Employ-E/Legal-E ??

xcathx

Hi

Apologies if this has already been discussed elsewhere but a forum search for the company names didn't work.

I've just started work through a local employment agency to cover maternity leave until Aug of next year.

I have been sent a pack of things to fill out and sign including a 'terms of engagement' document from the agency, 'contract of employment' and 'registration form' from Employ-E and an 'expenses claim form' from Legal-E.

There has been no explanation from the agency about who Employ-E and Legal-E are, so I've tried looking online to find out a bit about them.

According to their website, they use expense claims to reduce tax and NI liability without charging the employee any fees.

It seems like instead of the worker claiming these costs off tax at the end of the year, Employ-E/Legal-E pay back some of the savings each week, while retaining a large portion for themselves. They also seem to make other unexplained deductions.

I'd like to know if anyone is familiar with the company/ies and are they legit?
Is this practice legal? On their website is a 'comment on statement issued by HMRC on Pay Day by Pay Day Tax Relief Models' which seems to suggest they are taking advantage of grey areas in legislation.
What are the other deductions for?

Do you think I could opt out of this arrangement and be employed directly with the employment agency? I am happy to make a claim myself if I incur any expenses, so don't need/want them to do this for me, especially if I wouldn't receive the full amount due.

I plan to contact the agency on Mon to discuss the matter but would like to get some unbiased advice from here first.

Thanks in advance

KiKi

AFAIK, Legal-E is an Umbrella company. As you say, you can claim your own expenses back at the end of the tax year without them taking a cut. This may be of interest to you: http://blogs.mirror.co.uk/investigations/2011/08/we-put-legal-es-tax-dodge-for.html

I would agree with you that your hunch to not go with them is right, and you can find other companies to do this more cheaply, or claim it yourself at the end of the tax year.

HTH in some small way!
KiKi

xcathx

Thanks for the reply.

I'd already found that link, it was partly why I posted here. Doesn't look good, does it?

My gut feeling is to avoid them, but don't know if I have any choice. I'd be interested in finding out if anyone else has been in the same situation, as I've never had to deal with umbrella companies before. I've been out of work for several years so am a bit out of touch with things.

Is it common practice for employment agencies to use these sort of companies?

KiKi

Yes - lots of organisations will only 'hire' limited companies and won't touch self-employed individuals. So the umbrella company officially 'employs' you, and you get to work as an employee of a limited company - who then work for the organisation - instead of working as a self-employed sole trader. The umbrella company, as your official employer, handles your tax and NI, and expenses. Most will take a small weekly fee for the pleasure. Some will take a very large fee.

I'm not sure if Legal-E do something additional though, since they talk about tax breaks etc, and I've not heard of them before. But if you have to use an umbrella company, you can use one of your own choosing. I've used Springboard before (which was free as I didn't require their additional paid for services), but there are loads out there, so choose one wisely if you need it.

I'm sure someone else will come along tomorrow who knows more about the tax issues regarding this company.

KiKi

KiKi

Also these links:

http://www.consumeractiongroup.co.uk/forum/showthread.php?310632-An-Umbrella-company-called-Legal-e...-Is-it-legal
http://www.ukbusinessforums.co.uk/forums/showthread.php?p=1382819

xcathx

I forgot to mention earlier, I've already worked Tues - Fri of last week and submitted a timesheet for those hours to the agency as per their instructions. Do I have to sign the contract with Employ-E before they'll pay me for the hours I've already worked?

If I am allowed to chose my own umbrella company, is there any out there that will just pay me normally, without overcomplicating things and deducting money/charging a fee, allowing me to claim my own tax relief?

I have asked the agency for permission to leave work early tomorrow so I can visit them and discuss this in person with them. Do you think they will agree to this, or will they just say I'm not entitled to take any time off?

I'm starting to get quite stressed about this, I'm really pleased I've found a job, but if I'd known that I'd have to be employed by a company that would charge me for doing something I don't want them to do, I wouldn't have considered using an agency.

debsue

Ive posted about theis company before wothout mentioning the name. they deduct holiday pay from your wage and if you dont claim it they keep it
https://forums.moneysavingexpert.com/discussion/3535239=

xcathx

I have been to see my agency but they haven't exactly put my mind at ease. The person I spoke to was very vague, and didn't seem able to give me any explanation of the contracts they want me to sign, or details of the umbrella co. She just handed me their phone no.

They seem to want to give the impression that the umbrella co have found a secret way of saving me money which they don't understand, but 'it's something to do with loopholes' ?!

I have also phoned the tax office, who have confirmed that I can claim allowable expenses myself at the end of the tax year by filling out a P87 form. This is what I plan to do now as it seems straighforward enough.

SteProud

xcathx wrote: »

I have been to see my agency but they haven't exactly put my mind at ease. The person I spoke to was very vague, and didn't seem able to give me any explanation of the contracts they want me to sign, or details of the umbrella co. She just handed me their phone no.

They seem to want to give the impression that the umbrella co have found a secret way of saving me money which they don't understand, but 'it's something to do with loopholes' ?!

I have also phoned the tax office, who have confirmed that I can claim allowable expenses myself at the end of the tax year by filling out a P87 form. This is what I plan to do now as it seems straighforward enough.

I work for an umbrella company so I am not impartial but there are some very dodgy outfits out there.

There are some really good independent guides top umbrellas and the types of things you should ask before you sign up. I've pasted a few links below.

http://www.contracteye.co.uk/umbrella-company.shtml

http://www.contractorcalculator.co.uk/Umbrellas.aspx

Hope they help.