Yes... Another Umbrella Question

[bennyboy]

Sorry guys... another umbrella question. You must be so sick of these from what I've read lately.

My g/f and I are heading down the ltd company road but while we're shopping around, researching and investigating we're gonna go with an umbrella so we get paid something.

My understanding is that no matter which umbrella you go with you should get about the same net pay. Your total take home should only depend on expenses claimed and accountant fees.

Now we gave 1st Contact and Contractor Umbrella the same scenario:
₤20/hour on a 37.5 hour week with no expenses to claim (for the sake of simplicity)
1st Contract = ₤570 (fees are 5%)
Contractor Umbrella = ₤480 (fees are ₤19.95/week)

WTF?

Now I'm already with Contractor umbrella (this for my g/f) and they've been very open and honest about how they work everything out so I suspect 1st Contact is doing something shifty but I'm not getting a clear answer out of them. If 1st Contact are on the level then obviously their deal looks a whole lot better but we're skeptical.

Any insight you guys can offer into possible reasons for the big discrepancy between the 2 would be great.

Failing that if you could offer some questions to I can put to these companies that will get to the heart of the matter as my questions to them don't seem to be clarifying anything at all.

Once again, cheers for all your help.

Ben

[Sockpuppet]

I wouldnt touch first contact a far as I could throw them.

GO LTD route. I dont pay £20/week for my accountant FFS!

[gravesendboy]

possible reasons

You can ask if any of them are holding back holiday pay( 8 % approx) as I understand holding it back is a legal obligation
I would imagine 1st Contact are giving you additional tax breaks in the form of being out of the house for an x number of hours
Ask them directly

[bennyboy]

Thanks guys.

Sockpuppet the umbrella is just an interim solution while we research and setup a Ltd company. It'll only be for a couple of weeks as we want to actually meet the accountants before signing with them. Does "stay away from 1st Contact" seem to to be an regular theme amongst members here?

Thanks Gravesendboy that's the kind of questions I'm looking for. These accountants don't tell you anything unless you ask the right (and speficic)questions and being new to the game I don't yet know the questions that are important.

Cheers

Ben

[Sockpuppet]

Does "stay away from 1st Contact" seem to to be an regular theme amongst members here?

I phoned them for a quote then they would just not leave me alone! Thier fees are high as well. They wre going to charge me £3k/year as opposed to £1k for accountant.

[Newby]

The difference might be down to the dispensation rates that they have, I have seen them from £10 a day to the ridiculous £24 of P4!!! With 18 pence in the pound tax relief, it wont be solely down to this. So my suggestion is that that the 1st contact model is a limited company with min wage and dividends, the other being a true umbrella. If you are going to be outside of IR35 and run your own company, you may as well be in the same set up in comparison to an umbrella, you could go for a managed limited company solution instead.