Introducing Umbrella Company Freeclaims

The Law Place Limited is pleased to announce the launch of Umbrella Company Freeclaims, offering free Particulars of Claim to support contractors who have been forced to use umbrella companies reclaim unlawfully deducted employer’s National Insurance contributions, the Apprenticeship Levy and underpayments of annual leave. Unfortunately, umbrella companies often receive bad advice and the aim of Umbrella Company Freeclaims is to allow contractors who have suffered abuse from “non-compliant” umbrella companies to obtain redress without incurring expensive legal fees or risk from high court litigation.

In a recent article in LinkedIn, The Law Place Limited’s director set out the law regarding umbrella companies. Contractors using umbrella companies sometimes find that employer’s National Insurance contributions have been unlawfully deducted from payment owing by the umbrella company. Technically an unlawful deduction from wages has not occurred when employer’s National Insurance contributions have been taken from the rate charged by the umbrella company to the recruiter (sometimes called the “assignment rate” by anyone but lawyers) as covered by HMRC in their non-statutory guidance note ESM2390. Nevertheless, The Law Place Limited regards the practice advocated by HMRC as unethical and employer’s National Insurance contributions should be paid by the recruiter’s client (i.e. the hirer).

The Particulars of Claim also covers underpayment of annual leave, payment for annual leave on a rolled-up basis and non-payment of annual leave upon termination of employment. Let’s be absolutely clear; it’s never acceptable for payment to be made on a rolled-up basis.

The Particulars of Claim are to be used for claims in the Employment Tribunal with form ET1 and a grievance letter must be sent to the umbrella company before a claim to avoid a reduction in the award if your claim succeeds. The time limit for starting a claim in the Employment Tribunal is 3 months less 1 day from termination of employment or 3 months from the date of the last deduction. The Particulars of Claim are intended to be attached to an ET1 claim form and must be supported by evidence including the written contract of employment and a Schedule of Loss (ideally prepared by an accountant). The Schedule of Loss must show that the deductions of employer’s National Insurance contributions have been taken from the gross amount payable and not the assignment rate charged by the umbrella company to the recruiter (or client if the engagement is direct). The Schedule of Loss must clearly particularise the losses.

Simply download the Particulars of Claim, fill in the areas in square brackets and delete the passages that are not relevant.

If you require advice regarding the Particulars of Claim or your claim generally, the standard rate of £150 per hour applies. If you have a question about the Particulars of Claim please use the contact form to arrange a paid phone call. Pro bono assistance may be available if you are currently receiving JSA or income related ESA. Alternatively, please consult Citizens’ Advice. 

This free offering does not in any way constitute legal advice and The Law Place Limited accepts no liability for use or misuse of the Particulars of Claim. 

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