how to safely ditch my umbrella?

**scooby** · 15 April 2008, 13:45

Originally posted by lambrini_socialist View Post

hello all, long time lurker, first time poster.

i've set up my Ltd, chosen my accountants, am waiting for my VAT reg etc. i have a contract with a client which has been running for a while (and looks set to run for at least another few months), i'm currently with Parasol - and i want to switch to using MyCo ASAP. does anyone have any advice for switching mid-contract from an umbrella to a Ltd - i.e. is there anything i should watch out for?

my agency say it's no problem (except my new terms will be 30 day invoice payments rather than 14, ho hum) but i just wanted to tap the wisdom here in case there's any way i can get burned either by the agency or the umbrella.

cheers!

my previous agency allowed me to change mid-contract. it was done as an early termination to allow me to get away from Parasol and a new contract setup for me. i then told Parasol i would be taking some time on the bench, and as soon final payments to me had been paid closed my account.

it was easy. i just made sure i was paid in full by them before saying anything about closing. there is nothing wrong or illegal in this approach. it is just managng risk.

**NotAllThere** · 15 April 2008, 16:19

Originally posted by lambrini_socialist View Post

...except my new terms will be 30 day invoice payments rather than 14, ho hum) but i just wanted to tap the wisdom here in case there's any way i can get burned either by the agency...

Sounds like the agency have already singed you. Do make sure when it comes to renewal, to ask for a rate rise in exchange for the longer payment terms.

**lambrini_socialist** · 15 April 2008, 16:24

Originally posted by NotAllThere View Post

Sounds like the agency have already singed you. Do make sure when it comes to renewal, to ask for a rate rise in exchange for the longer payment terms.

but it's not strictly renewal - i'm cutting this contract short and replacing it with another identical one which replaces Parasol with MyCo. i know the end client won't agree to a rate rise since i already got a hefty one at renewal time a couple of months back. unless you're suggesting i demand that the agency cut their margin?

nothing's definite yet anyway - i've agreed to nothing. just asked my agent if they'd have a problem with me dropping my umbrella, and they said no probs, but the payments will take 30 days instead of 14.

**original PM** · 16 April 2008, 14:05

You get a bit stitched on the payment terms but either way as long as they pay you on time and the correct amount it will make the sum total of no difference really.

With regards to your brolly the should not do anything except process your last payments correctly and then once that has been completed send you a P45 - make sure you have enough salary to cover any outstanding expenses you have.

The brolly should not get involved in the contract side of things - generally as long as the term of the contract are not breached then apart from losing you as a customer they should not care less.

No doubt you will get some muppet on the phone from them asking why you are leaving and try to offer you the moon on a stick to stay but I will assume that you have made an informed choice and therefore can avoid there pitous begging.

**lambrini_socialist** · 16 April 2008, 16:12

the other thing they're saying is they can't set me up with a new contract until i've provided my VAT certificate. (which is gonna take weeks to arrive as i've only just incorporated). surely this is none of their business as i can invoice them for VAT later down the line?

**NotAllThere** · 17 April 2008, 08:49

You are correct. It's rubbish. You can't invoice them for VAT until you're registered. But I'm sure they'll have some non-VAT registered contractors already on their books.

**Alan @ BroomeAffinity** · 17 April 2008, 09:13

Originally posted by lambrini_socialist View Post

the other thing they're saying is they can't set me up with a new contract until i've provided my VAT certificate. (which is gonna take weeks to arrive as i've only just incorporated). surely this is none of their business as i can invoice them for VAT later down the line?

It is a load of old tosh but if they dig their heels in and insist on VAT registration, online registrations are coming through in about a week's time. Your accountant should be able to do this through his online account with HMRC.

how to safely ditch my umbrella?