Which umbrella company after April changes?

[SoupDragon]

To be fair, Prosperity4 do explicitly state that the IR will come after them and not you if there is a problem with the expenses... not that I would touch them with a barge pole.

[Newby]

Alright Mal, dimbo here.

If a permanent employee were to be granted expenses incorrectly, and this was brought up in a PAYE audit, who gets it in the neck? The employee or the employer?

[malvolio]

The employee, for making a false claim. You are solely responsible for correctly declaring your income to the Revenue, that's one of the basic tenets of tax law.

[LisaContractorUmbrella]

Agreed Malvolio. If you claim expenses for costs that you have not incurred and cannot prove it will not be your umbrella company that gets in trouble it will be you. Never believe a company that tells you will no have liability from a false claim it is simply not true. You cannot claim expenses without receipts and you cannot claim for costs you have not incurred. This is an extract from a letter we had from the Inland Revenue clarifying the position:

"I can confirm that contractors cannot automatically claim £21 per day (or any other amount) for each day they are at work. It is also worth saying the Inland Revenue would not give general approval of a company's expenses policy. A dispensation would never cover large amounts of unsupported expenditure"

[Chugnut]

Not that I'm in this particular boat gladly, but I still find it incredulous that the promoters of these ridiculous expense allowances are not at least somewhat accountable, at least for fraudulent advertising. It was clearly pushed as a concept to harvest clients. Talk about biting the hand that feeds...

[malvolio]

Never understimate the stupidity of greedy people...

[farazfastian]

Limited is better...

well well well... first of all thank you all of investing your time in clearing lots of hidden things regarding umbrella companies, I was doing my research as well and can say that most of you are correct. This is what i've found out after doing my research, replies from you guys and talking to some umbrella companies

- That's true every umbrella company(UCs) have different dispensation policy(i.e. they manipulate it as a marketing strategy), dont trust them, its your responsibility to find out that everything is according to Inland Revenue

- Normally UCs charges 60-100 pound per month as thier charges and some charges as % as well but i believe that they save something in Employers NI contribution as well

- The rule of thumb is no matter what dispensation you setup with your UC, you should keep all the receipts of the expenses incurred that means there's no way you can claim false expenses to increae your take home

- Last but not least, I've seen few examples where people faced trouble with UCs in getting salaries on time, claiming right expenses and even in getting proper gross/breakup on your payslips, sometimes even they dont provide the right documentation when you need it

So after analyzing everything regarding UCs i think its more risky in going for UCs and its better to go for Limited Company option atleast things will be in your hand and you can play safe. I'll post a separate thread for questions related to Limited company and hope you guys will reply to me. Many Thanks

Regards
Faraz