Umbrella company recommendations?

I’ve managed to hold out this long including a spell as a permie (shudder) – but now I need to find an umbrella company for me to peddle my wares via.

Any recommendations / pointers / things to look for, or avoid?

Ta.

HMRC have tightened down on this dodge you know !  Set your own business up and do it properly ?

(off topic but, fossy, I’ve been trading through my own company for 30 years, very happily and successfully, without any tax dodging at all thank you. Latest IR-35 implementation makes that all-but impossible to continue with, and I don’t really understand your post tbh.)

I used Parasol some years ago and they were reliable.

Well why use an umbrella company as you are using your own business ?  Don’t see the point, especially with IR35, unless you want to cut out the business admin. IR35 removed alot of the ‘tax advantages’ of Umbrella companies.

DK – who’s insisting on the Umbrella company approach?  Are you definitely inside IR-35 without it?  If you are going that way make sure you understand the Agency worker opt outs and whats in it for you to do that – some Umbrella’s seem to strongly suggest you want to sign it, but there seems to be little benefit for you and importantly if the contracting company doesn’t pay the umbrella, if you opt out they don’t have to pay you.

Latest IR-35 implementation makes that all-but impossible to continue with

It is still possible if you are billing on deliverables and carrying the responsibility for errors, rework etc, rather than just being ad hoc labour.   Many a company will happily pay more for you if you are willing to bill on that basis.

I used Focused Group for 14 months until July this year and they were excellent. Having operated as a limited company for many years I was a bit nervous of working via an umbrella company but was pleasantly surprised by the level of service. They also managed payments into my SIPP

Timely, I was talking with a mate about going contracting just last night.

I don’t really understand your post tbh.

Same. I’ve contracted once before, I got a permanent role offered just before IR35 came in. I used an umbrella company to take care of financial admin, I’d probably do it again not as a tax dodge (that never even crossed my mind) but because I haven’t got a clue what I’m doing with that sort of stuff.

Well why use an umbrella company as you are using your own business ?

Fossy, Under the new ir35 rules brought in around 2020/2021 (for the private sector/earlier for pub sector) , it is the client that decides whether a particular ‘job’ is inside ir35 or outside ir35. If they decide it’s inside then you have no choice but to do it via an umbrella company, which is very inefficient from a tax perspective, but you have no choice.  if it’s outside ir35 then you can do it the old way via a Ltd Co which is more tax efficient, but admin heavy, or via an umbrella, which is less tax efficient, but admin light. It’s the contractors choice if the job is outside ir35.

There’s no tax dodging going on using an umbrella, quite the opposite really.

Presume Dorset knob now has an inside ir35 gig hence the request for an umbrella company. I’ve used a few, they’re mostly fine, just make sure you get one that will treat pension contribs as salary sacrifice, otherwise you’ll be paying more employers ni than you need to.

It’s surprising how many umbrellas don’t treat pension contribs as salary sacrifice.

julians – thanks, I wasn’t aware of that issue around pensions, I’ll defo look into that.

And thanks for the specific recommendation, fs1e, I’ll look into that outfit.

(and yes, this role has been classified as inside by client, which is why I have to use an umbrella)

If they decide it’s inside then you have no choice but to do it via an umbrella company

This isn’t entirely true – you can still do “inside” jobs through a Ltd but the benefits / tax efficiencies (expenses, dividends etc.) are much less as you have to pay full PAYE/NI on that contract as if it was an employed role salary. It can also get complicated if you have a mix of in / out contracts through the same Ltd as you effectively need to keep the payrolls separate.

Yes, sometimes the client requests use of an Umbrella but it’s not an absolute requirement (mainly to cover their own backs, as above).

This isn’t entirely true – you can still do “inside” jobs through a Ltd

Technically true, but in practice I haven’t seen an inside ir35 job that would let you do it through your own Ltd, they all insist on using an approved umbrella.

I guess there must be some out there that wouldn’t mid you doing it through your own ltd though.

Just amazed we’ve got this far without a resident evil joke tbh