First time contractor - advice please!

[Nut]

Hi,

I'm looking to go contractor for the first time, so i'm looking into all this umbrella company lark.

I've been tempted by Excellium. £15 per timesheet sounds good and they seem to have good reviews. Has anyone here used them?

After discussing with them on the phone, my return looks like 64.7% . This is with all the taxes & claiming for mileage.

Is there any way to improve this through an umbrella company? (Would prefer this than doing my own accountancy etc.) I've seen sites like more-pay.com which are stating up to 90% return. Is this legal/legit? Is this kind of thing worth going for over a regular umbrella company? I'm very sceptical.

Any advice appreciated, like I said i've never done contracting before so this is my first time looking into it.

Many thanks
Simon

[RichardCranium]

Hi,

I'm looking to go contractor for the first time

Exciting, innit?

so I'm looking into all this umbrella company lark.

Which suggests you have already done some research and decided you want to start out with a brolly rather than going straight into using a LtdCo. Many would suggest the latter, but it is your call whether you want the high dive into the deep end or the paddling pool first. You can switch from one to the other during a contract without too much pain anyway.

After discussing with them on the phone, my return looks like 64.7% . This is with all the taxes & claiming for mileage.

Sounds sort of right. The %age varies according to your rate and how much expenses you'll be charging but yes, it is only about 2/3rds.

Is there any way to improve this through an umbrella company?

Make sure you get your receipts and claim for everything you legitimately can. It won't improve much.

Or, claim for stuff you're not entitled to claim for and hope the tax man does not come sniffing. Which is his job, of course.

I've seen sites like more-pay.com which are stating up to 90% return. Is this legal/legit? Is this kind of thing worth going for over a regular umbrella company? I'm very sceptical.

Is your sleep important to you? If not, go with one of these 90%+ companies but put about 30% of your income away in a savings account and do not touch it for 7 years. After seven years you can start taking it out knowing you have got away with it. Actually, make it more like 40% to cover the penalties and interest and accountant's and possible solicitor's fees.

Or just stay within what the normal brollies tell you to do, take home much less money, but sleep nights knowing Hector can't touch you.

Your choice.

But remember: who is taking the risk? You, or the faceless (overseas?) company taking the commission?

Any advice appreciated, like I said I've never done contracting before so this is my first time looking into it.

Since you're doing research, you should be fine.

Have you spotted the links over there on the right? ------->

(Many don't!)

(No, not the huge 'monday links', near the top, the "CUK Navigation", "First Timers" & "Contractor Guides" links.)

[Nut]

Thanks very much for the information.

After a phone call this evening, i'm really tempted by w ww.amlimited.co.uk -AML - Retain up to 90% of your contract value with our Umbrella Company alternatives[/url] . Apparently it's fully legit since it is disclosed to HMRC, but the downside is the methods it uses are usually open for a few years then when the loophole is closed you either need to move onto a new product or go under a regular brolly/ltd company etc. I did ask if I were to go with this method if there is a chance HMRC could claw tax back but they said no, only after the loophole is closed then anything after that can be subject to new taxes. Is this correct?

Has anyone here used this firm?

In addition, I understand there are firms there who can assist setting up a limited company and effectively manage it for me for a monthly fee. Can anyone recommend a place whose fees are reasonable and are easy to work with? I'm not planning on employing anyone else, just myself, so if there is a firm who provides maximum support for someone to go down this route i'd definitely be interested.

[RichardCranium]

Is this correct?

"Even better, we take away all the hassle of being self employed or working through a PAYE umbrella structure!"

Our people have full contracts of employment, with PAYE and NIC applied, where appropriate. AML employees receive a combination of salary and discretionary employee awards.

When I was a permie I frequently got performance bonuses and payment awards for excellent work. ALL of them went through the payroll.

I would expect what will happen is the tax man will tell you in 2015 you owe a shedload of tax and it is YOUR responsibility to pay it + penalties + interest.

Good luck.

[Nut]

Fair enough, thanks.

I think what i'll do is stick with the normal umbrella company. Thing is they all promise so many different things and give different results on their calculators, it's hard to tell which ones are decent.

Have you used Excellium or Go Umbrella?

thanks

[RichardCranium]

Tel: 0800 988 8111 Fax: 0870 0818112 Company Reg No: 115239C VAT No: 002484707

© Copyright 2011 AM Limited - an employment service and an alternative to a contractor umbrella company.

Company number 115239C - not known at Companies House
Company name AM Limited - not known at Companies House

So it is not a UK registered company.

Address:-
AM Limited
Knox House
16-18 Finch Road
Douglas
IM1 2PT

Aha! A Manx company.

My understanding is that when you live in the UK and work in the UK, Hector the tax man expects you pay UK taxes. I don't see how what AM Limited are implying might work.

But I am neither an accountant, nor a tax lawyer.

[RichardCranium]

I think what I'll do is stick with the normal umbrella company. Thing is they all promise so many different things and give different results on their calculators, it's hard to tell which ones are decent.

From one of the links on the right:

Best Umbrella Company of 2010

WINNER! Giant group
Personal and efficient service, clear communication, ease-of-use online
Consistently professional approach to answering queries and solving issues
Sound understanding of contracting

RUNNER UP: Contractor Umbrella
Always reliable, available and personable
Makes the work and payment process easy to understand
Comprehensive knowledge from support staff

RUNNER UP: Parasol
Excellent service, always paid on time

Make of that list what you will.

The differences are:
- how much they charge;
- how much time between submitting timesheets and the money appearing in your account;
- paper or electronic or on-line filing of expenses;
- the level of support.

The rules about what you can and cannot claim are the same between of all of them, despite them all saying or implying otherwise.

[Tomo1971]

I've seen sites like more-pay.com which are stating up to 90% return. Is this legal/legit? Is this kind of thing worth going for over a regular umbrella company? I'm very sceptical.

Is that likely to be an EBT scheme?

Im just out of one, am a tad nervous about the future consequences even though the accountant that put me in touch with the scheme says its bullet proof (at least it was before the 9th December 2010, it got somewhat flakey then), so we will wait and see.

Anyhow, why not go LTD Co? I have just done it, signed up with InTouch who advertise on here.

Steve

[LisaContractorUmbrella]

Fair enough, thanks.

I think what i'll do is stick with the normal umbrella company. Thing is they all promise so many different things and give different results on their calculators, it's hard to tell which ones are decent.

Have you used Excellium or Go Umbrella?

thanks

Umbrella companies can 'promise' many things but there are only certain things that we can, within existing legislation, deliver. All umbrella companies operate PAYE and the tax and NI that you pay are worked out using calculations provided by HMR&C; they will process expenses but only those which are allowable by HMR&C. Therefore you return through ANY brolly should be exactly the same as any other - the only difference should be their fee. What will vary is levels of service.

HTH

[Vito]

My accountant (Darren Upton from Upton & Co) gave me some advice on here which made me choose him and it's stuck with me whenever I've considered being more tax efficient than maybe I should...

...a load of money can buy you a nice bed, but it won't buy you a good nights sleep...

Probably quoted it slightly wrong, but the message is clear and worth remembering!