Viewing 29 posts - 1 through 29 (of 29 total)
  • Which umbrella company for contracting?
  • spacemonkey
    Full Member

    The missus has just accepted a contract role for 6 months – could be extended at some point and/or lead to other roles blah blah.

    The contract is run through a recruitment firm who have been selected by a consultancy that manage various roles for the employer. The recruitment firm have asked her to use an umbrella company through whom they will make weekly payments.

    The question is: which umbrella company?

    Have had WOM recommendations for Orange Genie, but she’s also been looking at Sprite, BishopsGate and Best Pay. The latter have calculated that through them she will receive approx 10% more than the PAYE equivalent. How is that possible?

    What do you contractor peeps do?

    Cheers

    itpit
    Free Member

    I used these guys in the past http://www.contractorumbrella.com/. But it’s no longer worth it as you can’t claim travel expenses via umbrella. Go Ltd. It’s easier than you think.

    IHN
    Full Member

    Yeah, umbrellas are at the forefront of HMRCs crackdown on hidden employment.

    Go Ltd, it’s a doddle.

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    onandon
    Free Member

    I agree with above. I went from umbrella to ltd in Dec 2015. Just go direct to ltd – it’s really easy and worth the investment of time.

    RobHilton
    Free Member

    But it’s no longer worth it as you can’t claim travel expenses via umbrella. Go Ltd. It’s easier than you think.

    You can’t claim travel, accom. or daily food allowance as Ltd any more if you’re inside IR35.

    transporter13
    Free Member

    Do not go via umbrella…much more beneficial being ltd and getting a good accountant

    br
    Free Member

    It does also depend on whether the contract is with the public or private sectors; as from April 2017 the public sector will be banned from paying gross invoice amounts for contractors who are Limited, and will only pay net/PAYE amounts.

    RobHilton
    Free Member

    It does also depend on whether the contract is with the public or private sectors; as from April 2017 the public sector will be banned from paying gross invoice amounts for contractors who are Limited, and will only pay net/PAYE amounts.

    My understanding of this is that it will be the agencies’ responsibility to determine IR35 status and do as you say for those inside IR35.

    I’m not hung up on IR35 or anything… :mrgreen:

    spacemonkey
    Full Member

    Interesting comments there chaps.

    Going Ltd seemed a lot more faff, especially as she is (self-confessed) less than good at that kind of admin.

    Need to look more into the IR35 side of things – no idea yet how that might apply.

    She’s been told she can claim for mileage and food (even though place of work will be the same location (other than occasionally WFH)).

    br
    Free Member

    My understanding of this is that it will be the agencies’ responsibility to determine IR35 status and do as you say for those inside IR35.

    True, but as its not yet decided what will actually occur (and nor what constitutes a PSC, even though the Govt refer to PSC’s…) my fivepennyworth is that ALL contractors working for the public sector will be paid PAYE by the agencies, as it’s a lower risk to them (the agencies).

    Only exceptions will be those employed directly by the public sector, and they’ll be also paid as PAYE (net).

    Obviously what’ll then occur is a vast increase in rates (by those who can raise them) for folk who the public sector can’t do without or a move across to the professional services companies who’ll just stiff the public sector at a greater level…

    ebygomm
    Free Member

    I use contractorumbrella.

    Change of rules last April mean food and travel can no longer be offset against tax.

    z1ppy
    Full Member

    1st thing, ask the agency if they have a list of umbrella companies they will work with.. been my experience not all agency will allow ‘any’ umbrella agency (whether they were getting back handers is another story).

    john_drummer
    Free Member

    I used Paystream as my umbrella company until I went Limited; I still use them as my accountants – I tell them how much my company has been paid each month and they tell me how much I can pay myself as salary, expenses & dividends, and every quarter they tell me how much VAT to pay.
    They also do an IR35 review and, for a fee, my tax return

    br
    Free Member

    I used Paystream as my umbrella company until I went Limited; I still use them as my accountants – I tell them how much my company has been paid each month and they tell me how much I can pay myself as salary, expenses & dividends, and every quarter they tell me how much VAT to pay.
    They also do an IR35 review and, for a fee, my tax return

    I wouldn’t recommend this.

    One of the ‘rules’ in deciding whether someone is actually a business or just a ‘tax-front’ is do they ask a 3rd party how much they can pay themselves etc.

    john_drummer
    Free Member

    I wasn’t aware of that. What else would you use an accountancy firm for?

    br
    Free Member

    What else would you use an accountancy firm for?

    No, it’s about ‘less’ not ‘more.

    I only use ours for general/accounting advice, sending the actual VAT/RTI data to HMRC and the annual accounts. Plus confirming our FRS VAT values.

    It’s fine to take advice on salary, but retain the correspondence that shows it’s you making the decision. Expenses should be claimed as per the law/company handbook and Dividends is down to profit/risk.

    cr500dom
    Free Member

    I used to use an umbrella, but went Ltd and never looked back.
    I have a very good accountant as I am Better at designing stuff than I am at tax returns etc.
    He deals with a lot of other people in the same boat as me.
    I draw what I need to, he sorts out the Rest and tells me what tax I need to pay and when.
    Also does my VAT returns etc
    Well worth the money so that I don’t have to do it.
    Effectively, 2 days work pays my accountancy fees for the year, that to me is a no brainer.

    antares
    Free Member

    I work for a recruitment agency supplying class 1 drivers and we won’t use anyone who uses an umbrella scheme. The drivers are either PAYE or Ltd in their own right.

    cheers_drive
    Full Member

    Under umbrella you also have to pay employers NI so lose out on that as well as expenses. Don’t believe anything they say on keeping more than PAYE, she will still be PAYE just through them and with no sick or holiday pay and no pension.

    Just don’t use Brookson whatever she does.

    jambalaya
    Free Member

    Use a limited company. Not sure if you can still do this but it used to be possible to make yourself redundant at end and get £30k tax free.

    mahalo
    Full Member

    Brookson are brilliant at running all my ltd company affairs. Not cheap but worth it for the peace of mind.

    Also if you join them let me recommend you and I’ll get a free iPad…

    br
    Free Member

    Not sure if you can still do this but it used to be possible to make yourself redundant at end and get £30k tax free.

    Depends.

    HMRC do allow (certain amounts) if you are closing your business and going PAYE plus not opening a new Limited (for a time period).

    But each case different AFAIK

    allthepies
    Free Member

    Going ltd is a piece of piss. I’ve recently started contracting (6 weeks ago) and have gone down the ltd route.

    Found myself an accountant who had a free company setup service and the co was up and running in a couple of days.

    You’ll lose £££ by going umbrella.

    cheers_drive
    Full Member

    What peace of mind is that? They made loads of errors, took ages to get back to me and when they did is was some call centre person who had to defer to someone else as soon as I asked something more complicated than their name. I left after one year, my new accountant is 1/3rd less in costs, replies promptly, and uses Freeagent which is far better than Brookson Connect. To top it all I now have HMRC on my case as Brookson messed up my self assessment.
    Not worth the free gift you get, you’d be better of financially if you gave mahola an ipad yourself.

    allthepies
    Free Member

    ^^^ Freeagent is great. That was a “must have” when I selected an accountant.

    fanatic278
    Free Member

    As with all the above replies, my advice is to go ltd. My accountant costs me £100 per month and has sorted everything out for me, including me and my wife’s self assessment tax returns. It’s money well spent. All I have to do is upload my bank statement each month and categorise my transactions (expenses, mileage, accommodation, etc).

    I also agree with the above recommendation to find one that has a subscription to Freeagent software. They have a easy way of searching for local accountants on their website.

    spacemonkey
    Full Member

    On the basis of your feedback I’ve convinced ‘er indoors to look seriously at Ltd and chat to a finance bod (at previous employer) re him looking after her accounts – as he does this type of accounting on the side anyway.

    I’ll also call HMRC tomo and see if IR35 is an issue for her.

    Cheers all

    allthepies
    Free Member

    Not sure I’d approach HMRC re: IR35 🙂

    I used QDOS to review my contract and negotiate some amendments to make it IR35 friendly.

    QDOS provide a free contract assessment if you buy the (mandatory) liability insurance through them.

    Email me if you want the name of a good freeagent accountant.

    twicewithchips
    Free Member

    I can’t recommend an umbrella I’m afraid.

    I do a mixture of interim “contracting” work and consultancy – the difference between two being that interim is generally 5 days a week at a daily rate, whereas consultancy results in a bill for ‘advice’ rather than time. HMRC view these differently (one might be IR35, the other isn’t)

    I run both through my own Ltd – which cost (I think) £35 to set up at companies house. As the director, I decide what gets paid to whom, what my expenses policy is, etc. I doubt this is possible under an umbrella – as others have mentioned the IR35 tests partly relate to who is making the decisions!

    For an easy life for a six month role, I might be tempted to go for an umbrella, but if there is even an inkling of doing this sort of thing longer term I would strongly recommend the Ltd route. You might not be able to charge the client food and mileage, but you (the individual) can bill it to the Ltd Co (it’s a separate legal entity), subject to HMRC’s rules on benefit vs recompense for expenses.

    When contracting, I just had the agency issue the weekly payments to my Ltd (instead of an umbrella) – I can’t see that this would present them a problem in Mrs SpaceMonkey’s case, unless the agency are making it difficult? My experience of it was that they insisted on self-invoicing, which is pretty simple once you’ve got it set up.

    Long story short, get a recommendation for an accountant, and decide after you’ve spoken to them. I’ll recommend you mine, they’re ace, no ipads though, sorry.

    Happy to reflect further on my experience if you want – this is not advice 😉

    T

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