Starting Contracting - In need of serious help!

[Nutmegg]

To cut a long story short, I completed my apprenticeship gained some experience and the company folded up, making me redundant.

Some of the guys I used to work with originally did sub-contracting, and have gone back to it while bringing me into it.

We've been offered a contract by a agency, where-as the other guys have all gone Limited Company's, this is something I really rather no peruse especially because this is not a long-term goal, more something to get through Christmas months and company's will be recruiting to go back on the cards.

For this agency to pay me, they got their umbrella company to contact me and set me up.

They want to use a 'Employee Loan Agreement' & 'Employee Contract Agreement'

The contract agreement state's I'll be paid £50 a day (Minimum wage) and the rest will be paid via a bonus?

I really don't understand how any of this work's, especially the loan agreement what seem's to dodgy as hell! The umbrella company is called "BESTPAY"

I would really appreciate some help, I've tried looking up and researching the best I can but I never really understand what people are talking about.

[malvolio]

Walk away. Very quickly.

Go with Contractor Umbrella, or some other legitimate umbrella. Expect to keep 65% or so of your day rate at most. To do anything else is foolish in the extreme.

And for future reference the tax doesn't disappear, it is merely deferred - usually to a point where you can no longer afford to pay it...

[cojak]

DO NOT DO THIS!

Contact a reputable umbrella. Lisa from Contractor Umbrella will be able to help you.

View Profile: LisaContractorUmbrella - Contractor UK Bulletin Board

Contact her ASAP.

And then read this.
http://forums.contractoruk.com/hmrc-...following.html

[northernladuk]

What all the others said.. and in capitals...

That aside, how much experience are we talking here?

I do believe contracting too early can be real issue and can easily constrict you to lower roles and never get to achieve levels you could if you stayed permie awhile. I always think contractors should become as good as they can be and then go out and ply their trade at the best rate possible. You've got 40 odd years of work ahead of you and you are starting off on the lowest possible rung. It's going to be a long hard slog to get to where you could possibly be.

[Pherlopolus]

What all the others said.. and in capitals...

That aside, how much experience are we talking here?

I do believe contracting too early can be real issue and can easily constrict you to lower roles and never get to achieve levels you could if you stayed permie awhile. I always think contractors should become as good as they can be and then go out and ply their trade at the best rate possible. You've got 40 odd years of work ahead of you and you are starting off on the lowest possible rung. It's going to be a long hard slog to get to where you could possibly be.

Totally agree, I went contracting after 3 years in mainframe ops. seemed to be stranded at the "doing" end rather than the "thinking" end after 10 years. Took a permie job for 11 years and now contracting at the thinking end, which would have been impossible before.

[TykeMerc]

What they've all said AVOID, AVOID, AVOID, run like hell from that sort of scheme.

There are genuine Umbrellas that (assuming the agents will deal with them) will provide a sensible payroll service with no risk of scheme involvement.
If the agency won't deal with them and it's Ltd or nothing then that's a difficult place to be as you're only looking to contract as a stopgap.

[LisaContractorUmbrella]

I did hear a rumour last week that the company the OP mentioned has gone or is on the verge of going down the tubes - a contractor had contacted us as he needed to find another umbrella company as the company in question weren't making payments any more. True or not companies offering loan schemes of this sort will take you down a very nasty and painful road that has HMRC waiting at the end of it.

Thanks guys for the recommendations and if the OP wants a chat about how we work it's lisa@contractorumbrella.com or call 01206 761326

[aoxomoxoa]

Kudos to the OP for stopping to think, and for having the nous to get on this forum to seek advice.

Good luck!

[Nutmegg]

Can I say thank you to everyone. This has been worrying me, I really rather just pay any tax owed rather than trying to exploit a rather stupid loop-holes, my experience is only short, I've only been in the game for 3 odd year's but it's something to keep me playing rather than sitting at home hoping something come's up I'm rather lucky my old colleges took me under there wing and let me work with them as we're going as team.

I've made a appointment to see an accountant tomorrow anyway as I really wanted to seek professional help and someone to help me get my head around all the law's ect.

He recommended over the phone becoming a Limited Company is usually the best route, but this being a short term thing for me I'm reluctant to go through all the loop-holes required essentially and hopefully only a few months where I can join exciting new program's with established company's.

Can I use any umbrella company or does the agency have to aprove it as well? I really have such a small understanding of the contracting side, especially starting as a apprentice contracted to the company.

Thanks for everyone's help I'm really glad I never signed them agreements.

[cojak]

Speak to Lisa. She'll help and won't pressure you into using her company.

Good luck!