The last few years has seen a significant growth in the number and scope of umbrella companies' activities, with many members and potential members asking PCG for advice on how to select an umbrella company that complies with the requirements of HM Revenue & Customs.

It was a natural development, therefore, that as the leading representative body for freelancers, PCG should design and develop a new PCG "Quality" umbrella company scheme. PCG (QU) was developed and is being delivered in association with Parasol, one of the UK�s leading and most respected providers.

It's really simple - click here to register.

An umbrella structure provides a recognised and safe method of accounting as a professional alternative to personal service companies and sole trader arrangements.

Under the PCG (QU) scheme, you will be a flexible employee of Parasol and as a consultant, work on its behalf on various assignments or contracts. You will normally source these yourself and then Parasol will provide all of the administrative back-up, career development and support to allow you to concentrate on the role in hand.

Parasol Ltd does not operate a composite scheme nor any form of employee benefit trust scheme. All payments to consultants are subject to a registered PAYE system.

The deductions made depend on whether you are weekly or monthly paid:

• Weekly paid - weekly administration deduction of just �39.45 for each week, or part week, that you use the facility.
• Monthly paid - monthly administration deduction of just �79.95 for each month, or part month, that you use the facility.

In addition to this, you will also have the standard statutory deductions such as tax, National Insurance and any attachment of earnings that Parasol is instructed to take, such as student loans.

If you have an additional payment in the same payment period that requires Parasol to recalculate and send a balancing payment again, they will deduct a supplementary fee to cover bank costs of �9.50 if weekly paid or �13.95 if monthly paid.

Your salary payment frequency will be selected based on the invoice frequency as stated in the Agency contract.

Parasol will pay you within two working days of receipt of funds regardless of whether you are paid weekly or monthly and deduct accordingly (i.e. if your agency / client has agreed to pay you once a month and pays you twice in a month, they will deduct twice).

Using the monthly fee of �79.95 as an example, PCG (QU) gives you a valuable package of services that would cost you around �112 a month to buy:

You cannot legally work within the UK without some form of employment contract. The employer stated on the contract has certain responsibilities and obligations.

Parasol has a legally binding contract with the agency/end client to supply a person with certain skills to them in accordance with the contract terms. In return for the work that is performed, they will pay Parasol at a set rate of pay for an agreed period.

The agency/end client do not want to assume the employment rights that would normally be associated with employing someone themselves to fill the role. Parasol on its part has agreed to assume the �employment rights� for that person.

Parasol has �employed� you to fulfil that role, and you therefore have a contract of employment with Parasol.

Being a flexible employee of Parasol does not restrict your work as a contractor, rather provides you are working in a safe and complaint way with respect of employment and financial legislation.

The only restriction on use of our service is that you are over 16 years of age and have the permission to live and work in the UK.

As an employer, Parasol Ltd has the responsibility that the company in its entirety and all of our consultants as individuals abide by all current employment legislation. As such, to prove your eligibility to use the service, you will be asked to produce one of the following documents:

• A document giving your National Insurance number and name. This could be a P45, a National Insurance card, or a letter from a government agency or previous employer.
• A document showing that you can stay indefinitely in the UK, or that you have no restriction preventing them from taking employment. This might be an endorsement in a passport or a Home Office letter.
• A work permit or other approval to take employment from the Department for Education and Employment.
• A document showing you are a national of a European Economic Area country. This may be a passport or national identity card.

If you are unsure as to your eligibility, then you can refer to the Home Office website.

When you register online for the facility you will enter some basic details, such as your name, home address and email address, which Parasol will use to send you an email starter pack.

This starter pack will include a checklist of things you need to do before you can use Parasol's facilities.

This checklist details that a contract needs to be raised in the name of Parasol Ltd and includes its Terms & Conditions for your signature. On return of the required information as detailed in the starter pack you will be granted full access to Parasol's online members' area which you will use for the ongoing running of the facility.

The terms and conditions of employment with Parasol Limited state that you should be aware of your obligations in this regard as it relates to the contract that Parasol signs on your behalf. For contractors wholly engaged in an IT role, Parasol provides inclusive cover up to �3 million.

Employers and public liability insurance is also provided as part of the package.

Here are the general guidelines as it relates to Parasol's PI cover:

• Territorial limits: Worldwide excluding USA/Canada, Iraq and some parts of Africa
• Jurisdiction: United Kingdom

Parasol is not normally able to accept the following trades without further information:

• rail industry
• aviation/avionics
• independent financial advisers
• fire security industry
• car production industry

If you carry out work within the above fields, Parasol would need to consider further the type of work you conduct - please email Customer Service  for the required form.

PCG has produced the Quality Umbrella, PCG (QU), in collaboration with one of the UK's leading umbrella payroll solution only provider, Parasol Ltd. PCG chose Parasol because of their expertise in the umbrella field and the track record of providing excellent customer satisfaction.

Parasol's Consultant Support web server uses the SSL protocol with 128-bit encryption and all personal information which you may submit using any registration or ongoing management forms on the Consultant Support website is encrypted and secure during transmission to Parasol.

Parasol's web servers are protected from direct connection to the internet by a hardware firewall and other security methods.

Parasol Ltd operates a very attractive expenses policy that enables consultants using the PCG Quality Umbrella to claim genuine business expenses in accordance with HM Revenue & Customs Schedule E guidelines. Parasol Ltd does have an expense dispensation from HM Revenue & Customs and this helps streamline the processing of claims and year end reporting. It does not provide carte blanche to claim lots of expenses without receipts, which some umbrella companies advertise as a sales "feature".

Parasol Ltd is a safe, professional and reliable organisation. In general terms it allows the following types of expenses:

• business mileage
• receipted travelling
• car parking
• rail fares
• tolls
• subsistence (hotels, meals)
• specific professional subscriptions
• office stationery
• a proportion of phone bills
• congestion charging
• eyesight tests.

You may also claim for training courses and some specific job specific hardware and/or software. Please refer to the user guide for more information.

Other expenses should be claimed via your personal Self Assessment Tax Return. Parasol hopes to extend the type of expenses that can be claimed in the near future.

A list of what can be claimed is available here.

A member expenses user guide is available to download. This document details the procedures and guidelines for claming expenses and you should read it before making your first claim.

A service charter detailing the obligations of Parasol is available to download.

Please note there are some basic administration tasks (entering timesheets and expenses, for example) which you must perform otherwise you will invalidate the service charter. It is therefore strongly recommended that you read this before using Parasol's services.

Parasol Ltd pays your salary as soon as it receives cleared electronic funds from the agency or client. The payment from the agency or client directly relates to the invoice or timesheet (for self-billing) being processed by those organisations.

If an agency or client pays Parasol via business cheque, then there is a separate clearance period as defined in the service charter link below.

The payment process is as follows:

1. Timesheets entered on Parasol Ltd website
2. Paper timesheet sent to agency/client by consultant
3. Invoice generated by Parasol Ltd and sent to agency or client where required
4. Invoice paid to Parasol Ltd by agency/client electronically - when the agency pay us, this will typically take three days to get into our account
5. Parasol receives funds, allocate to consultant and process. Funds sent via CHAPS to consultant bank account.

It is important that you understand the Service Charter terms for the above processes as there are circumstances where the typical timescales can vary (especially business cheques).

There are NO set-up or termination charges. The Parasol administration deduction is completely inclusive.

CHAPS stands for Clearing House Automated Payments System. CHAPS payments are made directly into your bank account with no bank processing delays, so you receive your money on the same day that the transfer is needed.

The only other major issue may arise from your nominated bank/building society � Parasol has experienced problems sending CHAPS payments to the Woolwich and Bradford and Bingley Building Societies and as such would not recommend the use of this product if you bank with either of those two building societies.

The majority of the other high street banks and building societies do accept CHAPS payments but if you are unsure, Parasol recommend you contact your bank/building society directly.

Your employer will be Parasol Ltd � holiday pay is deemed to be included in your weekly/monthly salary and sick pay is available.

Click here for a comprehensive list of benefits, which includes standard PCG membership (excluding Professional Expenses Insurance) as part of the package.

Some agencies are described as being Self Billing.  This is an arrangement between the agency/end client in which they prepare the invoice and forward a copy to Parasol, rather than Parasol invoicing them. This means that as you enter your timesheet the agency/end client raise their own invoice to be billed each time a payment is made.  

The main benefit of self-billing for both you and Parasol is the removal of the requirement to supply invoices therefore resulting in a more efficient payment process. You will however still need to enter timesheets on our website.

Parasol will confirm to you by email that they have deducted your first weekly/monthly admin cost and inform PCG, who will activate your Standard membership. PCG will provide confirmation via seperate email that your membership has been activated.

Back-to-back contracts link the contract that is issued by the agency/end client with the contractor. Parasol accepts the terms of the contract issued by the agency/end client on your behalf, and you accept Parasol's terms and conditions of employment when you join.  The risk relationship between contractor and agency/end-client are detailed within the terms and conditions provided for you. Back-to-back arrangements grant you (contractor) with ownership of the contract and recognise you as an employee of Parasol.

PCG Standard membership includes Professional Expenses Insurance (PEI).

This has been excluded from the membership package for the PCG Quality Umbrella as it is designed for members operating their own limited company. In its place, PCG has arranged an exclusive Personal Legal Expenses Insurance Policy, available only to members of the PCG Quality Umbrella.

Upon notification from Parasol, your PCG Standard membership will lapse.

If your circumstances have changed and you wish to retain your membership of PCG, you will have the option to renew your membership at this stage and retain the same login details.

Please contact the PCG to discuss.

If you wish to claim under the Personal Legal Expenses Insurance policy you need to complete a claim form.

A claim form is located within the Parasol Consultants' Area.

You can contact the Parasol sales line on 0800 584 6000.

Alternatively, please click here for more Frequently Asked Questions on the Parasol website.

If you are an existing PCG member and wish to transfer to the PCG Quality Umbrella, please call our administration department on 0845 125 9899 or email [email protected]

Once we have been advised by Parasol that your umbrella membership has been activated, we will then calculate the unused portion of your PCG membership and refund it to you via your chosen payment method.

Your existing PCG membership UserID will not be cancelled. Once your new membership has been activated, confirmation emails will be supplied as normal.