Is Umbrella Company Right For Me? Is Umbrella Company Right For Me?
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  1. #1

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    Default Is Umbrella Company Right For Me?

    Hi,

    I've been working for RBS for the past 6 months as an IT Contractor. The agency i work for is Hays Recruitment. They also pay me direct.

    My contract renewal is coming up and have been told to switch over to an umbrella company by quite a few of my colleagues but i just wanted to know if is worth my time and also would it benefit me.

    I have looked through a few companies and i've seen one called GoUmbrella which looks quite simple to use and cheap regarding fee's. Another is Parasol which seems to have good feedback but the fee's they charge seem pretty expensive.

    My premium rate of pay is currently £11.21.

    Any advice given i am grateful for.

    Regards

    Mason

  2. #2

    King of updation

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    Quote Originally Posted by Masetw123 View Post
    Hi,

    I've been working for RBS for the past 6 months as an IT Contractor. The agency i work for is Hays Recruitment. They also pay me direct.

    My contract renewal is coming up and have been told to switch over to an umbrella company by quite a few of my colleagues but i just wanted to know if is worth my time and also would it benefit me.

    I have looked through a few companies and i've seen one called GoUmbrella which looks quite simple to use and cheap regarding fee's. Another is Parasol which seems to have good feedback but the fee's they charge seem pretty expensive.

    My premium rate of pay is currently £11.21.

    Any advice given i am grateful for.

    Regards

    Mason
    Can you explain what you mean by that ???

    When you say you are being paid directly by Hays, is this nett of tax and NI ?
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  3. #3

    Still gathering requirements...


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    Most Umbrella companies will be able to give you a breakdown of net pay between PAYE vs. Umbrella. Whilst you'll be paid under the PAYE scheme in both, with Umbrella you can normally claim more expenses (business expenses that is!). Have a look around. It's a very competitve market so you could look at the cheaper ones. Look at <snip>
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  4. #4

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    Hi Mason,

    In the interests of transparency I should declare at this stage that I work for Optionis group, home to Parasol.

    Nevertheless, I thought the below checklist might be useful. It covers some of the most important things to look out for when selecting an umbrella company.

    1) Are fees fully inclusive or do you have to pay for extras such as expenses processing?

    2) Does the umbrella company issue a legally valid employment contract? Remember – you’re entitled to all UK employee statutory rights and benefits.

    3) How quickly does the umbrella company process invoices and payments? It’s one of the most common criticisms levelled at umbrella companies – that they’re slow off the mark in both claiming your payments as well as getting them to you. Check for a service guarantee.

    4) Are they an accredited company with the Freelancer and Contractor Services Association (FCSA)? What other credentials does the organisation have – for example ISO9001 and Investors in People. Seems a bit obvious, but these are useful indicators that the company is well run.

    5) Also investigate their background, trading history and reputation. How long have they been in business? Do they move money offshore? Are they a legitimate PAYE umbrella company or running an offshore tax scheme?

    6) Legitimate allowable expenses. HMRC don’t and won’t approve non-compliant expenses. You will need receipts and you will need to play by the rules. There’s no way around it. Beware of any umbrella companies making grand claims about tax savings. If it looks too good to be true…

    7) Clarify in advance the proportion of payment retained to cover holiday pay and other future entitlements. What’s held back? When will you see it?

    8) Will you need to submit your own tax return and P11D (to account for your expenses) at the end of each year? What about your P60? Are these costs included or will you be charged extra?

    Hope this helps,

    Thanks,

    Mike

  5. #5

    Umbrella Queen

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    Quote Originally Posted by Masetw123 View Post
    Hi,

    I've been working for RBS for the past 6 months as an IT Contractor. The agency i work for is Hays Recruitment. They also pay me direct.

    My contract renewal is coming up and have been told to switch over to an umbrella company by quite a few of my colleagues but i just wanted to know if is worth my time and also would it benefit me.

    I have looked through a few companies and i've seen one called GoUmbrella which looks quite simple to use and cheap regarding fee's. Another is Parasol which seems to have good feedback but the fee's they charge seem pretty expensive.

    My premium rate of pay is currently £11.21.

    Any advice given i am grateful for.

    Regards

    Mason
    If you are going to be moving from agency payroll to umbrella company your rate should be increased to allow for the fact that employment costs and responsibilities will pass from the agency to the umbrella company.

    If you incur costs as a direct result of the contract you may be able to claim these costs as expenses - the umbrella company should be able to advise you what is and what is not an allowable expense according to HMR&C regulations.

    You should be aware that all legitimate umbrella companies work in exactly the same way - the only differential in take home pay should be as a result of variances in margin and nothing else.

    Basically it all boils down to customer service and which company you feel happiest with - recommendations are a good indicator if you are new

    Good luck
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  6. #6

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    Quote Originally Posted by Masetw123 View Post
    Another is Parasol which seems to have good feedback but the fee's they charge seem pretty expensive.
    If you're seriously considering Parasol then you'd be advised to look back at some of the threads from earlier this year ... in particular the dissatisfaction at their additional "employment costs" fee (i.e. in addition to the agreed weekly fee) which effectively equate to 13.8% of your claimed expenses.

    I used Nasa for a while and recommend them. £9.99 per week and no hint of any hidden "employment costs" being deducted.

  7. #7

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    Also what i would like to confirm is what i can actually claim expenses for....?

    E.g Travel to and from work,meals etc etc

  8. #8

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    Quote Originally Posted by Masetw123 View Post
    Also what i would like to confirm is what i can actually claim expenses for....?

    E.g Travel to and from work,meals etc etc
    1. What costs are you going to be incurring as a direct result of the contract ?
    2. What are you intending to do after you have finished this contract?
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  9. #9

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    Well obviously travel to work everyday is an expense, meals and im pretty sure that's about is other than a few training courses here and there. My expenses every week with travel and food are around £80.


    Also the £11.21 is my rate but out of that they take £1.21 an hour for accrued holiday.

  10. #10

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    Quote Originally Posted by Masetw123 View Post
    Well obviously travel to work everyday is an expense, meals and im pretty sure that's about is other than a few training courses here and there. My expenses every week with travel and food are around £80.


    Also the £11.21 is my rate but out of that they take £1.21 an hour for accrued holiday.
    Firstly, you can only claim for travel and subsistence if you are working under an over-arching contract of employment with the umbrella company and you intend to undertake more than one assignment whilst in their employment, secondly is that the rate that you are being paid now by Hays?
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