Opting in or out with an umbrella?

[mickey]

I am being strongly encouraged to opt out by one of the largest umbrella groups.

They have stated that:

1. Admin cost of opting in is higher for them and my net pay may be lower. On the phone that said the opt/in out does not affect the net pay. Who is right?

2. Once opted out can only opt in at the start of next assignment. I thought the regulation allows opting in at any time? Who is right?

3. If I choose to opt in the umbrella will require (a) verify my qualifications (b) obtain 2 references. True / false? Sounds like a bit of hassle. Who pays for this?

4. Why would I want to opt out at all?

Overall, having read this forum I find the whole concept of opting out while working for an umbrella odd...

On the flip side, what are the downsides of opting out? What are the scenarios where you'd think duh, I should have opted in...

Any thoughts?

[mickey]

Anyone?

[Craig at Nixon Williams]

There's some great posts on this sticky about opting out: http://forums.contractoruk.com/busin...-2003-act.html

[mickey]

Thank you. I understand opting in is generally a good idea while working through an umbrella.

What are the risks of opting out though?

[LisaContractorUmbrella]

There is no way that your umbrella company should be penalising you financially if you decide that you want to opt-in and you may be opted-in by default anyway - have a read through the sticky that Craig mentioned.

[mickey]

Thank you. The sticky mainly talks of a Ltd situation with the last few posts on an umbrella situation.

I get the gist though.

What I don't quite get is the downsides of opting out

What would I stand to lose?

[TheFaQQer]

2. Once opted out can only opt in at the start of next assignment. I thought the regulation allows opting in at any time? Who is right?

Both of you.

You can change the opt in / out status at any time, but you need to do this as both the individual and the employer - so you may be right that you can change your status mind-contract, but if the umbrella won't do the same it's a moot point.

IIRC, you can change the status at any point, but it only takes effect from the next contract / renewal.

3. If I choose to opt in the umbrella will require (a) verify my qualifications (b) obtain 2 references. True / false? Sounds like a bit of hassle. Who pays for this?

Partly true. They need to verify that everything that you have told the client (usually in the form of your CV) is correct, so someone needs to do the checking. Usually, this is something that the agency does, but I've never worked via an umbrella so don't know who does this. I wouldn't expect to be paying for someone else to do their job as dictated by the law, though.

4. Why would I want to opt out at all?

As an umbrella employee, I can't understand why you would (even less than I understand why you would opt out if you were via a limited company). The main agency argument lie is that if you opt out it helps your IR35 position. Since that's irrelevant, I wouldn't opt out.

[mickey]

Thank you F