Moving from Umbrella to Ltd

**Wanderer** · 18 October 2010, 07:58

Originally posted by karl1984 View Post

My main concern with this is that the Umbrella company have a 30-day notice period written in to my terms of employment with them (my contract with the client is only 5 days)

Give the 5 days notice to the client, the umbrella will see that you are stopping work with the client. If they ask what's going on then tell them that you are taking a few weeks break before you look for a new contract. Do not tell them you are not going to use the umbrella any more. Ignore the restriction in your contract with the umbrella but DON'T tell them about the new contract, it's none of their business.

After the 30 days notice has expired, tell the umbrella that you are "resigning" from working for the umbrella and they will send you a P45.

Get your new LTD set up now. It takes a little while to get bank accounts, VAT, PAYE etc set up. Keep any receipts for setup costs because you can claim them back once your company is formed.

It's easy to go it alone and set up a company yourself, but after about 9 months you end up in a pile of trouble. As you are new to this, I would recommend that you join the PCG as they can sort you out with the necessary indemnity insurance (would have been covered by your umbrella), company formation, company bank account (a few people here recommend Cater Allen) and an accountant who will get you VAT registered (ask about the "VAT Flat Rate Scheme").

Good luck!

**northernladuk** · 18 October 2010, 08:43

Originally posted by karl1984 View Post

Hi All

I have just picked up a new contract (my 2nd ever) and now looking to move from Umbrella to Ltd. My existing contract does not end until end of November however I'm going to give my contracted 5 days notice and then begin work with my new contract.

Picked up your 2nd ever contract but never actually finished your first one is a bit brave? Not for us to comment on your personal situations etc but getting a few good solid contracts under your belt before leaving clients in the lurch would tend to be a good start. I am sure you have good reason and have thought it through but this isn't something I would get in to a habit of doing. It will catch up with you if you carry on.

**karl1984** · 18 October 2010, 09:20

Originally posted by Wanderer View Post

Give the 5 days notice to the client, the umbrella will see that you are stopping work with the client. If they ask what's going on then tell them that you are taking a few weeks break before you look for a new contract. Do not tell them you are not going to use the umbrella any more. Ignore the restriction in your contract with the umbrella but DON'T tell them about the new contract, it's none of their business.

After the 30 days notice has expired, tell the umbrella that you are "resigning" from working for the umbrella and they will send you a P45.

Get your new LTD set up now. It takes a little while to get bank accounts, VAT, PAYE etc set up. Keep any receipts for setup costs because you can claim them back once your company is formed.

It's easy to go it alone and set up a company yourself, but after about 9 months you end up in a pile of trouble. As you are new to this, I would recommend that you join the PCG as they can sort you out with the necessary indemnity insurance (would have been covered by your umbrella), company formation, company bank account (a few people here recommend Cater Allen) and an accountant who will get you VAT registered (ask about the "VAT Flat Rate Scheme").

Good luck!

Thanks Wanderer, great advice and I will certainly not be going it alone at this stage and will be calling upon someone like PCG to help out on company formation/insurance/accountancy etc.

One quick further question, without telling the Umbrella I will no longer be working for them, how do I go about initiating the 30-day notice period? Or does this automatically start upon giving my 5-day notice to the client?

**karl1984** · 18 October 2010, 09:30

Originally posted by northernladuk View Post

Picked up your 2nd ever contract but never actually finished your first one is a bit brave? Not for us to comment on your personal situations etc but getting a few good solid contracts under your belt before leaving clients in the lurch would tend to be a good start. I am sure you have good reason and have thought it through but this isn't something I would get in to a habit of doing. It will catch up with you if you carry on.

Hi - I have quite a good relationship with my current client and have explained as best I can the reasoning for my decision to them. I'm still confident in the future they would re-emply me without question as I have done a very good job for them and worked numerous short extensions on a poor rate. I definitely won't be 'leaving them in the lurch' and that is key to my decision as I completely agree with the point of your posting and certainly don't want to create a reputation.

As for irritating the recruitment agency... their line of vacancies don't provide a match to my skills and losing there opportunities will not affect me too much. Certainly not enough for me to refuse the new contract offer.

**northernladuk** · 18 October 2010, 09:36

Originally posted by karl1984 View Post

Hi - I have quite a good relationship with my current client and have explained as best I can the reasoning for my decision to them. I'm still confident in the future they would re-emply me without question as I have done a very good job for them and worked numerous short extensions on a poor rate.

Sounds ok was just playing devils advocate. There are plenty of guys on the bench out there that can do all the things you mention above and will stick a contract through no matter what. Some clients will call you back, some won't.

Good luck with the new one.

**karl1984** · 18 October 2010, 09:54

Originally posted by northernladuk View Post

Sounds ok was just playing devils advocate. There are plenty of guys on the bench out there that can do all the things you mention above and will stick a contract through no matter what. Some clients will call you back, some won't.

Good luck with the new one.

As a newbie to all of this, I appreciate devils advocate opinions (especially from someone with over 2000+ posts on this forum) as they certainly make you think. Hopefully I have judged my relationship with the client correctly and don't damage it too much. Thanks for the good luck message

**Steven@Parasol** · 18 October 2010, 15:05

My main concern with this is that the Umbrella company have a 30-day notice period written in to my terms of employment with them (my contract with the client is only 5 days) and the following term is also shown -

3.6 You must not, without the written consent of the Company, be in any way directly or indirectly engaged or concerned in any other business or activities where this is, or is likely to be, in conflict with the interests of the Company or a Customer or where this may adversely affect the efficient performance of your duties.

After working my 5-days notice with the client am I free to setup a Ltd company and begin my new contract, without having any problems with the Umbrella's 30-day notice condition? or will I have to work first 25-days of new contract (30-5 day notice period) with my Umbrella and then transfer everything over to Ltd?

Thanks in advance

[/QUOTE]

Hi there

Apologies if this is a stupid point or I've missed something but it is highly unusual for an umbrella company to have a notice period in place such as this. What would happen if your contract was terminated and the umbrella was effectively doing nothing for you? I don't see how they could charge for this?

Under a correctly sturctured umbrella company you should be free to come and go as you please with no penalty such as a leaving fees etc.

There could be 30 day payment terms in place but this would not impact on your new contract or how you manage your business. These are sometimes confused??

**RichardCranium** · 18 October 2010, 15:37

Karl1984,

You say there are 30 days terms in the contract between you and the brolly? And 5 days in the contract between you and the client? That sounds all wrong. Because you don't have a contract with the client.

1) There is a contract between the client and the agency. You are unlikely ever to see this.

2) There is a contract between the agency and your brolly. This is your contract. Its terms need not be the same as those in 1). You were probably sent a copy of this at the start of the contract; it is signed by the brolly rather than you. If you had been using a LtdCo, you would have signed it as a Director of your LtdCo.

3) There is a contract between your brolly and you. This describes what the brolly does for you, and what you must do for them. The brolly should also make available a copy of the contract 2) for your information.

Q. Was this brolly imposed - or very strongly recommended - on you by the agency, by any chance? (I bet it was.)

Q. Are you sure you have not got the contracts mixed up?

If the contract between the brolly & you has 30 days terms, you've been had. Name and shame!

**karl1984** · 18 October 2010, 16:03

Originally posted by RichardCranium View Post

Karl1984,

You say there are 30 days terms in the contract between you and the brolly? And 5 days in the contract between you and the client? That sounds all wrong. Because you don't have a contract with the client.

1) There is a contract between the client and the agency. You are unlikely ever to see this.

2) There is a contract between the agency and your brolly. This is your contract. Its terms need not be the same as those in 1). You were probably sent a copy of this at the start of the contract; it is signed by the brolly rather than you. If you had been using a LtdCo, you would have signed it as a Director of your LtdCo.

3) There is a contract between your brolly and you. This describes what the brolly does for you, and what you must do for them. The brolly should also make available a copy of the contract 2) for your information.

Q. Was this brolly imposed - or very strongly recommended - on you by the agency, by any chance? (I bet it was.)

Q. Are you sure you have not got the contracts mixed up?

If the contract between the brolly & you has 30 days terms, you've been had. Name and shame!

Before I name and shame I'll try to explain this better to ensure I'm not getting things mixed up...

Ok, when I have accepted the assignment on the Umbrella website it contained the following 'Employee Assignment Notice Period - 5 days' and I had to electronically accept this assignment (and have had to accept it upon each retention I've signed).

However, within the Terms & Conditions under the HR section there is the following. I only had to accept the Terms & Conditions once and that was upon sign up with the Umbrella company -

16.1 This contract of employment is terminable by you on giving the Company one month’s notice in writing, except where you serve notice to terminate your employment during an Assignment, and the notice required under that Assignment is longer than one month, in which case you must give the longer period of notice.

Moving from Umbrella to Ltd