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  1. #1

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    Default Advice on using an umbrella company for first time (& query about why contract with u

    I have been offered a contract with a university client.

    I was told that the contract would fall under IR35 and they would try to get me a higher gross rate to cover the difference (normally I run contracts through my ltd company).

    The final rate agreed was 500/day. The take home pay from this was calculated at roughly 285/day.

    Their recommended umbrella company is Mangopay - but they mentioned I could choose any I wished.

    They said that it would be easy to set up - and I had a quick chat with Mangopay.

    Does anyone have any experience with them and know if they are good and trustworthy?

    I am also wondering why the contract should fall under IR35.

    I don't know why a university would be affected by the recent changes since, legally speaking, they are private institutions (even if they receive lots of state funding). I couldn't get a clear answer and didn't want to press it since I am happy to lose some money and err on the side of caution for this gig.

    The main reason for asking is to know whether I should expect to have to work through umbrella companies when working with universities in the future.

    Also:

    Should I push to use an umbrella company of my own choosing / one that one of you can recommend here?
    How can I check the calculations that the agency has given me to work out take-home pay?
    Is there anything else I should be looking out for before choosing an umbrella company?

    Thanks.

  2. #2
    eek
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    Universities are subject to the freedom of information act and hence are impacted by the public sector IR35 rules

    Can't see much wrong with mongopay at a quick glance of their website. The only reason for moving elsewhere would be if you want to put a lot into a pension...
    merely at clientco for the entertainment

  3. #3

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    Go with Contractor Umbrella. No brainer. Kosher umbrella used by people on here and the MD (Lucy) posts on here regularly. They have a good pension scheme in to which you can put as much as you want in to minimise your tax bills.

    No brainer.
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    Quote Originally Posted by northernladuk View Post
    ...They have a good pension scheme in to which you can put as much as you want in to minimise your tax bills. ...
    Up to the annual 40k limit to take advantage of the tax relief. Though can carry forward up to previous three years allowance if not already fully used up.

    Plus, if I'm understanding it right, doing it via this route (umbrella salary sacrifice rather than personal contribs) the contrib is made prior to tax so automatically includes the tax relief amount, so no need to reclaim relief if in higher tax bracket which should simplify the self assessment paperwork.
    Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

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    eek
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    Not quite you still need to pay yourself living wage and the taxes related to that but anything after that and their fees can be sent direct to your pension. After that you can use this years allowance followed by the oldest not used allowance..
    Last edited by eek; 8th July 2017 at 08:50.
    merely at clientco for the entertainment

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    Quote Originally Posted by eek View Post
    No need to reclaim and you also get the NI side of things which is upto 25% once you factor both Employers and Employees NI..
    Yep, that's what I was inferring but worth making clear for anyone weighing it all up.

    Though how the government will screw up pensions for us when we come to retire I am dubious about putting too much into that particular basket. Seen an article on ThisIsMoney (sister site to the daily mail ) where a university bod has suggested means testing pensions, so the incentive to save at all just keeps getting reduced while general savings rates are already below inflation. Still, contibs via an umbrella are a known advantage, and can only base future plans on current known rules.
    Last edited by Hobosapien; 8th July 2017 at 08:54. Reason: Yes living wage taken out first then rest can be dealt with how you choose.
    Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

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    Thanks for all the responses. I'll definitely check out Contractor Umbrella. Not sure about pensions - up until now I've been saving up to buy property as security.

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    Quote Originally Posted by ginjar View Post
    Thanks for all the responses. I'll definitely check out Contractor Umbrella. Not sure about pensions - up until now I've been saving up to buy property as security.
    Makes sense but for a short(ish) term gig tax efficiency might be a better way to go.
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    More time posting than coding

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    Quote Originally Posted by ginjar View Post
    Thanks for all the responses. I'll definitely check out Contractor Umbrella.
    Hi ginjar - if you want to call, I am more than happy to talk through things with you
    Just watching what I say

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    Quote Originally Posted by ginjar View Post
    I have been offered a contract with a university client.

    I was told that the contract would fall under IR35 and they would try to get me a higher gross rate to cover the difference (normally I run contracts through my ltd company).

    The final rate agreed was 500/day. The take home pay from this was calculated at roughly 285/day.

    Their recommended umbrella company is Mangopay - but they mentioned I could choose any I wished.

    They said that it would be easy to set up - and I had a quick chat with Mangopay.

    Does anyone have any experience with them and know if they are good and trustworthy?

    I am also wondering why the contract should fall under IR35.

    I don't know why a university would be affected by the recent changes since, legally speaking, they are private institutions (even if they receive lots of state funding). I couldn't get a clear answer and didn't want to press it since I am happy to lose some money and err on the side of caution for this gig.

    The main reason for asking is to know whether I should expect to have to work through umbrella companies when working with universities in the future.

    Also:

    Should I push to use an umbrella company of my own choosing / one that one of you can recommend here?
    How can I check the calculations that the agency has given me to work out take-home pay?
    Is there anything else I should be looking out for before choosing an umbrella company?

    Thanks.
    Happy to help if necessary? - we help contractors looking to use Umbrellas or Limited companies, so have all bases covered.

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