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username1
9th December 2012, 17:17
Hello!
Unfortunately I found this forum after I joined Parasol and started my assignment.
I took a read of my expenses sheet and I'm quite concerned about what they want me to sign.

I understand the above assets will remain the property of Parasol on approval of the related claim.
I further agree to pay a security deposit equivalent to 10% of the purchase price.
I understand that I am able to purchase the above assets from Parasol after a qualifying period.

After a few complications from their side I'd rather ask for advice before I sign anything.
Btw, is this a common practice among umbrella companies?
Can someone please advise?

Regards
u1

jamesbrown
9th December 2012, 20:24
Legally speaking, you will be an employee of the umbrella and they will own the equipment purchased on your behalf. I believe the typical scenario, in practice, is that you pay a small fee as a security deposit and can then purchase back the equipment for a depreciated value (equal to the security deposit) upon leaving the umbrella if you so wish.

It sounds like you may need to do a little more reading about this structure in order to avoid being surprised by other aspects (such as the "employer costs" you will be charged as part of the umbrella fee).

northernladuk
9th December 2012, 21:21
Maybe scanning the Umbrella forum will uncover some of these surprises....

captainham
9th December 2012, 21:25
Useful guide to searching forum via Google is here:

http://forums.contractoruk.com/welcome-faqs/58311-searching-cuk-forums.html

Wary
11th December 2012, 06:52
Here's a couple of Parasol threads to be getting on with ... and there are more:

http://forums.contractoruk.com/umbrella-companies/80338-parasol-employment-costs.html
http://forums.contractoruk.com/umbrella-companies/80515-parasol-questionable-benefit-working-through-umbrella.html

Optionis Mike
11th December 2012, 08:45
Hello u1.

I work at Parasol head office, and would like to reassure you that the arrangement you have described above is an effective and legitimate way for us to ensure you have the right tools (eg electronic equipment) at your disposal to work on your assignment as a Parasol employee.

As we’ve some 8,000 employees across the UK, it’s somewhat impractical for us to spec out, buy and then ship out any number of electronic devices on a daily basis.

The most sensible option for all concerned, therefore, is for employees to spec out an item, pay for it out of their own pocket and have the cost reimbursed through Parasol. The item remains the property of Parasol for the duration of your employment, so a security deposit is retained out of net pay. This can be refunded to you at the point you leave Parasol, should you wish to return the item to us in a usable condition.

Should you wish to retain the item, the security deposit will cover the residual value.

Please call our employee support team on 0844 875 0079 if you would like to discuss this matter in more detail, or require further clarification.

Thanks.

simondolan
11th December 2012, 11:20
So what you are saying is that the "employee" has to buy their computer equip out of their own earnings, then give Parasol a deposit as well. When they leave Parasol they have to either give the equip back, or buy it back from you!!

:eyes



Hello u1.

I work at Parasol head office, and would like to reassure you that the arrangement you have described above is an effective and legitimate way for us to ensure you have the right tools (eg electronic equipment) at your disposal to work on your assignment as a Parasol employee.

As we’ve some 8,000 employees across the UK, it’s somewhat impractical for us to spec out, buy and then ship out any number of electronic devices on a daily basis.

The most sensible option for all concerned, therefore, is for employees to spec out an item, pay for it out of their own pocket and have the cost reimbursed through Parasol. The item remains the property of Parasol for the duration of your employment, so a security deposit is retained out of net pay. This can be refunded to you at the point you leave Parasol, should you wish to return the item to us in a usable condition.

Should you wish to retain the item, the security deposit will cover the residual value.

Please call our employee support team on 0844 875 0079 if you would like to discuss this matter in more detail, or require further clarification.

Thanks.

pmeswani
11th December 2012, 11:26
So what you are saying is that the "employee" has to buy their computer equip out of their own earnings, then give Parasol a deposit as well. When they leave Parasol they have to either give the equip back, or buy it back from you!!

:eyes

I am guessing the contractor expenses the computer, and rather the whole amount being reimbursed, 90% is reimbursed, and the remaining 10% is returned when the computer is returned... but I do see your point. The computer should be the contractors, unless the umbrella co is going to buy it from the contractor.

LisaContractorUmbrella
11th December 2012, 12:16
I am sure I must be reading this wrong - it sounds as though the the contractor buys the equipment and is reimbursed 90% of the value but loses the other 10% unless they give whatever it is to the umbrella company to keep :confused:

Optionis Mike
17th December 2012, 09:57
As a founding member of the FCSA, and having been audited by both Ernst & Young and HMRC, we are keen to ensure that we follow legislation to the letter and enable our employees to claim for all their incurred legitimate business expenses through the most compliant means possible.

We are pleased to be able to offer our employees the facility of claiming legitimate electronic equipment purchases as business expenses – particularly as some other umbrellas don’t offer this facility.

moggy
17th December 2012, 10:11
As a founding member of the FCSA, and having been audited by both Ernst & Young and HMRC, we are keen to ensure that we follow legislation to the letter and enable our employees to claim for all their incurred legitimate business expenses through the most compliant means possible.

We are pleased to be able to offer our employees the facility of claiming legitimate electronic equipment purchases as business expenses – particularly as some other umbrellas don’t offer this facility.

I am not surprised you allow them to claim these things - if you get to keep them..

LisaContractorUmbrella
17th December 2012, 10:26
Hello u1.

I work at Parasol head office, and would like to reassure you that the arrangement you have described above is an effective and legitimate way for us to ensure you have the right tools (eg electronic equipment) at your disposal to work on your assignment as a Parasol employee.

As we’ve some 8,000 employees across the UK, it’s somewhat impractical for us to spec out, buy and then ship out any number of electronic devices on a daily basis.

The most sensible option for all concerned, therefore, is for employees to spec out an item, pay for it out of their own pocket and have the cost reimbursed through Parasol. The item remains the property of Parasol for the duration of your employment, so a security deposit is retained out of net pay. This can be refunded to you at the point you leave Parasol, should you wish to return the item to us in a usable condition.

Should you wish to retain the item, the security deposit will cover the residual value.

Please call our employee support team on 0844 875 0079 if you would like to discuss this matter in more detail, or require further clarification.

Thanks.

Can you please explain Mike how the cost is 'reimbursed' to the employee - at a conservative estimate if 10% of your employees are expending an average of £750 per annum on equipment you would have had to reimburse over £500,000 - where would this money come from - surely this is not a cost of business?

LisaContractorUmbrella
19th December 2012, 10:21
Can you please explain Mike how the cost is 'reimbursed' to the employee - at a conservative estimate if 10% of your employees are expending an average of £750 per annum on equipment you would have had to reimburse over £500,000 - where would this money come from - surely this is not a cost of business?

Hello :poke:

LisaContractorUmbrella
7th January 2013, 07:55
Anyone :tumble:

Wary
19th January 2013, 19:59
Can you please explain Mike how the cost is 'reimbursed' to the employee - at a conservative estimate if 10% of your employees are expending an average of £750 per annum on equipment you would have had to reimburse over £500,000 - where would this money come from - surely this is not a cost of business?

It's amazing how the Parasol reps always go quiet on these forums when the questions get too awkward ...

original PM
23rd January 2013, 09:31
It's amazing how the Parasol reps always go quiet on these forums when the questions get too awkward ...

indeed looks like Mr Crossland has locked his pets back in the cage....

:wink

LisaContractorUmbrella
24th January 2013, 07:48
indeed looks like Mr Crossland has locked his pets back in the cage....

:wink

What an original euphemism

Apox21
25th January 2013, 08:58
It looks to me that Parasols policy on equipment isn't much different to other umbrella companies policy on equipment apart from the 10% deposit:

Parasol

"The costs of hardware, software and personal protection equipment essential to your role can be claimed. There’s no limit to the amount that can be claimed, although you must complete the sundry letter provided detailing how each purchase supports your role, along with the original receipt. Claiming the full cost of any purchase requires a security deposit* equivalent to 10% of the purchase price to be paid. The equipment will become the property of Parasol, with the option to purchase it after a qualifying period at a second-hand value assumed to be equal to 10% of the purchase price.* The 10% deposit will deducted from your net pay following your authorisation."


ContractorUmbrella

"Claims for equipment must be supported by evidence that they are specifically required for your current contract and that the equipment is wholly necessary for you to perform the assignment. Any general pieces of equipment for your role as a contractor or ‘nice to haves’ are not permitted by HMR&C."

Waldorf
25th January 2013, 09:55
It looks to me that Parasols policy on equipment isn't much different to other umbrella companies policy on equipment apart from the 10% deposit:

Parasol

"The costs of hardware, software and personal protection equipment essential to your role can be claimed. There’s no limit to the amount that can be claimed, although you must complete the sundry letter provided detailing how each purchase supports your role, along with the original receipt. Claiming the full cost of any purchase requires a security deposit* equivalent to 10% of the purchase price to be paid. The equipment will become the property of Parasol, with the option to purchase it after a qualifying period at a second-hand value assumed to be equal to 10% of the purchase price.* The 10% deposit will deducted from your net pay following your authorisation."


ContractorUmbrella

"Claims for equipment must be supported by evidence that they are specifically required for your current contract and that the equipment is wholly necessary for you to perform the assignment. Any general pieces of equipment for your role as a contractor or ‘nice to haves’ are not permitted by HMR&C."

I would imagine the Contractor Umbrella deduct the full cost of any equipment from your earnings, otherwise the brolly would be funding loads of ipads etc.

I think Lisa was trying to ask Parasol how they funded such purchases of equipment etc, as apart from taking 10% from the contractor, there is no apparent way that such purchases are funded.

It is a mystery and even more so that Parasol have gone quiet on here. Perhaps they should remember, "if you can't stand the heat, stay out of the kitchen."

northernladuk
25th January 2013, 10:12
It looks to me that Parasols policy on equipment isn't much different to other umbrella companies policy on equipment apart from the 10% deposit:

Parasol

"The costs of hardware, software and personal protection equipment essential to your role can be claimed. There’s no limit to the amount that can be claimed, although you must complete the sundry letter provided detailing how each purchase supports your role, along with the original receipt. Claiming the full cost of any purchase requires a security deposit* equivalent to 10% of the purchase price to be paid. The equipment will become the property of Parasol, with the option to purchase it after a qualifying period at a second-hand value assumed to be equal to 10% of the purchase price.* The 10% deposit will deducted from your net pay following your authorisation."


ContractorUmbrella

"Claims for equipment must be supported by evidence that they are specifically required for your current contract and that the equipment is wholly necessary for you to perform the assignment. Any general pieces of equipment for your role as a contractor or ‘nice to haves’ are not permitted by HMR&C."

I think we are aware of that. The HMRC policy on wholly and exclusively is well documented. The key argument is the 10%.

Apox21
25th January 2013, 11:32
I think we are aware of that. The HMRC policy on wholly and exclusively is well documented. The key argument is the 10%.

I seem to remember from my days a permie that there were similar rules with regard to cycle to work schemes etc. i.e. the company owned the bike then after a set period you could either hand the bike back or pay the market rate for the bike (which was about 5 or 10%). so would assume they're operating under similar tax rules (I may be wrong)

northernladuk
25th January 2013, 11:34
I seem to remember from my days a permie that there were similar rules with regard to cycle to work schemes etc. i.e. the company owned the bike then after a set period you could either hand the bike back or pay the market rate for the bike (which was about 5 or 10%). so would assume they're operating under similar tax rules (I may be wrong)

Thanks but assuming things and comparing to different schemes isn't really helping anyone.

LisaContractorUmbrella
25th January 2013, 13:16
I seem to remember from my days a permie that there were similar rules with regard to cycle to work schemes etc. i.e. the company owned the bike then after a set period you could either hand the bike back or pay the market rate for the bike (which was about 5 or 10%). so would assume they're operating under similar tax rules (I may be wrong)

But the difference is that I think the company paid for the bike

Apox21
25th January 2013, 13:58
But the difference is that I think the company paid for the bike

Fair point. How do ContractorUmbrella deal with this? If I was working through you and I needed a laptop that was essential for my role, not for personal use etc. as per your website I could claim the cost back. How would you get the money to pay me the expenses?

moggy
25th January 2013, 14:35
Fair point. How do ContractorUmbrella deal with this? If I was working through you and I needed a laptop that was essential for my role, not for personal use etc. as per your website I could claim the cost back. How would you get the money to pay me the expenses?

they would use the funds they bill you out for.

LisaContractorUmbrella
11th February 2013, 08:05
Just thought I'd pop back to this thread to see if any explanations had miraculously appeared - sadly not :tumble:

bobof
12th February 2013, 19:43
But the difference is that I think the company paid for the bike

Surely it is the same deal? The umbrella company have effectively bought the laptop by re-imbursing your cost. You don't have income from the contract; the Umbrella do and they choose to pay you a salary which is reminiscent of the post-employer's NI, but doesn't have to be (I'm sure somewhere in your employment contract there will be mention of some bonus you are paid in addition to a basic salary and the calculation of that bonus will involve the subtraction of expenses due).

It seems to me a lot of these questions stem from people not grasping that the contract isn't theirs when they go via an Umbrella, it is between the Umbrella and the end client.

Having said that, the umbrella I use for my contract don't operate this kind of policy (it seems this is being offered as a perk so you can buy a laptop effectively bypassing NI and tax) and I imagine it starts to blur the line a bit too much?

LisaContractorUmbrella
14th February 2013, 07:53
Surely it is the same deal? The umbrella company have effectively bought the laptop by re-imbursing your cost. You don't have income from the contract; the Umbrella do and they choose to pay you a salary which is reminiscent of the post-employer's NI, but doesn't have to be (I'm sure somewhere in your employment contract there will be mention of some bonus you are paid in addition to a basic salary and the calculation of that bonus will involve the subtraction of expenses due).

It seems to me a lot of these questions stem from people not grasping that the contract isn't theirs when they go via an Umbrella, it is between the Umbrella and the end client.

Having said that, the umbrella I use for my contract don't operate this kind of policy (it seems this is being offered as a perk so you can buy a laptop effectively bypassing NI and tax) and I imagine it starts to blur the line a bit too much?

I think I understand the way that an umbrella contract works :wink However, in this case there is no reimbursement of cost in reality and the purchase is not made by the umbrella company so they have no legal entitlement to the property and certainly no entitlement to 10% of the purchase price which would seem to be the case in this instance

Zippy
20th February 2013, 19:40
I assume 'purchase price' includes VAT? So would Parasol be able to claim any of this back? Would this purchase increase the 'employment costs' (which I believe are applied before the deduction of legitimate business expenses)?
I'm not holding my breath for a reply here ..

LisaContractorUmbrella
21st February 2013, 13:13
I assume 'purchase price' includes VAT? So would Parasol be able to claim any of this back? Would this purchase increase the 'employment costs' (which I believe are applied before the deduction of legitimate business expenses)?
I'm not holding my breath for a reply here ..

Good question Zippy - do you want me to wait with you :popcorn::popcorn:

Zippy
21st February 2013, 18:42
Good question Zippy - do you want me to wait with you :popcorn::popcorn:

Nah - thanks though. I'm sure you have plans for the rest of your life :D

LisaContractorUmbrella
27th February 2013, 08:15
I think you were right not to hold your breath Zippy :tumble:

original PM
27th February 2013, 10:22
maybe they are just hibernating and will re-appear in spring?

:wink

LisaContractorUmbrella
27th February 2013, 11:36
maybe they are just hibernating and will re-appear in spring?

:wink

Aaahhhh like likkle hedgehogs :p