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What are BACS and CHAPS payments?

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'BACS' and 'CHAPS' are payment terms. 'BACS' is the standard payment and the one that will be used by most Umbrella Companies.

When the Umbrella Company pays you, a BACS (originally an acronym for Bankers' Automated Clearing Services) payment will take three working days to reach your bank account.

The CHAPS (Clearing House Automated Payment Service) payment will arrive into your bank account the same day that payment is made. Banks charge for CHAPS payments, so it is likely that your Umbrella Company will pass this charge onto you.

Many umbrella companies are moving to making FPS (Faster Payments Service) payments. This is a same day payment, but it relies on both the umbrella company's bank account and your bank account accepting FPS payments. It is worth asking your umbrella company whether they provide this service.

Further reading

What freelance contractors should know about umbrella companies

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