Umbrella companies! Any advice - ASAP?

bradsmith999

Hi been offered a position and need to sign up to an umbrella company, any recommendations?

Working from home, trying to find the best take home pay.

Previously used PAYSTREAM in the past, any other recommendations? PAYSTREAM seem to offer a good take home pay , it varies £10-20 per week in the online calculator estimations.

Any advice would be appreciated.

Sandtree

The only variance in take home money will be their fee... unless you find a tiny one that doesnt have to pay the apprentice levy

Using their calculators you will see much bigger differences because they all make different assumptions about how many days/hours you will work, if you are a high earner  they vary on how they apply the loss of personal allowance etc but that all disappears when you get into the real world of working for them because all the actual calcs are as per HMRC and not something they can make up or get choices about.

Personally I'd look at one that your agency has experience of working with... you dont want them having to set up new processes etc. Once you've looked at their fees then also look at things like cut off times. You dont get paid until they get paid but most will be same day for payments received by 4pm though some have earlier cut offs or may be different on Fridays etc.

I've used Workr in the past but went with them because they were the least worse and their calculators were able to get closest to reality. One other one I looked at tried to convince me that I would better off working less days because my tax bill would be lower and another gave a massively higher take home pay and only after a lot of quizing admitted because their calculator didnt factor in the loss of personal allowance and that the extra would be repaid to HMRC via tax return

bradsmith999

Some umbrella companies quote £120 more a week , they email you a quote but I am not sure if it is real.

I checked Workr and it seems closer to reality. How does expenses work also if I need equipment for home working? I assume you don't get paid holiday pay if its contract.

Marcon

bradsmith999 said:

Some umbrella companies quote £120 more a week , they email you a quote but I am not sure if it is real.

I checked Workr and it seems closer to reality. How does expenses work also if I need equipment for home working? I assume you don't get paid holiday pay if its contract.

There's a really good explanation of what umbrella companies are/how they work here: https://www.litrg.org.uk/sites/default/files/files/LITRG-Factsheet-working-through-an-umbrella-company.pdf

WolverineSW11

Be wary of most umbrella companies. 
I was paid through one, they deducted the employers NIC out of my wages with no 'uptake' to my wages from the agency, thus I was paying mine and employers NIC's. Am currently trying to find a way to claw all the money back (£6K+).
Check this page out: Can umbrella companies deduct employer’s NI lawfully? (contractorcalculator.co.uk)

Sandtree

WolverineSW11 said:

Be wary of most umbrella companies. 
I was paid through one, they deducted the employers NIC out of my wages with no 'uptake' to my wages from the agency, thus I was paying mine and employers NIC's. Am currently trying to find a way to claw all the money back (£6K+).
Check this page out: Can umbrella companies deduct employer’s NI lawfully? (contractorcalculator.co.uk)

Thats how it should work... if you are being paid £200 a day that has to cover all costs which includes employers NI

bradsmith999 said:

Some umbrella companies quote £120 more a week , they email you a quote but I am not sure if it is real.

I checked Workr and it seems closer to reality. How does expenses work also if I need equipment for home working? I assume you don't get paid holiday pay if its contract.

Holiday you have two options, you either make a salary sacrifice and then get paid holiday and get the residual at year end if you havent taken it all or you dont make the sacrifice and holiday it unpaid.

All expenses I;ve had were for travel where the client had agreed to reimburse and so it was straight forward. I've had the facilities for home working for 15 plus years so no need to investigate if the umbrella will allow you to sacrifice income to claim it as an expense... the issue if they do then technically whatever kit you've bought is technically the umbrellas but I am sure thats not an insurmountable issue to resolve unless you are talking buying a new Mac Pro or something

biscan25

Umbrellas are in general relatively similar.

Just look out for: the headline fee(margin), should be around 15-£20 a week.
Ability to salary sacrifice into a pension, this will save NI (yours and employers). Some charge a separate fee for this, so make sure you ask.
Don't fall for any promises about increasing take home pay schemes, these are not allowed and HMRC will get you.
Your choice of umbrella may be restricted by the agency, ask them.
I use Fore:two group. Tick all the boxes above and actually answer the phone too!