Urgent-Started agency job-turns out to be an umbrella company

lindseykim13

So applied for loads of agency jobs after loosing my temp contract elsewhere, desperate to stay in work I took the first temping one that came up and was offered to start right away. Having done a days work (today) get home to an email from some umbrella company telling me to send a load of info over and agree to stay with that company and I have to give a weeks notice ect ect for me to get paid. I thought I was just doing normal agency work (the type where they can drop you like a hat and you can do the same to them if something better comes up)

I only took this temp job as a stop gap until something closer to home came up. I now have a couple more offers on the plate for next week. I'm not sure what to do with regards to even going into work tomorrow if this umbrella company aren't going to pay me anyway unless I sign their contract? Anyone any experience of only doing a weeks work under an umbrella?
I never even knew about them until tonight but I understand they take a nice chunk.
I want to quit but also want my wages, uncertain about if I fill out these forms i'm committed to something I can't get out of.:(

LisaContractorUmbrella

An umbrella company becomes your employer and is responsible for paying your salary through PAYE. They will enter into a business to business contract with the recruitment agency and into a contract of employment with you. The contract rate will be invoiced to the recruitment agency for the work that you have done and the umbrella company will then pay you when they receive payment for that invoice. As an employer they will have to pay employer's national insurance from those funds received and they will also retain a margin for their services; the balance is your salary and is subject to deductions for employees national insurance and income tax.

Recruitment agencies are not permitted to work with sole traders and so have the options of taking workers onto their own books, referring them to an umbrella company or working with the individual's Limited Company.

HTH - there's some more info here http://www.contractorumbrella.com/why_umbrella.html

patman99

op didn't state s/he was a sole trader. LindseyKim, I would suggest talking to the Agency and asking them why they want you to work through an umbrella company (other than to allow them to avoid paying you holiday pay).

If you need to use an umbrella company, then they can usually put 'work-arounds' in place to drastically reduce your Tax liabilities, such as getting you to send your mobile bill, fuel/running cost of vehicle etc. They then pay these as 'expenses', thus Tax-free.

PhillipVenn

You are not obliged to use the specific umbrella company that the agency has proposed, there are plenty out there of which a small percentage operate compliantly.

It is important that you understand that by submitting expenses wholly, exclusively and necessarily in the course of undertaking your temporary assignment, that you obtain tax relief on those expenses, NOT re-imbursement of them (unless the agency and client have agreed to re-imburse you).

Ordinarilly you will be better off at a net pay level than if you were paid PAYE by the agency, even after the umbrella company has deducted their margin, which covers the overheads associated with running the administration operation.

If you require any further assistance in understanding the benefits, contact Liquid Friday on 0800 316 6030 to talk it through with an advisor.