IR35 post April 2020: Choosing a legitimate Umbrella IR35 post April 2020: Choosing a legitimate Umbrella - Page 7
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  1. #61

    Some things in Moderation

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    Quote Originally Posted by DolanContractorGroup View Post
    Hi cojak,

    Most compliant umbrellas use 'NMW and profit share/bonus' type wording in the employment contracts, so some of your terms may come up.


    Thanks

    Zeeshan
    Thanks for point this out Zeeshan.
    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
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  2. #62

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    Quote Originally Posted by DolanContractorGroup View Post
    Hi cojak,

    Most compliant umbrellas use 'NMW and profit share/bonus' type wording in the employment contracts, so some of your terms may come up.


    Thanks

    Zeeshan
    Can you look at https://www.contractoruk.com/forums/...ml#post2734393 and tell us what bits are there that you as an legitimate umbrella company would and would not use.

    Imagine there are scam "umbrella" companies who are trying to look very much like a proper PAYE complaint ones (even to the point that the difference in end pay is not an obvious tell) - they pay 70% say and are pocketing 20% for themselves.

    What words in the contract and marketing should people be looking for to avoid falling into a trap as FCSA are as much use as a chocolate teapot here...
    Last edited by eek; 25th February 2020 at 14:41.
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  3. #63

    Should post faster

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    Quote Originally Posted by eek View Post
    Can you look at https://www.contractoruk.com/forums/...ml#post2734393 and tell us what bits are there that you as an legitimate umbrella company would and would not use.

    Imagine there are scam "umbrella" companies who are trying to look very much like a proper PAYE complaint ones (even to the point that the difference in end pay is not an obvious tell) - they pay 70% say and are pocketing 20% for themselves.

    What words in the contract and marketing should people be looking for to avoid falling into a trap as FCSA are as much use as a chocolate teapot here...
    Hi eek,

    From the post you linked, both of the top points are worded in a way that would imply something fishy is going on.

    It could be argued that NMW is indeed a "salary portion" (as both NMW and bonus make up the salary), however, tax and NI would never JUST be deducted on the NMW portion. Both NMW and bonus are subject to the deductions. They then mention expenses, and 'tax free element'. Again, expenses are paid from taxable income and essentially are 'tax free'.

    I believe the issue is that the wording is carefully chosen to mask any outward appearance of tax evasion. Unfortunately, contractors will (and many do!) fall for this because they won't be looking properly at the language used.

    Also, a 24 page umbrella employment contract? What are they putting in there to make it that long?

    I think cojak summed it up well with the terms she used, but contractors should be aware that 'NMW' and 'bonus' are found in compliant models too.

    EDIT: And I'm not saying this because we're FCSA members, but going by the information FCSA members put out, and what others put out, I can see why agencies and clients choose to have FCSA only PSLs. We just went through our annual audit, conducted by an international auditor, and it was very thorough and they even recommended some changes on things we were already more than compliant on!

    Thanks


    Zeeshan
    Last edited by DolanContractorGroup; 25th February 2020 at 15:47.

  4. #64

    Some things in Moderation

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    Default One more thing...

    Go to the London Gazette and search for the name of the parent company that you find in the contract.

    The Gazette | Official Public Record

    If they turn up there with a Winding Up Order, stop all contact with them and find another umbrella company.

    Also look up the name in Companies House and look at the 'Insolvency' tab.

    Trust me, you'll thank us later...
    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
    - Voltaire/Benjamin Franklin/Anne Frank...

  5. #65

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    Quote Originally Posted by cojak View Post
    Go to the London Gazette and search for the name of the parent company that you find in the contract.

    The Gazette | Official Public Record

    If they turn up there with a Winding Up Order, stop all contact with them and find another umbrella company.

    Also look up the name in Companies House and look at the 'Insolvency' tab.

    Trust me, you'll thank us later...
    Not just go now - you need to continually check that your umbrella is not listed there.
    merely at clientco for the entertainment

  6. #66

    Some things in Moderation

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    Quote Originally Posted by eek View Post
    Not just go now - you need to continually check that your umbrella is not listed there.
    True.

    And if you do discover that they have a winding up order against them, you need to immediately terminate your contract with them and find yourself a decent umbrella - and speak to the Citizen's Advice Bureau for further help - this is out of our league...
    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
    - Voltaire/Benjamin Franklin/Anne Frank...

  7. #67

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    Default Helpful advice!

    Quote Originally Posted by cojak View Post
    If you've come here looking for advice regarding umbrella companies here it is.

    Choose a company that complies with HMRC guidelines and current UK legislation*.

    You can find a selection here (not perfect but it’s the best we’ve got): FCSA • Members Directory • Accredited Members FCSA

    Some companies will offer you the moon on a stick, or 70%+ of your day rate, or a 'unique solution' to IR35. It sounds too good to be true, doesn't it?

    That's because it is.

    Have a read of this: Don't be fooled by imposter umbrella companies

    Because if you join them you will very likely end up here HMRC Scheme Enquiries

    Also, have a read of this: https://www.contractoruk.com/forums/...-umbrella.html

    And read the contract before you sign!

    And then check if the company is in the London Gazette.

    And for newbies, definitely don't join a company with offices in the Isle of Man or Jersey (or Directors with any association to IOM, now or in the past).

    Just don't.

    (*When an umbrella states that they are 'Fully HMRC compliant', ask them what they mean by this - do they mean that they comply with HMRC guidelines? HMRC do not offer compliance reviews and will not 'approve' umbrella companies. Basically they say this just to get you to sign up.)

    PS. Growth Share Schemes are definitely NOT legit. https://www.contractoruk.com/forums/...e-schemes.html
    Thanks cojak, this is helpful advice. I'd definitely recommend always sticking to the FCSA-accredited list. And always ask for an example take-home-pay (sometimes called a pay-illustration) before you join a company. This can give you a realistic idea of what to expect, and how to compare one to another. Also, if any Umbrella has been misleading in their pay-example, you will very quickly find them out, and should be able to change to a better solution pretty quickly.

  8. #68

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    Quote Originally Posted by Grace at ADVANCE View Post
    Thanks cojak, this is helpful advice. I'd definitely recommend always sticking to the FCSA-accredited list. And always ask for an example take-home-pay (sometimes called a pay-illustration) before you join a company. This can give you a realistic idea of what to expect, and how to compare one to another. Also, if any Umbrella has been misleading in their pay-example, you will very quickly find them out, and should be able to change to a better solution pretty quickly.
    1) Why FCSA?

    2) Dont' you issue Key Information documents (you are supposed to since April 2020)

    3) given that Key information documents don't have a standard input how can you be sure the information contained is identical.

    4) What is a better solution when all umbrellas are identical (except for the quality of their service, their fee and any salary sacrifice options they offer).

    Once again the fact you saying that umbrella companies are not identical shows how bad the umbrella company industry actually is. You need to compete on service not on lies and stop pretences that the final income figure will differ by more than a negligible few pounds.
    Last edited by eek; 3rd November 2020 at 16:59.
    merely at clientco for the entertainment

  9. #69

    Should post faster

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    Quote Originally Posted by eek View Post
    2) Dont' you issue Key Information documents (you are supposed to since April 2020)

    3) given that Key information documents don't have a standard input how can you be sure the information contained is identical.
    Just to clarify these 2 points.

    The obligation to provide KIDs is on the recruitment agency, not the umbrella employer. But yes, agencies do request the information from their umbrella partners which they then pass on to the workers.

    Agencies use either the standard template, or one they've made in-house. But once the template has been agreed they use the same one for all workers, so it's pretty easy for workers using that particular agency to see what differences there are between the different umbrella employers the agency has partnered with.


    Thanks

    Zeeshan

  10. #70

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    Thanks for your input there Zeeshan.

    And to pick up on the other two aspects raised;
    1) Why FCSA? - all FCSA accredited members have to be rigorously audited by external auditors, and adhere to a strict code of practice. For more information on how companies apply for accreditation this may be a helpful starting point : How to Apply for FCSA Accreditation • FCSA

    4) What is a better solution when all umbrellas are identical ? - on this point, I agree with the list you have already set out. Quality of service, margin, salary sacrifice options - these can all make a huge difference between a positive and negative Umbrella experience, and may make a big difference to you personally. All providers will differ as to their particular approach, so all providers may not suit you. Perhaps select a handful that provide the solutions you're looking for, and then give them a quick call to test them out?

    And I could not agree more with your emphasis on service. Service is key!

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