Umbrella Company?

#21
I gave been offered a contact with an agency who does not want to pay me as PAYE.
But want to me to set up as an Umbrella Company, what are the pro's & con's with this?
I want the work, but do not want to get shafted by agency or HMRC!
Better to set up your own Ltd Co and be in control of your own destiny .....and tax payments.
I `ve just had a large unexpected tax bill after doing 9 months for an agency through an umbrella company , never again.
Umbrella companies are parasitic and unnecessary .
 
#23
Setting up a Ltd Co is very simple and relatively cheap.

Find an accountant who is versed in small Ltd Co's and can handle your tax.

That is what I did almost 30 years ago.

It will cost less than an umbrella company although you will still have to make an IR35 declaration at the end of the year i.e. how much of your income comes under IR35.

Also gives you the flexibility to work for other people doing one-off jobs etc. That is more or less how I started, on a contract that would have been covered by IR35 (but pre-IR35) but then in 1998 I started doing work for other people on a one-off basis and made a complete jump to an independent company in 2000 working independent of agencies.

IR35 came in in 2000 but since then I've managed to ensure that the work I do has been totally IR35 exempt.

Your accountant should send you a declaration form for IR35 every year.
 
#24
^
Wot 'e said.

Like solicitors, accountants will give you half an hour or so of free advice to help you decide if you wish to retain their services going forward. Use it.
I remember when I set mine up I interviewed 4 accountants. Walked into the first one with half a clue and some questions, his responses generated more questions which the next one was asked....and so on. I effectively got a couple of hours of free consultancy before choosing one.
 
Last edited:
#25
Problem is too many people took the proverbial.

I know the guy that set up Contractor Financial; I did the pensions for many of the big umbrella operators. Top tip is to avoid those set up in the IoM.
Anything offshore is a shit magnet if they can get a toehold into looking into you. In any dealings it needs to be addressed as a totally separate company without your name appearing on any paperwork emanating from it.
 
#26
One thing I forgot to mention. If an agency insist you use a specific Umbrella company there's a good chance they either also own that Umbrella company or receiving a generous referral fee from them.
 
#27
And one thing that has just sprung to mind. I did see one UC offering 'insurance' against any IR35 investigation as part of their package. Not sure if this just covered any additional accountants fees occurring as a result of the investigation or if it also covered any fines raised if found to be none IR35 compliant (I suspect the former). I also didn't check as to who the underwriters for the scheme were.
 
#28
we were all forced to go either PAYE of limited company, I went PAYE, working through the agency's, but being paid through a third party , which stung me for between £15-20 per week, handling fee, your expenses will be returned with receipts submitted,
£15 a week is about the lowest fee you could expect to pay any accountant to prepare you 'books' for a Ltd company, so you weren't paying anything high by comparison but I do understand where you're coming from. Why should you have to pay anyone to run your payroll if you're PAYE and not self employed?
 
#29
£15 a week is about the lowest fee you could expect to pay any accountant to prepare you 'books' for a Ltd company, so you weren't paying anything high by comparison but I do understand where you're coming from. Why should you have to pay anyone to run your payroll if you're PAYE and not self employed?
In the distant past, the agency's had payroll staff in house, then they subbed it out to third party shyster pay agency's, somewhere along the line the worker got ripped off. I have contacted my MP on the subject, and she says it is morally wrong, but legal. I contacted the BBC "Rip off Britian" and they said they would not investigate, beacause it involves government agency's.
The whole scam needs to be dismantled, why should a worker on PAYE pay to be paid , if Tesco workers were forced too, the unions would call a strike.
 

The_Duke

LE
Moderator
#30
No dramas. They will take it all in house. Contractors will just be paid £35 less per week to cover costs and margin. Hope you feel better now.
 
#31
No dramas. They will take it all in house. Contractors will just be paid £35 less per week to cover costs and margin. Hope you feel better now.
Infinitely better thank you, as I retired about 2 years ago, and do not have to suffer the circus of PAYE, HMRC, DWP, Phoning agency's, Health and safety on site, traveling expenses, trying to park near the site, stolen tools, gobby apprentices, early mornings, late finishes, month Away from home. etc.
 
#32
This has all been very intersting reading so thanks to all that have posted on the thread.
Seems the company who want to contract me, now are offering PAYE with no loss of income.
 
#34
So you’ve no more interest, but want to change it for others who have.

Got it.
It needs changing, its inherently and morally wrong, no working man should have to pay to be paid. The agencys get a one off commission, or an hourly fee from the client hiring the worker. On one job I was on I got a look at the agencys invoice to the people I was working for, it was exactly double my hourly fee. The building and construction industry is riddled with corruption, some more than others, Carillion is a good example.
 
#35
In the distant past, the agency's had payroll staff in house, then they subbed it out to third party shyster pay agency's, somewhere along the line the worker got ripped off. I have contacted my MP on the subject, and she says it is morally wrong, but legal. I contacted the BBC "Rip off Britian" and they said they would not investigate, beacause it involves government agency's.
The whole scam needs to be dismantled, why should a worker on PAYE pay to be paid , if Tesco workers were forced too, the unions would call a strike.
The employee also pays the employers share of the income tax!
 
#36
No dramas. They will take it all in house. Contractors will just be paid £35 less per week to cover costs and margin. Hope you feel better now.
Cetain trades are dictating their own rate , £26 ph for telehandler driving is not unknown , not bad for sitting on your arrse and posting on Arrse most of the day.
 
#37
The employee also pays the employers share of the income tax!

Forgot about that little scam, thank you. My tax was 20% at source, before NI and pay agency fees. Edit To Add:- my hourly rate was £14-15 P/H, now 2 years on, its £17-19. and I still get phone calls, one job offered £24 P/H, fast track, nights.
 
#38
Simply, get professional advice
Above all else, don't expect to get it from HMRC.

Since I left the army, they have gone from winning well-deserved awards for quality of service, to shambolic. Most of that decline in the last 5 years.

Get a good accountant, based on recent references from others in a similar circumstance to yourself.
 
Thread starter Similar threads Forum Replies Date
fltpilot Finance, Property, Law 19
phil245 Blue Jokes 47
Berlin_104s Jobs (Discussion) 13

Similar threads


New Posts

Latest Threads

Top