23-04-12, 09:25 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) [color=rgb(0, 153, 51)]www.pcg.org.uk/. [/color][/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.
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) [color=rgb(0, 153, 51)]www.pcg.org.uk/. [/color][/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.