Why You Should Never Supply Teach Under an Umbrella Company

At Eteach, we believe passionately in fair and transparent dealings with all of our candidates and schools. After all, we are run by teachers for teachers.

As part of this, we don’t use umbrella companies to pay our supply teachers. The reason is simple: we don’t think it’s fair that you are quoted a rate for your day, only to find you have to pay an extra fee to your umbrella company out of it!

How do umbrella companies work?

Many supply agencies use an umbrella company to act as the legal employers of the supply teacher, responsible for the payroll costs and NI contributions. Unfortunately, the umbrella company, in many cases, passes these costs on to the supply teacher or charges the supply teacher a fee of £20 – £30 a day, dramatically reducing your actual take home pay.

At Eteach, we tell you in advance how much your pay will be and we don’t expect you to pay any additional fees. We pay you electronically via PAYE, which means we deduct your National Insurance and tax for you, then the amount you receive is all yours. Our PAYE deductions are shown clearly on your P60.

Other reasons to be wary of umbrella companies

Restricted movement: umbrella companies normally insist supply teachers give notice before leaving so they aren’t able to take work from other agencies at the same time.

Union advice: most teaching unions are keen to warn supply teachers about umbrella companies. For example, The NUT questions the principles of umbrella companies for draining funding away from schools and “has substantial reservations about umbrella companies’ role in the supply teacher market and advises members against entering into such arrangements wherever possible”.

Umbrella companies are so risky that the Labour Party even promised to ban them in their last manifesto.

Vague tax relief promises: Many supply teachers agree to work for umbrella companies thinking that they are entitled to tax relief on their expenses, only to find that the rules are open to interpretation and may not have been as straightforward as promised. Full information about tax for temporary workers can be found on HMRC.

Questions a supply teacher should always ask before joining any agency:

1. How long has the company been operating? Look for a well-established company that hasn’t sprung up overnight.
2. What fees do you charge? An umbrella company may quote you a higher day rate but if you then have to pay an extra fee, your take home pay can work out much lower than it would have been via PAYE.
3. How long will you take to pay me after receiving my timesheet?
4. Do I have a dedicated account manager? Do you have a level of service I can expect?
5. What technology do you offer? Can teachers submit timesheets electronically or manage payslips, paperwork or invoices online?
6. Do you offer any other benefits?
7. What insurance does the agency hold and what insurance does it expect the supply teacher to take out?

If you are interested in supply teaching with an agency that has 15 years’ experience putting the right teachers in the right schools, please call us at Eteach today on 01276 674150 for a commitment–free conversation to find out what we can do for you!

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