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IrnBru
23rd July 2013, 10:59
Hi,

I am currently on a contract which ends 31st July. I have managed to get myself another contract starting 1st August.

Now the issue is that on my current contract I am with an umbrella company (say xyz) and my paymebts are 30 days in arrears so I will be receiving the payments for July throughout August.

Now with my new contract the agency has asked me to go with one of their recommended umbrella companies, which means I will need to sign up to one! :tantrum:

Has anyone been with 2 umbrella companies at the same time before?If I am to apply for a p45 from my first umbrella company will I still receive payments or will I need to wait until end of august?

Thanks.

northernladuk
23rd July 2013, 11:35
I have a really out there, blue sky helicopter idea. It's new, never been thought of before and might be a bit complex but....

Have you thought about speaking to you umbrella to see how they will deal with this first?

IrnBru
23rd July 2013, 11:51
Yes I have spoken to them on a online chat, not giving any major details away with them but just for the general question.

The guy said that there wouldn't be any charge for leaving and that if I applied for a p45 early then I wouldn't get any remaining payments! So they said I'm best to get p45 end of august and stick out with the 2 umbrella companies for the first month.

Just wanted to see if there were any other views on this?

Craig at Nixon Williams
23rd July 2013, 12:08
It will just be the same as having two employments at the same time, there will be nothing to stop you from doing this however you might not be on the correct tax code whilst you are receiving payments from two sources. Once you have moved all of your income to the second umbrella you will need to speak to HMRC to ensure that the correct tax code is being used.

Hope this helps!
Craig

IrnBru
23rd July 2013, 12:28
It will just be the same as having two employments at the same time, there will be nothing to stop you from doing this however you might not be on the correct tax code whilst you are receiving payments from two sources. Once you have moved all of your income to the second umbrella you will need to speak to HMRC to ensure that the correct tax code is being used.

Hope this helps!
Craig

Thanks. That's pretty much the idea I had in my head what I thought it would be like. I take it this would mean that with the new contract I will be getting heavier tax deductions? Even though I haven't really been in 2 jobs at the same time? Dull one.

IrnBru
23rd July 2013, 12:31
I have a really out there, blue sky helicopter idea. It's new, never been thought of before and might be a bit complex but....

Have you thought about speaking to you umbrella to see how they will deal with this first?

I have spoken to the umbrella company I am with just now through an online chat. I never gave any details or company names just asked them a general question. They said that I would not be charged for leaving but if I take out the p45 early then I cannot get paid what I will be due for the remainder of the month! My best option will be to be with the 2 umbrella companies I guess...?

Craig at Nixon Williams
23rd July 2013, 12:43
Thanks. That's pretty much the idea I had in my head what I thought it would be like. I take it this would mean that with the new contract I will be getting heavier tax deductions? Even though I haven't really been in 2 jobs at the same time? Dull one.

Your tax code will be wrong initially - you may suffer more tax or maybe less...either way, once you have left the first umbrella and got your P45 you will be able to get HMRC to issue a correct coding notice so that the tax sorts itself out.

Craig

LisaContractorUmbrella
23rd July 2013, 13:01
Why not refuse to change umbrella companies??? If you work on 2 employments at the same time, your tax free allowance can only be applied to one so you will pay basic rate tax on the other through a BR or D0 tax code (20% or 40% on all your income).

LisaContractorUmbrella
23rd July 2013, 13:02
I have a really out there, blue sky helicopter idea. It's new, never been thought of before and might be a bit complex but....

Have you thought about speaking to you umbrella to see how they will deal with this first?

You have such a way with words NLUK :rollin::rollin::rollin:

northernladuk
23rd July 2013, 13:03
Bearing in mind (s)he is employed by the Umbrella could they not sort out his/her tax code for her/him?

IrnBru
23rd July 2013, 13:04
Why not refuse to change umbrella companies??? If you work on 2 employments at the same time, your tax free allowance can only be applied to one so you will pay basic rate tax on the other through a BR or D0 tax code (20% or 40% on all your income).

If I refuse then couldn't that affect the chance of me getting the contract? Would they then offer to someone else who would take one of the umbrella companies?
As this new contract is only for 3 months I'm hoping I really don't have to go through this all the time! One day, I will go Ltd.. :eyes

LisaContractorUmbrella
23rd July 2013, 13:06
Bearing in mind (s)he is employed by the Umbrella could they not sort out his/her tax code for her/him?

How do you mean - sort out? If you have two jobs at the same time one of them will always have to be BR or D0 tax code because you can't have your tax free allowance twice - the new umbrella company would update the tax code once the OP had moved over and was able to provide them with a P45

Craig at Nixon Williams
23rd July 2013, 13:06
Why not refuse to change umbrella companies??? If you work on 2 employments at the same time, your tax free allowance can only be applied to one so you will pay basic rate tax on the other through a BR or D0 tax code (20% or 40% on all your income).

That would only be temporary until the tax code gets sorted out...if it gets done right then the overall amount of tax should be correct by the end of teh tax year.

Craig

LisaContractorUmbrella
23rd July 2013, 13:07
If I refuse then couldn't that affect the chance of me getting the contract? Would they then offer to someone else who would take one of the umbrella companies?
As this new contract is only for 3 months I'm hoping I really don't have to go through this all the time! One day, I will go Ltd.. :eyes

It all depends how badly they want your skills tbh - if you have rare skills in a sought after area then they probably won't try too hard to make you move

LisaContractorUmbrella
23rd July 2013, 13:08
That would only be temporary until the tax code gets sorted out...if it gets done right then the overall amount of tax should be correct by the end of teh tax year.

Craig

Yes, until he moves to a single employer and they can then apply the code on his P45

Craig at Nixon Williams
23rd July 2013, 13:11
One day, I will go Ltd.. :eyes

Out of my own curiosity, what is the main thing that has stopped you from going Ltd previously?

Craig

IrnBru
23rd July 2013, 13:13
Thanks for the quick advice folks! I will speak wit the agency first to see if they will accept the umbrella company I am with just now. If that fails then I will just have to choose another one.. :ohwell

IrnBru
23rd July 2013, 13:14
Out of my own curiosity, what is the main thing that has stopped you from going Ltd previously?

Craig

I am new to the contracting, only started in March this year. Umbrella was the easier option for sorting out tax , insurance, etc.

LisaContractorUmbrella
23rd July 2013, 13:27
I am new to the contracting, only started in March this year. Umbrella was the easier option for sorting out tax , insurance, etc.

A very sensible move :wink

TheFaQQer
23rd July 2013, 13:30
Make sure you account for expenses correctly. If you no longer have the intention to conduct multiple projects at different locations, then you can't claim travel etc. because you aren't a mobile worker.

Likewise if you are only planning to work on the one project for the new umbrella, you shouldn't be claiming expenses because that one place is your permanent place of work.

Craig at Nixon Williams
23rd July 2013, 13:31
A very sensible move :wink

An unbiased opinion there...:tongue

IrnBru
23rd July 2013, 13:37
Make sure you account for expenses correctly. If you no longer have the intention to conduct multiple projects at different locations, then you can't claim travel etc. because you aren't a mobile worker.

Likewise if you are only planning to work on the one project for the new umbrella, you shouldn't be claiming expenses because that one place is your permanent place of work.

I start my new contract on 1st August and as far as I am led to believe this will be traveling only to a single place. Does this mean then that I will not be able to get travel expenses deducted from tax?

IrnBru
23rd July 2013, 13:38
A very sensible move :wink

;)

Craig at Nixon Williams
23rd July 2013, 13:38
I start my new contract on 1st August and as far as I am led to believe this will be traveling only to a single place. Does this mean then that I will not be able to get travel expenses deducted from tax?

If you only expect to be there for 3 months then you should be able to make a claim for travel etc.

Craig

TheFaQQer
23rd July 2013, 13:40
I start my new contract on 1st August and as far as I am led to believe this will be traveling only to a single place. Does this mean then that I will not be able to get travel expenses deducted from tax?

If you have a temporary place of work, then you can claim travel expenses from your permanent place of work to the temporary one.

If you are an employee of an umbrella company and you only do one contract with them, then the place that you are doing the work is your permanent place of work, so you can't claim travel expenses. If you are going to do more than one contract with them, then you can claim travel because they are temporary places.

As soon as you hand in your notice to the umbrella company, you must stop claiming travel expenses, regardless.

TheFaQQer
23rd July 2013, 13:41
If you only expect to be there for 3 months then you should be able to make a claim for travel etc.

Craig

I disagree. If there is only the expectation to do one contract with this umbrella, then how can you class the place of work as temporary?

LisaContractorUmbrella
23rd July 2013, 13:44
Make sure you account for expenses correctly. If you no longer have the intention to conduct multiple projects at different locations, then you can't claim travel etc. because you aren't a mobile worker.

Likewise if you are only planning to work on the one project for the new umbrella, you shouldn't be claiming expenses because that one place is your permanent place of work.

Good point - do you want a job TF? and something you may like to point out to the agency that wants you to move - travel and subsistence expenses can only be claimed if you are travelling to a temporary workplace; if you only work on one assignment whilst in the umbrella company's employ it will automatically become a permanent workplace and the costs would not be allowable as expenses

IrnBru
23rd July 2013, 13:44
I disagree. If there is only the expectation to do one contract with this umbrella, then how can you class the place of work as temporary?

I may be mistaken here but would permanent not be a proper permanent contract without a set end date?

LisaContractorUmbrella
23rd July 2013, 13:45
If you only expect to be there for 3 months then you should be able to make a claim for travel etc.

Craig

Nope. Travel only allowable to a temporary workplace

LisaContractorUmbrella
23rd July 2013, 13:45
I may be mistaken here but would permanent not be a proper permanent contract without a set end date?

Nope this is temporary as defined by HMRC - whole different kettle of bananas

Craig at Nixon Williams
23rd July 2013, 13:47
I disagree. If there is only the expectation to do one contract with this umbrella, then how can you class the place of work as temporary?

Good point TheFaQQer, if you are only have one place of work during the employment with the umbrella (in this case one contract) then that will not be seen as temporary.

Craig

IrnBru
23rd July 2013, 13:49
Good point - do you want a job TF? and something you may like to point out to the agency that wants you to move - travel and subsistence expenses can only be claimed if you are travelling to a temporary workplace; if you only work on one assignment whilst in the umbrella company's employ it will automatically become a permanent workplace and the costs would not be allowable as expenses

Thanks, that clarifies things more clearly.

LisaContractorUmbrella
23rd July 2013, 13:59
Thanks, that clarifies things more clearly.

Anytime :wink

IrnBru
23rd July 2013, 14:23
Ok I have asked the agency and as expected they said no to accepting the umbrella company I have already :mad

However, they have also came back an said that they have spoke to Parasol and if I fill out a P46 then I won't get heavy taxed and I will still get paid with my other umbrella company.

Can any one confirm if this information is correct?

LisaContractorUmbrella
23rd July 2013, 14:31
Ok I have asked the agency and as expected they said no to accepting the umbrella company I have already :mad

However, they have also came back an said that they have spoke to Parasol and if I fill out a P46 then I won't get heavy taxed and I will still get paid with my other umbrella company.

Can any one confirm if this information is correct?

No, it isn't - you would be obliged to complete section C of the P46 which is a declaration to say that you have another job - they would then have to apply a BR tax code (20% of everything) which may then be altered to D0 through a coding notice from HMRC if you are a higher rate tax payer

IrnBru
23rd July 2013, 14:36
No, it isn't - you would be obliged to complete section C of the P46 which is a declaration to say that you have another job - they would then have to apply a BR tax code (20% of everything) which may then be altered to D0 through a coding notice from HMRC if you are a higher rate tax payer

That's true. Sounds a bit of a pain since I will then have to chase up to get my tax code changed again in 4 weeks!

LisaContractorUmbrella
23rd July 2013, 15:45
That's true. Sounds a bit of a pain since I will then have to chase up to get my tax code changed again in 4 weeks!

Sorry but yes it will be a bit of a pain :frown

stek
23rd July 2013, 15:47
Thanks, that clarifies things more clearly.

Isn't that an oxymoron?


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TheFaQQer
23rd July 2013, 15:49
Isn't that an oxymoron?


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No. It's tautology.

LisaContractorUmbrella
23rd July 2013, 15:50
Isn't that an oxymoron?


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an oxymoron is something like 'an honest politician'

stek
23rd July 2013, 15:51
No. It's tautology.

I always get them arse about face!


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LisaContractorUmbrella
30th July 2013, 10:40
Have been thinking about the OP's situation and I have discovered a slight obstacle to working for 2 umbrella companies at the same time. An umbrella company employee works under an over-arching contract of employment which maintains continuity of employment and creates a series of temporary workplaces under a global contract of services - HMRC's requirements for an over-arching contract include the following:

A definitive list cannot be provided as to what would suffice in relation to mutual obligations in the gaps between assignments. Some examples of provisions which may be present in a contract to support continuing obligations on the part of both the employer and the worker are:

an obligation by the worker to accept and do work and an obligation on the employer to pay a retainer during such periods when work was not offered;
the guarantee by the employer of a minimum number of hours work over a 12 month period would likely provide an obligation on the part of the employer (see ESM2045;
a promise by the worker to work exclusively for the employer during the duration of the contract i.e. the worker can not work for anyone else, would be an obligation on the part of the worker;
the requirement for the worker to work when required by the employer would be an obligation on the part of the worker;
the requirement for the worker to accept any assignments given would be an obligation on the part of the worker;
the requirement for the worker to work at any location as directed would be an obligation on the part of the worker.

Because an over-arching contract has to be in place in order for the contractor to claim travel and subsistence expenses I think working for two at the same time may invalidate it

CoolCat
6th August 2013, 18:47
Re "a promise by the worker to work exclusively for the employer during the duration of the contract i.e. the worker can not work for anyone else, would be an obligation on the part of the worker" I doubt that is the full story. Its no different to working for a regular consultancy, being shopped out to various client sites, claiming expenses for all of it (normally claim to be home based so stepping out of the house is legit expenses). And you would be surprised the number of permie staff for consultancies who are able to work additionally for other people. From the obvious stuff like the TA, through to helping out at family shop at the weekend etc. I have never heard of tax man having a problem with this.

Some legit umbrella contracts explicitly allow you to work for someone else at the same time...

etc

LisaContractorUmbrella
7th August 2013, 09:16
Mutuality of obligation is an essential element of an over-arching contract - how would you prove obligation on the part of the worker if they were not obliged to take work offered as they had a relationship with another umbrella company

CoolCat
7th August 2013, 09:24
Mutuality of obligation is an essential element of an over-arching contract - how would you prove obligation on the part of the worker if they were not obliged to take work offered as they had a relationship with another umbrella company

I dont know, how does it work for permies working for a normal consultancy? As per simple examples above?

LisaContractorUmbrella
7th August 2013, 09:39
I dont know, how does it work for permies working for a normal consultancy? As per simple examples above?

That situation applies to permanent workers rather than workers who are engaged on a series of temporary assignments under an over-arching contract of employment.