Autumn Statement 2016

[SlipTheJab]

Personally, I hope he scraps the IR35 crap. Hammond is supposedly Pro-contractor.

Im trying to find a mark that that statement is sufficiently wide of... but i cant.

[lucyclarityumbrella]

I've seen a few people mentioning umbrellas will become popular. Is there a rough comparison which essentially says that you are potentially better off going that route now rather than running your ltd? I had always thought running through an umbrella for those gov roles would have been the safest route, even if I kept my ltd ticking over in the background for when I went back to private sector.

When the mentions of the Public PSC legislation was bounded around in the round-table events at HMRC, there was still a perceived benefit of Ltd with the flat rate scheme, and the 5% expenses, but it appears the removal of these would mean operating through a Ltd gives no added bonus over umbrella. At least going umbrella means your insurances are covered and you have no paperwork hassle other than timesheets. If you know anyone in this situation, feel free to mention us

[jonnyboy]

[QUOTE=lucycontractorumbrella;2338093but it appears the removal of these would mean operating through a Ltd gives no added bonus over umbrella. [/QUOTE]

Can you show us your calculations?

[DaveB]

When the mentions of the Public PSC legislation was bounded around in the round-table events at HMRC, there was still a perceived benefit of Ltd with the flat rate scheme, and the 5% expenses, but it appears the removal of these would mean operating through a Ltd gives no added bonus over umbrella. At least going umbrella means your insurances are covered and you have no paperwork hassle other than timesheets. If you know anyone in this situation, feel free to mention us

How do brolly fees stack up against costs for accountancy, insurances etc? As a very rough estimate these come out to around £2,500 pa for me.

[jonnyboy]

How do brolly fees stack up against costs for accountancy, insurances etc? As a very rough estimate these come out to around £2,500 pa for me.

Really??!?!? Yikes. My costs are currently:

Accountants = £80pm = £960. I use freeagent (no costs for me) so accountants cost is for checking things through, year end sign off, questions, etc
Insurance (stat) = £350. For the mandatory twin insurance
Insurance (opt) = £299. This is for QDOS tax insurance

Thats £1609 (excluding VAT) - what else is in your £2,500??

[lucyclarityumbrella]

Can you show us your calculations?

If you let me know your hourly or daily rate I can show you - or simply go to our umbrella calculator and it will show you the breakdown.

Nothing hidden from this end, so you will see the taxes etc and as I mentioned our weekly or monthly margin will cover a £20m insurance package for you, plus don't forget you get statutory entitlements as an employee that you wouldn't through your own Ltd company.

[jamesbrown]

In the interests of balance, it's also worth bearing in mind that an umbrella company is another link in the chain that can fail, so even if it's cost neutral when the 5% allowance and FRS profit is gone, it isn't risk neutral. This is a general observation, not a specific one aimed at CU.

[jonnyboy]

Agreed. And with no bias or view one way or the other... I am always personally sceptical of a person or company which says "better of or the same going through us" - if this was true, how does the person or the company stay in business if they don't make any money? And if they do make money, where does that money come from?

[lucyclarityumbrella]

In the interests of balance, it's also worth bearing in mind that an umbrella company is another link in the chain that can fail, so even if it's cost neutral when the 5% allowance and FRS profit is gone, it isn't risk neutral. This is a general observation, not a specific one aimed at CU.

I will let you off then!
True, but as your legal employer we have an obligation to make payment to you (if the brolly is acting compliantly based on the Contract of Employment), plus we handle the credit control so you have no issues in chasing up payments. I would say as long as the contractor does their research and uses a "decent, reputable brolly" that has been around for a decent amount of time, then their money should be in safe hands!

[jamesbrown]

I will let you off then!
True, but as your legal employer we have an obligation to make payment to you (if the brolly is acting compliantly based on the Contract of Employment), plus we handle the credit control so you have no issues in chasing up payments. I would say as long as the contractor does their research and uses a "decent, reputable brolly" that has been around for a decent amount of time, then their money should be in safe hands!

Sure, but this isn't an advertising board, it's a forum for contractors to improve their understanding. FWIW, I've always recommended CU, in the past, when someone wasn't ready for, or capable of, running a Ltd. When someone is ready, it's good practice to eliminate as many links in the chain as possible, including all brollies and agencies I'm an equal opportunities eliminator in that respect