Reviewing an umbrella company or agency contract as a contractor

A contractor placed through an agency is asked to sign either an agency contract, as a limited company or as a worker, or an employment contract with an umbrella company that the agency has chosen. Each document decides what is deducted from the rate the end client pays, how holiday pay is treated, whether the contractor has opted out of statutory protection, and what happens at the end of the assignment. I review the contract from the contractor's side and return it marked up with a written explanation of what the document does and what to ask to change, for a fixed fee of £495 in three working days.

Who this is for

Contractors, interim managers and temporary professionals in England and Wales who have been sent a contract by a recruitment agency or an umbrella company before starting an assignment, whether they work through their own limited company, as a sole trader or as an umbrella employee, and want to know what they are signing and what they will take home. The agency is an employment business regulated under the Conduct Regulations.

What to look for in an umbrella or agency contract

The key information document and the deductions

Before agreeing terms with a work-seeker, an agency must give a key information document under regulation 13A of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 setting out who pays the contractor, the deductions from the rate, including the umbrella's margin, employer's national insurance and pension contributions, and an illustration of the pay after those deductions. The review checks that the document was given, that the contract's deductions match it, and that nothing is deducted that the document did not disclose.

The assignment rate, the umbrella's margin and unlawful deductions

An umbrella contract states an assignment rate and a pay rate, and the difference covers employer costs and the margin. The review checks that the contract does not describe employer's national insurance as a deduction from the worker's pay, that the margin is fixed rather than variable, that pay never falls below the National Minimum Wage Act 1998 rates after permitted deductions, and that any deduction not authorised in writing is challengeable as an unlawful deduction under section 13 of the Employment Rights Act 1996. The itemised pay statement required by section 8 should show every deduction, and regulation 12 of the Conduct Regulations prohibits the agency from withholding pay because the client has not paid or has not signed a timesheet.

Holiday pay: accrued, rolled up or lost

An umbrella employee is entitled to paid holiday under regulation 13 of the Working Time Regulations 1998, and for irregular hours workers the employer may pay rolled-up holiday pay as an uplift shown separately on the payslip under regulation 16A. The review checks which method the contract uses, that rolled-up holiday pay is shown as a separate line rather than absorbed into the rate, and that accrued holiday pay cannot be forfeited at the end of an assignment or by a clause requiring the worker to claim it before leaving.

The opt-out, agency worker rights and status

A contractor working through a limited company can opt out of the Conduct Regulations under regulation 32, but only if both the company and the individual give notice before the introduction to the client, and the agency cannot make the opt-out a condition of the assignment. The review checks whether an opt-out has been slipped into the contract and what protections it removes. An agency worker who is not opted out gains equal treatment on basic terms after 12 weeks in the same role under regulation 5 of the Agency Workers Regulations 2010. Where the contractor works through a company, the client's determination under the off-payroll working rules in Chapter 10 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003 decides whether the agency deducts tax at source, and the contract should record the determination and the right to challenge it.

Restrictions, fees and the end of the assignment

Agency contracts include restrictions on the contractor working for the client directly or through another agency, and umbrella contracts may charge fees on exit or require notice the client does not give. Section 6 of the Employment Agencies Act 1973 prohibits charging a work-seeker a fee for finding work, and regulation 10 of the Conduct Regulations limits the transfer fee the agency may charge the client, not the contractor. The review checks that notice runs both ways, that the contractor is paid for hours worked whether or not the client extends, and that any restriction on working for the client is one the agency can enforce against the client under regulation 10 rather than against the contractor. The Employment Rights Act 2025 extends the regulation of employment businesses to umbrella companies, and the review notes the position as it is being phased in.

What it costs

Standard review, £495. Marked-up document and a written explanation of the changes. Three working days.

Buying online forms the engagement on payment. The scope is what the contract review page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• Your own contract returned with my amendments as tracked changes, plus a clean version with every change accepted, ready to send to the other side
• Comments in the document where a point needs explaining
• A written explanation of what I have changed and why, by email or as an attachment if it is lengthy, marking the points I would hold firm on and the ones that are negotiable
• A view on what is normal market practice and what is the other side pushing their luck
• One round of follow-up questions by email, included

What is not included

• Negotiating directly with the other side, which I quote separately once I know who is on the other side. Where the other side is willing to share a live document, I can work in that document directly
• Drafting a replacement contract from scratch
• Advice on the law of any jurisdiction other than England and Wales
• Tax, accounting or regulatory advice
• Disputes about a contract that is already signed

Questions I am often asked

The umbrella is deducting employer's national insurance from my pay. Is that legal?

Employer's national insurance is a cost the umbrella meets from the assignment rate, not a deduction from your pay, and the key information document should have shown it that way. The review checks the contract and the illustration, and marks up wording that describes employer costs as deductions from your wages.

I signed something that said I was opted out. What did I lose?

The opt-out removes the protections of the Conduct Regulations, including the rule against the agency withholding pay when the client has not paid. It is valid only if your company and you both gave notice before you were introduced to the client and it was not a condition of the work. The review checks whether yours is valid.

Can I take the job directly with the client when the assignment ends?

The agency can charge the client a transfer fee within the limits in regulation 10 of the Conduct Regulations, or require an extended hire period, but it cannot charge you or stop you. The review checks that the contract's restriction on you is no wider than that, and that you are paid to the end of the assignment.

Related guidance and services

• Contract review, £495, the service this page describes
• Consultancy and contractor agreements, £595
• Reviewing a statement of work from a client

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: September 2026. Email geoffrey@caesar.co.uk.