# What is umbrella company?

Source: https://launch-rec.com/glossary/umbrella-company. Category: Compliance. Market: UK.

## Definition

A UK payroll intermediary that employs contractors and processes PAYE on their behalf, used widely for inside-IR35 assignments.

## In practice

The agency contracts with the umbrella, the umbrella employs the worker, and statutory deductions run through the umbrella's payroll.

Agencies remain exposed to supply-chain risk if the umbrella operates a non-compliant scheme, so preferred-supplier lists and audits matter.

## Related terms

- https://launch-rec.com/glossary/ir35
- https://launch-rec.com/glossary/paye
- https://launch-rec.com/glossary/worker-classification