IT Contractors - any use a PAYE Umbrella company?

[Landlord]

Hi gang,

I need to make a decision sharpish about which umbrella company to use and I wondered whether anyone has any recommendations for the company they use/have used.

Cheers!
Phil.

[V8mate]

Not very advisable anymore.
Better off starting your own Ltd.

[bigandclever]

In theory, all umbrella companies will operate in the same way, so the only difference will be in the amount they charge for their services. The forums at contractoruk.com have plenty of opinions along the lines of "What about (say) Giant?" good..bad..good..horrific..rubbish.. fine

Do it properly, go Limited

Actually, that's no help is it, sorry!

Edited by bigandclever on Wednesday 8th October 15:06

[Allanv]

Landlord said:

Hi gang,

I need to make a decision sharpish about which umbrella company to use and I wondered whether anyone has any recommendations for the company they use/have used.

Cheers!
Phil.

I use Paystream. But i am LTD and they just look after the paperwork etc... I don't think umbrella style of doing things still exist.

http://www.paystream.co.uk/

Edited by Allanv on Wednesday 8th October 15:09

[SirTainly]

Asked the guys here that question a few weeks back, they all said it wasn't a good idea these days and setting up your own company is far better. Now that the worker substitution part of IR35 has been removed that is.

[Landlord]

I'm only planning on doing this very short term (6 months or so) so the cost involved in setting up and running and subsequently closing my own Ltd company means it's probably better that I use and umbrella.

Thanks for forum link - I'll check that out too.

[Snoggledog]

I'm with an umbrella compnay and I really can't recommend it at all. Absolute pain in the backside

[Landlord]

Snoggledog said:

I'm with an umbrella compnay and I really can't recommend it at all. Absolute pain in the backside

I actually think my "old" Ltd company might still be in existence so I could use that (I thought it'd been wound up but Co's House says it's active) so I might give that a go.

[bigandclever]

Landlord said:

I'm only planning on doing this very short term (6 months or so) so the cost involved in setting up and running and subsequently closing my own Ltd company means it's probably better that I use and umbrella.

Thanks for forum link - I'll check that out too.

Get a quote from an IT friendly accountant - you may be surprised. I use Darren Upton & Associates - there are others who come recommended on contractoruk, get a quote at least

I also nicked this from interweb...

technojobs said:

Avoid umbrella companies that have entry fees, exit fees or minimum term commitments with penalties for leaving early. There are plenty of umbrella companies to choose from so be sure to check for hidden costs.

Some umbrella companies have complex fee structures that link their fees to your earnings. As you can imagine this can turn out to be expensive for you as a contractor. There are lots of umbrella companies that clearly advertise fixed fee charges.

Steer clear of umbrella companies that tell you that it is ok to claim expenses without receipts. Should HM Revenue decide to investigate your accounts your expenses would be disallowed and you would be liable for all the tax owing.

Choose a compliant and externally reviewed or audited umbrella company. Auditing is becoming increasing more common and is helping to increase the quality of the services that the umbrella companies are offering.

The only way of receiving payment through a third party, post 2007 budget, is through PAYE. Your umbrella company should be deducting income tax and national insurance contributions from your earnings. Any other payment structure e.g. dividends, loans etc has been declared illegal by the Government and, despite what some unscrupulous companies may tell you, there are no loopholes.

Personal recommendation is a good indicator when making your decision but bear in mind that some agency recommendations may come from 'incentives' which are given by the umbrella company.

Finally when choosing an umbrella company remember – if it seems too good to be true then it probably is!

[Gaspode]

SirTainly said:

Asked the guys here that question a few weeks back, they all said it wasn't a good idea these days and setting up your own company is far better. Now that the worker substitution part of IR35 has been removed that is.

I've never been with an umbrella company, and am very happy running my own Ltd co. So far as IR35 is concerned, my accountant reckons that as long as I maintain a subsitutability clause on my contract, maintain clear evidence of being in business on my own account (ie maintain a website and openly solicit for clients), and lastly and most importantly pay myself a sensible wage so HMRC don't feel they're getting ripped off on the NI, then they'll be quite happy and leave me alone - which they seem to have done so far.

[tomash]

try These I have used em in the past and they r pretty good with a fixed fee rather than a percentage.

[fullbeem]

I used Parasol when I was contracting for the University of Warwick.

Charged me a fixed fee every week as I was being paid weekly, and was able to claim expenses with minimul fuss (petrol/milage, lunch, eye tests etc.

Never had a problem with the umbrella company themselves, it was the agency I was working for that was the pain in the arse as they kept being slow with paying me.

[krap]

Landlord said:

Hi gang,

I need to make a decision sharpish about which umbrella company to use and I wondered whether anyone has any recommendations for the company they use/have used.

Cheers!
Phil.

Hello Phil

I've been having no end of troubles with my umbrella company and i'm currently looking to getting my own limited company as i'm getting an average of 33% taken from my wages! So if you do have a limited company running, use it!

HTH

Sam

[ali_kat]

tomash said:

try These I have used em in the past and they r pretty good with a fixed fee rather than a percentage.

I'm seconding these Phil

[sadako]

I'm currently using JSA Associates who are very good, although not as cheap as some others.

I am hearing a lot of problems from people using Giant over their timesheet system needing to have specific versions of internet explorer to work, won't work in firefox, won't work on ie7, won't work on apple mac and so on with no alternate way of filling it out.

[Cussy]

Go limited but make sure you have a good accountant as well, works for me.

[TomE]

I have used Crystal Umbrella for the last 6 months, just left them as I have gone Ltd. Thourghly reccomend them, never had a problem with payments and everything was sorted out quickly and easily. They didnt charge any startup fees or closing down fee's either.

If you want specific contact details pm me and I can give you the details of the person who I used to deal with, she was more than helpful.

[UpTheIron]

Hi Phil,

There's some rubbish being spouted on this thread (IMHO, no offense intended), but there are a few grains of truth dotted around...

- If your contract is not IR35 caught, then running your own Limited Company is more tax efficient.
- If your contract is IR35 caught, then running your own Limited Company is still more tax efficient, but not by much.
- Any Umbrella boasts about "dispensations" and "unreceipted expenses" to be taken with a pinch of salt. If you don't incur the expense, you can't claim it, receipted or otherwise.
- Anything that involves offshore schemes, EBT's, Family Trusts or DTA's is best avoided.
- As bigandclever states, the only difference between all brollies is their charge (and their service) your take home will be otherwise the same.
- MSC's, Composite Companies and anything that pays using dividends (other than your own Ltd) is effectively illegal.

V8mate said:

Not very advisable anymore.
Better off starting your own Ltd.

Not true. The first part anyway. I'd agree with the second part (from a tax effiency point of view)

krap said:

I've been having no end of troubles with my umbrella company and i'm currently looking to getting my own limited company as i'm getting an average of 33% taken from my wages!

Either you are on a low rate, or that isn't that bad.

SirTainly said:

it wasn't a good idea these days and setting up your own company is far better. Now that the worker substitution part of IR35 has been removed that is.

Misinformed. IR35 legislation doesn't affect the use of a PAYE umbrella. Nor has the legislation changed.

Landlord said:

I actually think my "old" Ltd company might still be in existence so I could use that (I thought it'd been wound up but Co's House says it's active) so I might give that a go.

Think?!!! If you're not sure then I'd suggest you were not, and still are not, cut out to run a Limited Company, at least not without LOTS of help from an accountant and plenty of self discipline. I don't mean to offend, but if you are still a director of a Ltd Company that you thought had been wound up, then you have to wonder what obligations you have failed to keep - Co House returns, Tax Returns, PAYE filing etc etc.

bigandclever said:

Get a quote from an IT friendly accountant - you may be surprised. I use Darren Upton & Associates - there are others who come recommended on contractoruk, get a quote at least

More good advice (both the forum and the accountant). Explain your situation, and also consider how and when you would need to extract money from your Ltd, as this could affect the tax efficiency.

[Landlord]

UpTheIron said:

- Anything that involves offshore schemes, EBT's, Family Trusts or DTA's is best avoided.

Ooops. I've gone and subscribed to a EBT scheme. On a personal recommendation though. I do understand too, however, that these are being investigated by the HMRC and will probably, very shortly, be closed.

UpTheIron said:

Think?!!! If you're not sure then I'd suggest you were not, and still are not, cut out to run a Limited Company

Exactly why I was looking to go the umbrella route! I can't stand all that ste that goes with your own Ltd Co. I said "I think" because my wife deals with it all and I was under the impression that it'd already been wound up. It appears it's still in the process thereof.

Well, I jumped in with both feet with Nola Consulting based on a mates personal recommendation. Thanks to all for the very informative input. I'm off now never to read this thread again forn fear of the time where a crucial piece of advice has been missed/ignored by me!!

Thanks all.

Edit: HMRC not IR.

Edited by Landlord on Wednesday 8th October 21:42

[LittleBro]

I used to use Giant (http://www.giantgroup.com/Strongbox.aspx) for a while and found them to be very efficient.

I don't use them anymore as I was doing Ltd and they said it wasnt advisable to continue down this route as a part of an umbrella. I believe they still do PAYE umbrella.