short contract - confused about umbrellas

[Branners]

Hi,

I have been through the search which gave me loads of info I didnt know, but it also put some concerns in my mind.

I have taken a contract which should be 6 months. I am considering using Parasol or Giant as an umbrella but there seem to be a few threads on here saying managed service companies like that are about to be hit by a new tax.

Can somebody clarify if Im stepping in to the frying pan by going umbrella? I do not want to go LTD as I have done that twice before and the paperwork and IR annoys the hell out of me, I want an easy life and Im willing to accept less tax breaks by going umbrella.

So will I be okay going umbrella?

thanks
JB


Admin Note: Further reading here on Managed Service Company legislation.

[basshead]

Parasol are placing themselves outside the new rules and (at the moment) seem confident they are not caught - I have used them in the past and had no problems at all with their service so if you're going umbrella rather than LTD, go Parasol rather than any of the potentially caught schemes offered by Giant.

[Waldorf]

MSC's such as Giant, brooksons etc are to cease from April, Umbrellas such as parasol seem to be able to carry on although there seems to be confusion whether you will be able to claim expenses in the future.

Brollies are fine if you know you will only be contracting for a few months, but any longer it is best to have your own ltd co.

I was with Giant and have not regretted moving back to Ltd.

[malvolio]

PCG just put out a press release saying in effect that proper Umbrellas such as Parasol are unaffected by the rules on MSCs. So that route is still open and perfectly OK to use.

MSCs and their variants (someone was launching a kind of mini-MSC, for example) are probably best avoided. They are legal but there is absolutely no commercial or administrative benefit in using them.

[Bluebird]

MSC's such as Giant, brooksons etc are to cease from April,

I didn't think that they would cease - just that if you used them you'd end up paying full PAYE

[Branners]

thanks for the info.

is there a simple answer as to why Giant are getting caught by the new rules and Parasol are not?

I have heard good things about Parasol, but Giant seem to get a mixed response.

JB

[malvolio]

thanks for the info.

is there a simple answer as to why Giant are getting caught by the new rules and Parasol are not?

I have heard good things about Parasol, but Giant seem to get a mixed response.

JB

Ermm - Giant is an MSC and Parasol is an umbrella perhaps?? Please don't tell us you don't know the difference...

[Xtrain]

PCG just put out a press release saying in effect that proper Umbrellas such as Parasol are unaffected by the rules on MSCs. So that route is still open and perfectly OK to use.

...and since when was the PCG the authorative source on who was or wasn't affected by the rules that are actaully NOT confirmed until tomorrows budget!!!

Maybe this knowledge was gained when they went into business with one of these "proper" umbrellas

[malvolio]

...and since when was the PCG the authorative source on who was or wasn't affected by the rules that are actaully NOT confirmed until tomorrows budget!!!

Maybe this knowledge was gained when they went into business with one of these "proper" umbrellas

Wrong way round. PCG decided that if there had to be umbrellas, there may as well be at least one that is totally in line with all the rules and does not in any way mislead its clients. Parasol were the choice to manage it on their behalf; although it's worth noting that they had to make very few changes to their existing model to meet the PCG requirement.

As for them being authoratative, they have closer links to the Treasury than most and some very good advisors. And on that subject, over 90% of the taxation changes at budget time are not stated in the speech, they're hidden in the thousands of pages of "explanatory" bumph from the PBR and the Budget speech itself. Most of the 'new' stuff is already known, the speech is only concerned with the price of fags and other important highlights.

[jh0711]

Ermm - Giant is an MSC and Parasol is an umbrella perhaps?? Please don't tell us you don't know the difference...

Giant has a PAYE umbrella model and an MSC model (well for the next few hours anyway )

Parasol only operate a PAYE umbrella model

So you could use Giants Umbrella model - if they ensure it uses the correct model it will be legal.

Parasol's model is fine along with the PCG (QU) offering - I would also imagine there are other umbrellas who understand the rules and have got their contract paperwork and payroll model in order.

probably