Umbrella companies

[Pseudonym]

Hello all, How is everybody?

I need to find/use an umbrella company, and I am after some recommedations please?

I've contacted 3 so far (all FCSA members), which is a requirement of the agency I'm going through. I don't mind that though, as at least I know there is some level of audit with those companies.

Fees/Margin. These range in price, and basically what you're paying for is someone else to screw you over for tax/NI/apprenticeship levy(that one really pisses me off!), etc etc etc. Plus, I have to use their pension fund, not mine, so more management fees to be paid annually to the pension fund company. Christ, the more I type, the more irritated I'm getting, so come on all you contractors, help a Lady out..................... please...

Thanks in advance.

[Pseudonym]

Oh yeah, I forgot.

I need to sort out the SDC part. Some companies are saying the end client needs to complete this assessment to see whether or not you're under their Supervision (S), Direction (D) or control (C), but others are saying I should do this assessment. I don't have a problem with that personally as I would like to claim my expenses over and above commuting as I will be out and about on behalf of the end client, and being an HSE bod, I will probably need PPE too at some stage (depending what's requested of me in terms of assignment), and obvs, parking fees.

What has been your experience of completing these assessements?

[Rockburner]

Umm - are you sure you're on the right forum??

[chutzpah]

Hey @Pseudonym, I used to work for an umbrella company but it was a few years ago now so not so hot on recommendations. Just a question, why do you have to use their pension provider? You can opt out and make your own contributions.

Second question, is this something you're going to be doing a lot of, or just a temporary thing? If you're looking at expenses other than travelling to a different place of work, doing it for longer and for multiple clients why not look at a limited company instead?

[Pseudonym]

Umm - are you sure you're on the right forum??

Yup, Dadsnet innit.

[Pseudonym]

Hey @Pseudonym, I used to work for an umbrella company but it was a few years ago now so not so hot on recommendations. Just a question, why do you have to use their pension provider? You can opt out and make your own contributions.

Second question, is this something you're going to be doing a lot of, or just a temporary thing? If you're looking at expenses other than travelling to a different place of work, doing it for longer and for multiple clients why not look at a limited company instead?

It's a limited 1 year contract, and a needs must on my part, as nothing else is biting at the moment, the agency that got me this post insists I use an umbrella company (they recommended 2 FCSA ones to me), plus I contacted a further one, as there are literally hundreds out there, with outstretched grubby paws.

Re: the pension. No, on a basic level, but if I opt out, surely then my contributions to my own pension fund would be from net earnings, which means when I come to draw it down, I would end up paying tax twice (1st earned, then after tax once HMRC get their cut), plus wouldn't I lose out on the tax relief if I opted out?

I doubt I'm going to carry on using an umbrella company in the future, as my plan is to land a permanent role. I don't intend being a long time contractor, plus I don't want the hassle of a limired company. If I need one, my Hubby has one, but I can't see the agency agreeing to me using his limired company.

[chutzpah]

That's fine and understood, in fact back in my day it was part of our positioning. We were there as a matter of convenience. If you had multiple roles and were going to be doing it for some time we'd suggested we were the wrong service for you (despite what your recruiter may say).

Also understood on the pension, hopefully at worse it won't be too costly to transfer it out once you're done.

[v8-powered]

Out of all those offered to me I chose a company called JSA, good on fees and also will transfer to my private pension via salary sacrifice for no additional fee.

[The Martian]

Politely refuse if you can - ask for direct invoice and register self employed (if you aren't already) umbrella companies are a rip off load of cunts lapping it up because people are shitting it about IR35 but it's only a one year contract so it's unnecessary.

[slowsider]

Have you looked at Davek?

[v8-powered]

Politely refuse if you can - ask for direct invoice and register self employed (if you aren't already) umbrella companies are a rip off load of cunts lapping it up because people are shitting it about IR35 but it's only a one year contract so it's unnecessary.

All depends on the determination the client gives you, unless you want to piss them off by dragging them to appeal.

My role is clearly outside of IR35 however, illegally, the client wants all contractors under to make life easier for them so I have to accept it.

[Pseudonym]

Out of all those offered to me I chose a company called JSA, good on fees and also will transfer to my private pension via salary sacrifice for no additional fee.

Thanks, just looked them up. They're very pricey.

Politely refuse if you can - ask for direct invoice and register self employed (if you aren't already) umbrella companies are a rip off load of cunts lapping it up because people are shitting it about IR35 but it's only a one year contract so it's unnecessary.

I'm not disagreeing with you, but this is a public sector role, so no chance of that.

Have you looked at Davek?

Yeah, only for when the shit comes raining down.

[G.P]

After 10 years of operating my Limited company and contracting in the commercial / Procurement / contract management space in Comms and IT, I've just accepted a perm role.

IR35 have killed that market overnight.
I'm currently outside IR35, but 99% of project / program roles I see are now inside IR35. If you're going PAYE you might as well get the security of a Perm role. I'm taking a perm role with the people I'm currently contracting for. I start as perm on June 1. I reckon it'll cost me around £25k a year.

Have you thought of asking the agent to get you on the customers payroll and simply take a fee from the customer instead of a margin on your day rate?

Best of luck

[v8-powered]

Out of all those offered to me I chose a company called JSA, good on fees and also will transfer to my private pension via salary sacrifice for no additional fee.

Thanks, just looked them up. They're very pricey.

Negotiated £15 per week including private pension monthly transfer, nearly half what others were quoting me. What are you being quoted then?

[Silly Car]

In terms of pension, you are kinda there or there about.

If the umbrella co make the contributions, then there is no Employer or employee national insurance
If you make the contributions, then there is likely to be NI on both (unless you fund the pension from your dividends*)

From an income tax point of view, company pay gross from gross profits, individuals pay net from net pay and the pension provider claims tax back from HMRC (or more accurately, pen co reclaims basic rate tax, you reclaim higher rate difference via self assessment). So no double taxation at retirement.

All employers have to offer workplace pensions with a minimum of 3% employer / 5% employee contributions, most workplace schemes are capped at 0.75% pa charge on default, many are less, but be wary of now:pensions (£18 per year plus 0.3% p.a.), nest (1.8% contribution charge plus 0.3% p.a.) No workplace scheme applies a transfer out charge.

* employers can effectively pay what ever they can justify into a pension on behalf of an employee but there may be tax consequences for contributions in excess of £40k pa, employees are capped at the lower of £40k and 100% of earnings (salary and bonus but not dividends or expenses). Some contributions are permitted beyond £40k but you need the earnings in the tax year to justify higher payments.

Yes, I boringly know my shit when it comes to pensions