what an umbrella company is, what is involved in using an umbrella company and what benefits using an umbrella company will bring to you.  

In light of this, we've put together the following bit of info which we hope covers the questions that may be floating around in your head.

Although not exhaustive, it should provide you with a good understanding of what happens when working through an umbrella. 

Of course, if you find that your question is not answered please feel free to contact us as our friendly team will be able to cut through the jargon and explain whats involved clearly and simply!

Please use the links below to go directly to your specific question.


What is an Umbrella Company?
Who arranges the contracts with my agency?
When will I get paid?
When do I receive my pay?
Will I get a payslip?
What tax do I pay?
Do I have to pay anything to join or to leave the service?
What do I do if I wish to leave Nasa or have got a permanent job?
How do I claim expenses?
What expenses can I claim?
Will I need to keep receipts?
Does Nasa have a HMRC Dispensation?

What is an Umbrella Company?

An umbrella company is in effect a payroll service for contractors.  By using an umbrella company, you receive some of the benefits of being a limited company, but don’t get bogged down with the extra responsibilities and administration associated with a limited company.  It also means that contractors can be legally tax efficient and avoid all the implications of IR35 and MSC.  So it is perfect for short term contractors or those who do not wish to set up their own limited company.

Working in conjunction with the HM Revenue and Customs, providers of genuine PAYE umbrella companies can allow contractors to genuinely offset business expenses against tax and allow them to save money.  This is also a benefit you would not get if you were payrolled directly through your agency.

The umbrella company becomes responsible for working out the right amount of PAYE tax and National Insurances that you need to pay and for paying it across to HMRC for you.

Who arranges the contracts with my agency?

We will contact your agency and arrange for your contracts to be sent to us.  We will then sign them (as long as your ID requirements have been satisfied) and return them to your agency so you can start invoicing.  You will actually sign a contract with the Nasa Umbrella company that mirrors the contract that we have signed with your agency.

When will I get paid?

The same day we have received money from your agency.  As soon as we receive money from your agency we will process your expenses, calculate the PAYE tax and National Insurances according to your tax code and pay you with a same day transfer.  This is 2 days faster than many other umbrella companies on the market.

We will always pay you as soon as we have received money, without fail - we will never hold any funds back.  If you have not received your pay in your bank, it means we haven’t received any money from your agency. 

When you sign up, we will explain how often your agency pays, and how often you will need to send timesheets and expenses to us.

When do I receive my pay?

As we pay you with a same day transfer, your pay will clear into your account by the close of business the same day we have received it from your agency.

Will I get a payslip?

Yes, by law you have to receive a payslip showing your net pay, earnings to date and any deductions made.  This will be sent to you electronically when we have made payment to you.

What tax do I pay?

As a contractor you will suffer PAYE, Employees and Employers National Insurance.  Don’t worry though as the rate you are paid by your agency includes an uplift for this extra National Insurance so you don’t lose out.  You also get the benefit of expenses tax relief so you will actually keep more of your income.

Do I have to pay anything to join or to leave the service?

No – there are no joining or leaving fees.  You will only pay your weekly administration fee when you are using the service.  There is also no minimum contract period or notice period should you wish to leave our umbrella company. 

What do I do if I wish to leave Nasa or have got a permanent job?

All you have to do is contact the payroll team and request your P45.  We will send this out to you immediately (as long as your last payment has been made) so you can give it to your new employer and they will be able to deduct the correct amount of tax for your new employment going forward.  

How do I claim expenses?

Upon joining the service you will receive a ‘Nasa Umbrella Company Service Handbook’.  This outlines what expenses you can claim and the procedure involved in doing so.  It is very simple and you will need to complete the form and email/fax it to us each time you submit a timesheet.  You will receive tax relief on the valid business expenses you have claimed, for which you have valid receipts. 

What expenses can I claim?

This will be outlined in your expenses handbook that you will receive on joining the service.  Valid expenses will generally fall into the following categories; travel, subsistence, accommodation, postage, training and phone costs.

Will I need to keep receipts?

Yes.  It is very important that you keep receipts for any expenses that you claim, including fuel receipts for mileage and for any subsistence during the day.  If we do not have copies of your receipts we will be unable to process the expenses.  If you are found to have claimed expenses that don’t have a corresponding receipt, you may be penalised by HMRC for doing so and may have to pay the tax anyway as well as any additional penalties HMRC may impose.

Does Nasa have a HMRC Dispensation?

Nasa Umbrella does not have a HMRC dispensation.  Expense dispensations are misleading and only confuse the situation.  Having an expense dispensation from HMRC does not mean that an umbrella company is ‘approved’ by HMRC - they quite simply don’t approve any payroll vehicle.  Nor does it mean that you can claim expenses without keeping receipts – contrary to some umbrella companies claims. 

All it means is that the umbrella company is allowed to declare expenses on a P11D form without including receipts – which allows them to save on administration.  You as the individual who is claiming the expense will still need to keep receipts to back up this claim or you face the possibility of being fined and penalised if your expense claim is challenged by HMRC.  As such having a dispensation is of no benefit to our contractors.

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