Contracting company forcing us to choose from 1 of only 5 umbrella companies Contracting company forcing us to choose from 1 of only 5 umbrella companies
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  1. #1

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    Default Contracting company forcing us to choose from 1 of only 5 umbrella companies

    Hi all.

    Currently contracting with my own limited company, as are many others on the contract. The contracting company have decided that to continue working for them, everyone will need to go under an Umbrella company once IR35 kicks in.

    They've sent out a list stating that to continue working for them we'll need to choose 1 from a list of only 5 umbrella companies. Funnily enough, 1 of those companies is their own new umbrella that they're setting up.

    My question is - is this even legal? I can understand having to use an FCSA accredited and even a well established firm, but to limit it to 5 firms, 1 of which is their own?

    Thanks for any help.

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    Quote Originally Posted by JG1 View Post
    Hi all.

    Currently contracting with my own limited company, as are many others on the contract. The contracting company have decided that to continue working for them, everyone will need to go under an Umbrella company once IR35 kicks in.

    They've sent out a list stating that to continue working for them we'll need to choose 1 from a list of only 5 umbrella companies. Funnily enough, 1 of those companies is their own new umbrella that they're setting up.

    My question is - is this even legal? I can understand having to use an FCSA accredited and even a well established firm, but to limit it to 5 firms, 1 of which is their own?

    Thanks for any help.
    Hi JG1,

    An end-client setting up their own umbrella company? I've heard of recruitment businesses doing this, but this is a new one.

    And yes, recruiters and end-clients can stipulate which umbrella provider you work for. It depends on the criteria on which those providers were chosen. As you say, most go with FCSA, I wonder what criteria your client is using...


    Thanks

    Zeeshan

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    Quote Originally Posted by JG1 View Post
    Hi all.

    Currently contracting with my own limited company, as are many others on the contract. The contracting company have decided that to continue working for them, everyone will need to go under an Umbrella company once IR35 kicks in.

    They've sent out a list stating that to continue working for them we'll need to choose 1 from a list of only 5 umbrella companies. Funnily enough, 1 of those companies is their own new umbrella that they're setting up.

    My question is - is this even legal? I can understand having to use an FCSA accredited and even a well established firm, but to limit it to 5 firms, 1 of which is their own?

    Thanks for any help.
    How is that terrible? Most major financial institutions are offering just one PAYE option...
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    Why do people assume things aren't legal just because they don't like it?
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    Quote Originally Posted by JG1 View Post
    They've sent out a list stating that to continue working for them we'll need to choose 1 from a list of only 5 umbrella companies. Funnily enough, 1 of those companies is their own new umbrella that they're setting up.
    I heard a similar story about one agency who presented to their contractors in the bank. The options were: An Umbrella from their PSL, a new agency Umbrella or direct via PAYE via the agency (also new).

    When the details got out, it turned out there had been a miscommunication and the agency were only doing their own PAYE, not their own Umbrella. It wasn't clear what the difference was between the two, but that was the wording used.

    Perhaps the same here?
    Last edited by Paralytic; 19th November 2019 at 15:27.

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    Quote Originally Posted by northernladuk View Post
    Why do people assume things aren't legal just because they don't like it?
    Is it legal to write that?

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    Quote Originally Posted by northernladuk View Post
    Why do people assume things aren't legal just because they don't like it?
    I just wonder what laws, precedents or principles they think might be being broken.
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    Quote Originally Posted by northernladuk View Post
    Why do people assume things aren't legal just because they don't like it?
    There is a possibility that being forced to use an umbrella company who take Employers NI out of the advertised rate may be illegal but we are still waiting for the results of court cases regarding that - I know some unions were trying to find a case or 2 last year. Even then I believe the argument is with the agency not the umbrella.

    As for the original question of the OP - at least you have 5 umbrella options all of whom appear to be FCSA accredited and compliant.
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    Quote Originally Posted by eek View Post
    As for the original question of the OP - at least you have 5 umbrella options all of whom appear to be FCSA accredited and compliant.
    I think what JG1 is saying is that they aren't (all?) FCSA umbrellas.

    A newly set-up one won't gain accreditation so quickly.


    Thanks

    Zeeshan

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    Quote Originally Posted by Paralytic View Post
    I heard a similar story about one agency who presented to their contractors in the bank. The options were: An Umbrella from their PSL, a new agency Umbrella or direct via PAYE via the agency (also new). When the details got out, it turned out there had been a miscommunication and the agency were only doing their own PAYE, not their own Umbrella. It wasn't clear what the difference was between the two, but that was the wording used.
    That's probably because they didn't understand the difference

    Umbrella PAYE - Gross Contract Rate (breakdown in april with the KID will clarify all the deductions to the contractor)
    Agency Umbrella - an attempt to set up an umbrella then realising they couldn't do the reverse calculation to give the Employers NI figure, so decided that didn't exist
    PAYE Agency - Taxable Salary provided to the contractor, probably a lower figure than Umbrella PAYE, as they will simply account for the employment costs from the monies from the end client

    Does that help?

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