started new job, first time with umbrella, noob questions

[mart321]

hi all, after 8 years working under the PAYE scheme ive recently started a new role with an agency who advised going down the umbrella route and recommended a particular company. i signed up online and signed all the forms including copies of passport ,proof of address. probably common knowledge to most of you, but i am now being paidd in two stages, initially all my hours worked are paid at minimum wage and the rest is then paid as a "loan". works out i am taking home 85% of my total gross per week, and paying on average £15 tax and £15 NI per week.
i have done a little research and although the agency is telling me thats its all above board and legal, im a little worried that its too good to be true and i keep on hearing horror stories of HMRC changing the law and coming after people years later. what is peoples opinion of this?

on another note, if for example i had to pay back any liable tax, does that mean i would also be entitled to pay back the cut that the agency are currently taking from me, i.e im taking home 85%, paying 5%tax, and the agency are keeping 10% for themselves. thanks in advance

[cojak]

hi all, after 8 years working under the PAYE scheme ive recently started a new role with an agency who advised going down the umbrella route and recommended a particular company. i signed up online and signed all the forms including copies of passport ,proof of address. probably common knowledge to most of you, but i am now being paidd in two stages, initially all my hours worked are paid at minimum wage and the rest is then paid as a "loan". works out i am taking home 85% of my total gross per week, and paying on average £15 tax and £15 NI per week.
i have done a little research and although the agency is telling me thats its all above board and legal, im a little worried that its too good to be true and i keep on hearing horror stories of HMRC changing the law and coming after people years later. what is peoples opinion of this?

on another note, if for example i had to pay back any liable tax, does that mean i would also be entitled to pay back the cut that the agency are currently taking from me, i.e im taking home 85%, paying 5%tax, and the agency are keeping 10% for themselves. thanks in advance

It's well dodgy and you will be caught by HMRC. In fact tell us the name of your 'agent/umbrella' and I'll put you straight into the appropriate enquiries thread. HMRC Scheme Enquiries

And you're entitled to nothing.

[CDJ]

hi all, after 8 years working under the PAYE scheme ive recently started a new role with an agency who advised going down the umbrella route and recommended a particular company. i signed up online and signed all the forms including copies of passport ,proof of address. probably common knowledge to most of you, but i am now being paidd in two stages, initially all my hours worked are paid at minimum wage and the rest is then paid as a "loan". works out i am taking home 85% of my total gross per week, and paying on average £15 tax and £15 NI per week.
i have done a little research and although the agency is telling me thats its all above board and legal, im a little worried that its too good to be true and i keep on hearing horror stories of HMRC changing the law and coming after people years later. what is peoples opinion of this?

on another note, if for example i had to pay back any liable tax, does that mean i would also be entitled to pay back the cut that the agency are currently taking from me, i.e im taking home 85%, paying 5%tax, and the agency are keeping 10% for themselves. thanks in advance

Mart321 - Take it from someone who has been stung by the EBT fiasco and has essentially seen the large part of his life savings go to HMRC.. Get Out .. Get out now.. set up a Ltd Company or use a PAYE Umbrella. Do not listen to anything they tell you.. they are nothing more than silver-tongued snake oil salesmen..

[mart321]

It's well dodgy and you will be caught by HMRC. In fact tell us the name of your 'agent/umbrella' and I'll put you straight into the appropriate enquiries thread. HMRC Scheme Enquiries

And you're entitled to nothing.

The umbrella is bedouins aka redstone services

[mart321]

Mart321 - Take it from someone who has been stung by the EBT fiasco and has essentially seen the large part of his life savings go to HMRC.. Get Out .. Get out now.. set up a Ltd Company or use a PAYE Umbrella. Do not listen to anything they tell you.. they are nothing more than silver-tongued snake oil salesmen..

Thanks for the info, what are th benefits of paye umbrella as apposed to just paye, I am interested in going limited company, how would insert this up, my g/f is self employed, all she does is file a tax return once a year, is it as simple as getting paid you lot all year then, filing a return writing as much off as possible?

[LisaContractorUmbrella]

If an agency is recommending a non compliant umbrella company they could end up in all sorts of trouble but no-where near as much trouble as you are likely to end up in when HMRC track you down - check out the Disguised Remuneration Legislation then check out the Onshore Intermediaries Legislation and then go back to the agency and ask them to explain, in detail, how this provider can possibly be legit.

Walk away and find a proper PAYE umbrella or open up your own Ltd Co but don't carry on down this road.

[Andy Hallett]

Wow, I'll let others highlight just how bad it could be for you. As Lisa says, an agency punting a scheme (as opposed to just accepting to trade with it) is about as serious as it gets.

Your best bet is to pick a compliant umbrella (there are many) or start your own company.

[CDJ]

Thanks for the info, what are th benefits of paye umbrella as apposed to just paye, I am interested in going limited company, how would insert this up, my g/f is self employed, all she does is file a tax return once a year, is it as simple as getting paid you lot all year then, filing a return writing as much off as possible?

Mart321 - a PAYE Umbrella is basically the same as being a permanent employee.. you work, you invoice, you get paid net of all taxes.. its simple, very little hassle for yourself and squeeky clean (provided you are fully aware of the rules around expense claiming, which any decent brolly worth their salt will advise you correctly on).

Ltd Co is slightly more involved, but if you are planning on contracting for a long period of time (ie multiple years), then it is by far the best way to go. There is a lot of legislation to get up to speed.. but check out the first timers section here.. also got to the IPSE website or check out any of the big contractor accountants - eg SJD Nixon Williams et al - loads of info available there.. Ltd Co is a bit of a ball ache to get going.. but its just paper work.. once you re up and running, its just a question of keeping on top of your accounts which is about an hour or so a week..

Don't sit on your hands.. get informed, decide which best suits your needs and go with it.. But anything that returns your invoice as some sort of "loan" is on very dodgy ground.. HMRC will go after you and you have to prepared for what that might mean to you personally.

[cojak]

The umbrella is bedouins aka redstone services

and ex-Edge.

http://forums.contractoruk.com/hmrc-...ml#post1878120

I'd start reading - there are hundreds of posts in that thread.

[LisaContractorUmbrella]

The umbrella is bedouins aka redstone services

And who's the agency???