If you’re working through an umbrella company or agency this Christmas, HMRC has updated its online tool to help you make sure you’re being paid properly.
Why now?
More than 300,000 temporary workers are being urged to check their pay is correct this festive season. That’s because this period is one of the busiest times for temporary hospitality, delivery and customer service workers and ad hoc projects.
What’s the problem?
Around 700,000 flexible workers in the UK use umbrella companies. The industry isn’t regulated yet, which means while most umbrella firms operate correctly, some don’t play by the rules. And mistakes can be made, like being put on the incorrect tax code.
Common problems include:
- Wrong tax and National Insurance taken off
- Mystery ‘admin fees’ or ‘processing charges’
- Holiday pay not shown clearly
- Small amounts quietly deducted each week
These issues often slip past unnoticed, especially when you’re working short-term contracts and assume the sums are right.
How to check your payslip
HMRC says you should do these checks as soon as you get your first payslip:
Check your deductions
Make sure the PAYE tax and National Insurance match what HMRC says you should be paying for your earnings.
- Check your tax code
- An emergency or wrong tax code could mean you’re paying too much tax.
- Check your holiday pay
- This should be shown separately and clearly on your payslip.
Ask questions
If anything looks unclear or wrong, ask your agency or umbrella company to explain it.
Contact HMRC if needed
If you think your tax isn’t being handled correctly, get in touch with HMRC directly.
Use the HMRC tool
What the experts say
Sam Cox from UmbrellaSure (by Qdos), an insurance provider for umbrella companies, said temps should check their payslips the moment they receive them, which for many is every week.
He pointed out that whilst many umbrella firms are professional and trustworthy, there are also “an alarming volume of rogue operators” in the market.
The good news is that the government plans to regulate umbrella companies by 2027. This should help stamp out bad practice. But until then, workers need to stay alert.
Cox added that checking payslips is especially important over Christmas. Extra hours, overtime and ad hoc shifts can increase your gross pay, but they can also make it harder to spot if your take-home pay is wrong.
The bottom line
You work hard for your money, especially during the busy Christmas period. Take a few minutes to check your payslip and make sure you’re getting everything you’re owed.
If something doesn’t look right, don’t ignore it. Ask questions and use the HMRC tool to check your pay is correct.
