UCFinance - helping IR35 status allegedly...

[Maslins]

I can't stand people using letters or shortened letters like 'u' instead of you in company/website names personally either.

I agree northernladunitedkingdom

Am surprised QDOS are involved (or 'in partnership with')

Me too...and FreeAgent. I don't have anything against UCFinance, but I can't understand the need for it and feel it's just another Wonga but marketed appealingly to contractors. The claim re IR35 is particularly irritating...not sure if they genuinely believe it themselves.

Also, can't see an APR on the site. Did a test case with £300/day, monthly timesheet paid 30 days after submission which they work out to be 2.27% interest/month. Extrapolate that over a year gives (if my calcs correct) ~31%...so admittedly much lower than most payday loans, but far higher than a personal loan rate for someone with an average credit rating...

...plus I note that quote is after 20% corporation tax relief. Is that even legal? You don't get Dell or SJD quoting prices after assumed CT savings...the more I look into it the more it irks me.

[cojak]

I still don't understand it - is it a loan to carry you over between invoice and payment?

How crap do you have to be at managing your business to need this kind of thing?

[Alan @ BroomeAffinity]

With regards to the IR35 issue, for me, there is so much focus on this and so much concern and fear around 'am I self-employed or aren't I?', and possibly more importantly - 'what will HMRC think?', at last there is some positive news. Don't get me wrong, we're not suggesting that this will be a decisive factor, however a contractor paying for his own business finance is one of those smaller things, but they all add up!

??? Shouldn't that read "there's so much concern and fear around 'am I self-employed or aren't I?' that we thought we take advantage of it and tag our completely unrelated business on to it in the hope of snaring some gullible contractors"?

I can just about see the point in this service if, for example a new contractor is paid monthly and is on 60-day terms and that's all very well and good but to say it "enhances your IR35" whatever that means, is nonsense.

[LisaContractorUmbrella]

Hi all

I'm Joanna from UC Finance - I thought I'd jump on here to see if I can answer any queries being chatted about in this thread.

With regards to the IR35 issue, for me, there is so much focus on this and so much concern and fear around 'am I self-employed or aren't I?', and possibly more importantly - 'what will HMRC think?', at last there is some positive news. Don't get me wrong, we're not suggesting that this will be a decisive factor, however a contractor paying for his own business finance is one of those smaller things, but they all add up!

We appreciate that this type of finance isn't for everybody, but we have many clients who do find all of our services very helpful.

On the matter of cost - we've specifically set this up to be in line with, if not cheaper than, traditional forms of bank lending.

I don't want to ramble on too much here, but if there are any queries at all I'll do my best to respond.

Welcome Joanna

Can you confirm that this is a basic factoring service whereby the invoices are purchased from the contractor at a price less than face value to improve their cash flow e.g. you will give them 95% of invoice value immediately and you will then receive payment of the invoice day 60?

[psychocandy]

I still don't understand it - is it a loan to carry you over between invoice and payment?

How crap do you have to be at managing your business to need this kind of thing?

Yes dear. ;-)

[psychocandy]

From what I understood, dont you get it paid to you weekly? i.e. they pay 95% of it to you split over however many weeks until they then get the 95% of the invoice.

Sounds like a lot of hassle/cost to me just to get your money up front. Surely no-ones that desperate?

[psychocandy]

Hi all

I'm Joanna from UC Finance - I thought I'd jump on here to see if I can answer any queries being chatted about in this thread.

With regards to the IR35 issue, for me, there is so much focus on this and so much concern and fear around 'am I self-employed or aren't I?', and possibly more importantly - 'what will HMRC think?', at last there is some positive news. Don't get me wrong, we're not suggesting that this will be a decisive factor, however a contractor paying for his own business finance is one of those smaller things, but they all add up!

We appreciate that this type of finance isn't for everybody, but we have many clients who do find all of our services very helpful.

On the matter of cost - we've specifically set this up to be in line with, if not cheaper than, traditional forms of bank lending.

I don't want to ramble on too much here, but if there are any queries at all I'll do my best to respond.

Hi Joanna. First off fair does for coming on here and facing people....

I can see how it might be useful for some people. After all as someone pointed out it appears cheaper than a payday loan at least. If people are happy with this then good luck to you...

The IR35 thing is a little bit naughty though. How is the contractor taking a financial risk here? Surely they're not but you are by paying out in advance of invoice payment?

[northernladuk]

The IR35 thing is a little bit naughty though. How is the contractor taking a financial risk here? Surely they're not but you are by paying out in advance of invoice payment?

Isn't the risk the fact you are taking a loan out against invoices that haven't and might not get paid. So you are taking on a financial burden when the method or repayment might fail. That is all I can think of.

[Nathan SJD Accountancy]

Isn't the risk the fact you are taking a loan out against invoices that haven't and might not get paid. So you are taking on a financial burden when the method or repayment might fail. That is all I can think of.

That's what I was thinking. They are most likely able to recall part or all of the money from the contractor in the event funds are not received. Otherwise, the risk would lie with them and not the contractor.

[JoannaUCF]

Welcome Joanna

Can you confirm that this is a basic factoring service whereby the invoices are purchased from the contractor at a price less than face value to improve their cash flow e.g. you will give them 95% of invoice value immediately and you will then receive payment of the invoice day 60?

Thanks Lisa, great question!

You’re right - our service is built on the basic principles of invoice finance. What makes us different though is that rather than funding invoices we’ve taken it a step back and, uniquely, can fund timesheets. Many of our clients are new to contracting, having made the transition from PAYE, and some have come from Umbrellas – they may not have been able to make this move if they hadn’t had access to cash. They are by no means desperate people – they just need finance to bridge the two or three months time period between first week worked, and invoice being paid.

This is a business service, as opposed to a ‘personal lend’ – again, unlike traditional invoice financiers, we undertake business admin too, right from valuable credit checks of prospective new agents/clients, to raising invoices and full collections.

Hope that answers your question?
Joanna