Date: 28-03-24  Time: 22:17 pm

Author Topic: Umbrella companies...  (Read 5178 times)

reaperx

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Umbrella companies...
« on: 22 April 2012, 05:55:33 pm »
Has anyone had any dealings/worked for an umbrella company?
 
Any help advice / horror stories etc :D
 
Thanks in advance.

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Re: Umbrella companies...
« Reply #1 on: 22 April 2012, 07:01:35 pm »
Well at this time of year they should have many openings....................... sorry, I just couldn't resist.
I used to not give a foc, then I discovered Red Bull and now I don't give a flying foc !!!

reaperx

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Re: Umbrella companies...
« Reply #2 on: 22 April 2012, 07:04:16 pm »
lol I was sorta expecting one or two of those sorts of replies!  :lol

Andy Clap

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Re: Umbrella companies...
« Reply #3 on: 23 April 2012, 08:34:13 am »
I'm using PlanIT Services (also known as PlanIT Solutions).  http://www.planitservices.co.uk
Very happy with them, and about the cheapest fees out there.  I would recommend.


emjaykay

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Re: Umbrella companies...
« Reply #4 on: 23 April 2012, 09:25:34 am »
I have used a couple and they are scumbags to a man. They play the view that if you go with them there are many legislation & tax benefits. There isn't.


They will NOT protect you against IR35. Some of them will tell you they will pay you a minimum wage and pay the rest in dividends so you will pay less tax. 2 things to worry about here onshore and offshore:


Onshore they may tell you 'Pay yourself' 1p under NI and take the rest in dividends for you and your wife. IR35, S660 and other HMRC clauses may hammer you on this eventually.


They even offer to pay these dividends offshore and you get a foreign credit card to get you 'tax free' moulah!


The HMRC are well aware of this, have links into all EU countries, some offshore havens and will come after you eventually. I know of 2 instances where the HMRC waited until the very last minute under the 6 year rule then started to ask the questions. It bankrupted 1 friend and almost ruined another.


If you want to be a contractor and use an Umbrella find a reputable one (good luck here). Your 1st port of call should be the Professional contractors group (PCG) www.pcg.org.uk/. [/size]They have a wealth of info and are well worth joining. I have been investigated a couple of times (they ended up owing me...bargain) and joining this lot get you free tax investigation insurance.
[/size]
[/size]Hope I have not burst your bubble but I have seen to many horror stories of umbrella companies above is just an example of the crap they can drop you in. Over charging, exorbitant fees, failure to pay, late paying, going bankrupt and when the HMRC come a calling 'it was not me guv we just did what he asked us it is his/her problem'
[/size]
[/size]Just climbing of this high horse as we speak.

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Re: Umbrella companies...
« Reply #5 on: 23 April 2012, 01:40:18 pm »
I've worked for a few too,

They are a con used by agencies to get out of employment laws.

Different agencies will have different umbrellas they use. that's how I've worked for a few. can't sign up with one of them and then use it on the  next temp agency job, have to sign up to that agencies umbrella.

They basically turn a normal temp who would work on PAYE and all the standard stuff, Holidays sick pay and such, into a self employed person.

They usually give you some  bullS**T  expense claim forms to fill out weekly for meals travel and such.




Andy Clap

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Re: Umbrella companies...
« Reply #6 on: 23 April 2012, 02:25:00 pm »
Guess it depends how much you're earning.  I have a low paid contract 2 days a week; my own limited company and accountant would cost too much, the umbrella don't have to pull any stunts with HMRC (IR35) 'cause I don't earn enough to bother with divvies.  Yes they do get me to fill in expenses forms for legitimate travel and subsistence, what's the problem with that?
If you're worried about IR35 then submit your contract to HMRC for an opinion.  I've never known them to tell anybody I know (myself included when I did this seriously) that they're caught by IR35 (you will find plenty on Contractor UK who have been no doubt).
As I say, depends what you're earning.

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Re: Umbrella companies...
« Reply #7 on: 23 April 2012, 08:31:18 pm »
I'm a construction day labourer usually earning about £7 an hour.
For a few days work or a week or 2, if I'm really lucky  :\
Jobs will usually get advertised with two pay rates, one a quid of more higher than the other. The higher rate will be the Umbrella company rate.



Quote
Yes they do get me to fill in expenses forms for legitimate travel and subsistence, what's the problem with that?

If I'm working as self employed I will join the CIS and sort my tax and NI out myself, but I'm not.
I'm working for an employment agency who charges a fee for my work, and then dumps me on an umbrella company to get out of various legal responsibilities to employees.
And I have heard from some who have got their accountants to look into it, leaves me exposed to legal claims from creditors to the umbrella company if it goes tit's up.
I've got nothing to worry about on that score,(I haven't got Nuffink) but the guys that looked into it were trades who owned their own houses and stuff

reaperx

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Re: Umbrella companies...
« Reply #8 on: 23 April 2012, 10:09:23 pm »
Thanks for the replies all, I suppose what it comes down to is they are ok if you get a decent one. I thought about the LTD company route but being a first timer I dont really want the agro of setup/shutdown if contracting doesn't work out for me. Having said that I work in a obscure IT function and there arn't really that many of us, and day rates currently being advertised are significant enougth to make me think it may be worth a punt.

Andy Clap

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Re: Umbrella companies...
« Reply #9 on: 24 April 2012, 09:27:54 am »
I work in a obscure IT function and there arn't really that many of us, and day rates currently being advertised are significant enougth to make me think it may be worth a punt.
Deffo sounds like you should have your own Limited Company to me.  Easy to set up, VAT advantages.  Expect to pay an accountant £100-120/month (I stand to be corrected on this).  They may even do a free company registration to get your business.


Good luck.  What obscure IT function is it?  Legacy ERP?


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Re: Umbrella companies...
« Reply #10 on: 24 April 2012, 10:23:08 am »
I agree, just form your own limited company and find a good accountant. I've been 'limited for over 10 years and had no problems, I pay a small premium to my accountant as insurance against sudden HMRC audits just in case but still only pay £90 a month plus a small amount each year for my personal tax being sorted.
 Don't worry about IR35, they stopped chasing IT peeps years ago and few were caught out anyway. I've been doing work for the same firm for years but can hardly be called an 'employee' as IR35 defines it, ie I cannot comply with the firms standard terms of employment (ie my hours are erratic, I have 3 months a year off, I do work for other firms and use my own equipment etc..)
  A nice little bonis is that as a 'company director' all insurance premiums for bike/car/house/teravel are cheaper  :)

reaperx

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Re: Umbrella companies...
« Reply #11 on: 24 April 2012, 12:57:27 pm »
Nothing quite so rare as legacy ERP :D I'm an Incident & problem manager (waits for incoming from the techies  :rollin ). I'm planning a years trial to see if I like it and there is enougth work available, if that works out then I will deffo go down the LTD route if not then I should have enougth saved to have a very lazy few months before I go back to the grinder :)

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Re: Umbrella companies...
« Reply #12 on: 24 April 2012, 01:13:03 pm »
Speak to an accountant who advertises as specialising in small businesses and go Ltd. company.

I used an umbrella company for 4 years because I was thought ltd co. was too complicated - it isn't.

I pay about £800/year for my accountant, and that includes personal tax returns for me and my wife (you also pay that money from your company account i.e. no tax). They ask you what salary you want to pay yourself and they supply all the figures for tax etc. If you need any specific advice, PM me and I'll run you through the basics.

Word of advice though, it's tempting to play a number of tax avoidance (not evasion!) tricks that are available to contractors running ltd companies- don't play them all (ie don't be the low hanging fruit for the tax man).

For example, my wife isn't a director and I pay myself above minimum wage - I don't claim for cars etc. (but I do claim for mileage) - a good accountant should be able to give you sound advice.

Any expenses you incur can be claimed tax free from you own company, and I have a business account with HSBC that hasn't cost me a penny in 5 years.

One last piece of info: Accountants are now legally obliged to inform HMRC (without your knowledge) if they think you are up to anything dodgy, so play it straight, it's amazing how much money you can save in a year with a nip here and tuck there - all completely legal.



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Re: Umbrella companies...
« Reply #13 on: 24 April 2012, 04:20:52 pm »
I've been Ltd for 10 yrs - vat reg so get vat back on all sorts of things 'work' related like computers, mobile, broadband etc.

Umberellas must have a very limited use if any at all!

Accountant is about £800pa and does all the annual filing, but not the VAT.

emjaykay

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Re: Umbrella companies...
« Reply #14 on: 24 April 2012, 04:51:22 pm »
I have been limited for 16 years and it has served me well. Got involved with Umbrella companies when doing a foreign contracts with a UK based company.

Some good advice on here. A good accountant is key i have had mine for 12 years my 1st was a complete balloon cost me thousands in unnecessary tax. But remember a bog standard accountants job, in my view, is to ensure you pay the right amount of tax! The other advice you have been given on here about them having to declare to the HMRC if you are suspect is spot on. I took the view 7 years ago that their main role was working for the Inland revenue and companies house and then worked from there.

the other thing you need to consider is what rate you will be charging out at £300+ then you not only need a good accountant but an IFA as well. £500+ think about a tax accountant cos they are worth their weight in gold.

My IFA setup pensions insurance etc that reduced corporation tax bills etc.

Chillum

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Re: Umbrella companies...
« Reply #15 on: 24 April 2012, 08:07:41 pm »
emjaykay, that's a good point on the IFA. I use one mainly to help me get mortgages without having to supply my company or personal accounts to the bank (a bit like self-certified used to be a couple of years back). You need a top credit rating to work it that way though.


reaperx

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Re: Umbrella companies...
« Reply #16 on: 24 April 2012, 09:08:26 pm »
 :) Thanks guys I appreciate all the advise, got some things to consider but I think I may just go for it :)