Identifying a reputable umbrella company

bugs

I've been offered the option to do some (probably temporary and certainly part-time) work for a company I know and like, but they are not in a position to take on employees right now. They would like to invoice for work done. I understand I could do this through an umbrella company - I do not want to be self-employed or run a company, especially as this might be quite a short-term thing (I currently looking for a full-time role), I just want to pay my taxes like a good citizen and sleep peacefully at night! 

However much of the information on umbrella companies seems to be puffed up content marketing and there are clearly a few cowboys out there too. Is there a good way to identify an umbrella company that will sort out the legal stuff for an acceptable fee/commission - similar to how you might have done working at a temp agency but in this case I've found the contract? Or are there well known names that are generally OK, don't cut corners, etc?

mebu60

What is your rationale for not going the self-employed route? 

DullGreyGuy

Were your client the one demanding it due to IR35 then they'd normally want it to be FCSA accredited to ensure they aren't up to any of the old loan schemes etc and your paying all the taxes etc you should. In principle they should be more upright but it depends if you value that or getting a higher percentage of take home pay. 

Savvy_Sue

mebu60 said:

What is your rationale for not going the self-employed route? 

I second this question: if the company is prepared to take you on directly as a self-employed person, and it is clearly a role which would suit this, then it's quick'n'easy. HMRC will help you work this out: https://www.gov.uk/guidance/check-employment-status-for-tax

Just remember, YOU would be doing the invoicing, and you need to agree an hourly rate above what you'd expect them to pay a direct employee. You'll get no pension contributions, no paid holiday, no paid sick leave. Agree that hourly rate, agree payment terms (ie how fast you expect to be paid after submitting your invoice!) and away you go. 

If your self-employed takings are less than £1lk, you don't need to register as self-employed. If you do need to register, you'll submit a tax return and your tax liability will be worked out as part of that, taking any future employment into account. When you cease self-employment, tell HMRC and you should be able to stop submitting tax returns. 

I would want to check that the reason for not taking on new employees isn't an indication of potential money problems, because you don't want to work for them if they're not going to pay you ... 

bugs

@mebu60 and @Savvy_Sue - thanks for your question re going self-employed. I never plan to be self-employed - I want the simplicity, protections and long-term relationships that come with employment (or possibly a reasonable length contract). I am currently looking for such a role. The opportunity I have been offered is to cover some tasks that are hard, but not impossible, for this organisation to cover - they'd be happy to get them offloaded to someone they know can do them, but they don't anticipate needing this role for more than a couple of months. There is even a possibility that they may have a full-time role further the future, but that is pie in the sky at the moment. In the short term if they worked with an agency, for example, it would be a matter of a phone call to say "can you do a day a week, yes, here's your pay after tax, great bye".

I have looked in to going self-employed in the past and the concept simply makes me feel sick, no matter how many people tell me it's quick and easy and how terribly helpful and supportive HMRC are (sarcasm aimed not at you but at the organisation). I may be mistaken and I realise there are millions of people merrily self-employed but it's not a route I want to go down if I can possibly avoid it. I appreciate my POV makes no sense to a lot of people but it's the way things are - self-employment just sounds like too much trouble and while I'm clearly in a minority I doubt I am the only one.

Sue - that's a fair point about checking for money problems. In this case I'm happy with the situation, I know the individuals involved and that it would be a very unusual circumstance if they couldn't pay me. However, I know I would enjoy the experience of the work - not so much that I would not prefer to be paid for it, of course! - but if I worked several shifts and was not paid, I would still have benefited from the professional/mental challenge and the relationships I would build/keep up.

@DullGreyGuy  that's helpful, thank you - I've seen reference to the FCSA and a number of agencies I have looked at mention this. I am not sure how valuable these organisations/accreditations really but at least it's a bit of a sign post. I definitely value uprightness and everything being done by the book rather than getting the odd percentage here or there - in this case I am looking to build relationships in a sector and keep my CV topped up while I look for a full time role.

redped

Have you had a look at https://www.contractoruk.com yet?  They've got a lot of good info for contractors (which is essentially what you'll be while doing the work), e.g. taking out professional indemnity insurance, etc.

Savvy_Sue

OK bugs, fair comment if it's just not for you. I'd still say, however, that doing a short term spell of work for one company is a very different proposition to setting yourself up for 'proper' self-employment, fulfilling multiple roles for different companies, over the longer term. 

I'd also say that, even thought I don't think you'd need it, you could use the services of an accountant to take the worry away. Hand over your records - money earned - and they'd advise on the allowances you could claim and anything else you needed to do, and what needed to go on your tax return. 

DullGreyGuy

redped said:

Have you had a look at https://www.contractoruk.com yet?  They've got a lot of good info for contractors (which is essentially what you'll be while doing the work), e.g. taking out professional indemnity insurance, etc.

The umbrella company is the one that needs PI insurance as you will be their employee. My personal limited experience of umbrellas is that they are very lax in this area... literally had the owner of one asking how much he'd have to pay me to leave after he found out I wasnt a bricklayer. This is their problem not yours though as a contractor.