Advantage of Umbrella over working Direct? Advantage of Umbrella over working Direct?
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    Default Advantage of Umbrella over working Direct?

    Hi
    Can someone explain to me why I would use an Umbrella Company rather than work direct through the Agency?

    I hadn't realised working direct was an option until I just read the contract they sent me - they appear to be assuming I will be working direct even though I said I was going to use an Umbrella....

    Thanks

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    Quote Originally Posted by zippy.mini View Post
    Hi
    Can someone explain to me why I would use an Umbrella Company rather than work direct through the Agency?

    I hadn't realised working direct was an option until I just read the contract they sent me - they appear to be assuming I will be working direct even though I said I was going to use an Umbrella....

    Thanks
    If the agency are offering to pay the same rate direct as they will through an umbrella company you would be no better off but usually the rate is higher as the umbrella company takes on the employer responsibilities
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    And be careful with your terminology - what do you mean by 'work direct through the Agency'?

    To us 'Working direct' means your Ltd company invoicing the Client, therefore being a vendor to the Client. Otherwise you work through the agency (with your Ltd invoicing the agency) and the agency is the vendor to the Client, supplying your services.

    You as a person do not invoice the agent or the client as the onus is then on them to make sure that you have paid your NI and taxes, and they don't like that idea.
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    Quote Originally Posted by cojak View Post
    And be careful with your terminology - what do you mean by 'work direct through the Agency'?

    To us 'Working direct' means your Ltd company invoicing the Client, therefore being a vendor to the Client. Otherwise you work through the agency (with your Ltd invoicing the agency) and the agency is the vendor to the Client, supplying your services.

    You as a person do not invoice the agent or the client as the onus is then on them to make sure that you have paid your NI and taxes, and they don't like that idea.
    Or he's working as a PAYE temp through the agency... which I think may have been the original question.
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    Quote Originally Posted by malvolio View Post
    Or he's working as a PAYE temp through the agency... which I think may have been the original question.
    Oh right, he's a temp, not a contractor at all.

    Then no wonder I was confused, that didn't occur to me.
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    Quote Originally Posted by cojak View Post
    Oh right, he's a temp, not a contractor at all.

    Then no wonder I was confused, that didn't occur to me.
    I WAS a contractor using my own Limited Company. Was going to retire and decided to put my co into MVL 3 months ago. Now a previous client has offered me a contract I cannot turn down (I wasn't looking for work) and I'm trying to work out the best way to go about it.
    I'm not sure if opening another company to do the same thing as the old one, whilst the old one is still going through liquidation, will affect my ability to use Entrepreneur's Relief to get that money out. My accountant thinks I'd have a good argument because I hadn't been offered the contract when I put the co into liquidation, but it's a risk. I'm not big on risk, therefore I think it might be easier just for this one contract, to go PAYE, even though I think it would be an outside IR35 contract.
    Never having looked into this before, I assumed I had to use an umbrella co, I never realised the Agency could pay me directly. I had thought the advantage of an Umbrella Co would be that it allows me to claim travel expenses but apparently if I'm only going to do the one contract through them, then I can't claim them anyway as it won't be classed as a temporary work place. This is apparently the same if I open a Ltd to work just this one contract. If anyone can tell me if this is true even if I spend on average only 2 days or less a week there (so less than 40% of my time), I would be grateful.

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    Quote Originally Posted by LisaContractorUmbrella View Post
    If the agency are offering to pay the same rate direct as they will through an umbrella company you would be no better off but usually the rate is higher as the umbrella company takes on the employer responsibilities
    Thanks Lisa, that's interesting. Agency originally sent me a contract for working direct through them. I told them I would be using an umbrella. They sent me a different form, but didn't mention anything about rate change. I suspect the rate is what it is, I wouldn't expect them to offer more if I was going through a Ltd... I can always ask though!

    If you happen to know the answer to my question in my previous reply re travel and subsistence expenses, your help would be gratefully received!

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    Quote Originally Posted by zippy.mini View Post
    Hi
    Can someone explain to me why I would use an Umbrella Company rather than work direct through the Agency?

    I hadn't realised working direct was an option until I just read the contract they sent me - they appear to be assuming I will be working direct even though I said I was going to use an Umbrella....

    Thanks
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    Quote Originally Posted by BolshieBastard View Post
    Just so 'No!' to brollies.
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    Quote Originally Posted by zippy.mini View Post
    Thanks Lisa, that's interesting. Agency originally sent me a contract for working direct through them. I told them I would be using an umbrella. They sent me a different form, but didn't mention anything about rate change. I suspect the rate is what it is, I wouldn't expect them to offer more if I was going through a Ltd... I can always ask though!

    If you happen to know the answer to my question in my previous reply re travel and subsistence expenses, your help would be gratefully received!
    You are correct - in order to be able to claim travel and subsistence you must be travelling to a temporary workplace; if you know that you will only be working on one assignment whilst in your employment with the umbrella company it would, by default, become a permanent workplace
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