Reply to: LTD using PAYE vs Umberalla PAYE

[simondolan]

I've never read quite so much hype!

The fact is that of the 5 original shareholders, 4 wanted to cash out. The remaining shareholder has therefore had to raise around £20 million, secured by floating charge over the assets of the Company.

I believe this is a quite ridiculous valuation for a Company making just over £1m according to their last accounts.

What it does is to put Parasol in a massively vunerable position as they now have debts of £20m to service.

This cash has not been raised to somehow improve the service or the business, it has been raised to enable to the other shareholders to cash out.

Any downturn in the market, fall from grace, change in legislation etc could mean the loans would no longer be serviced which would result in liquidation. In these circumstances the contractors who would be owed money would need to stand in the queue behind bank loans of £20m.

Oh, and they do not have 15,000 clients as the PR suggests - last accounts said somewhere under 3000.

This is on another contract portal:

Management buyout time at the biggest PAYE IT Contractor Umbrella company in the UK.

Parasol Ltd, one of the UK’s fastest growing companies – and one of the country’s leading recruitment services providers – took a huge step forward when it announced plans today for a new management structure that will pave the way for even higher levels of service and business success in the future.

The company stressed that these meticulously-planned changes will have no effect whatsoever on the service levels enjoyed by the 15,000-plus self-employed professionals and 2,500 recruitment agencies that Parasol works with, emphasizing that the changes are focused on building stronger internal structures from which the organisation can move forward to offer new services and to go to new territories.

Management Buy Out

To successfully implement its planned changes, Parasol has entered into a Management Buy-Out, with existing non-executive company shareholders being replaced by a new management team built around existing senior management and expert personnel in specific business roles.

Current Managing Director and founding partner, Rob Crossland remains as a major shareholder and in operational control of the company.

They obtained the funding from banks and venture Capital companies that will allow them to move forward.

Due Diligence

Before the investment companies would invest and the banks loan the money there was a huge amount of Due Diligence, as you would expect, as the investors wanted to invest in a safe contractor umbrella company who were compliant wit HMRC rules etc. rather than some of the more flaky schemes that HMRC might go after.

There have been several other attempts by Contractor Umbrella Companies in the past to try and obtain funding from investors but these have come to no avail after the Due Diligence phase.

It seems that Parasol have been the first to overcome this hurdle which will give them major competitive advantage over many of their rivals.

PCG

The Professional Contractors Group took a similar decision when it wanted to choose a safe partner when creating their own umbrella company Quality Umbrella or PCG (QU).

The last thing the PCG would want would be an umbrella company that ran foul of Government legislation or went bust taking contractor's money with them.

The PCG are known to be ultra cautious and it is significant that they chose Parasol to partner with them.

What's the Difference?

So, what difference will it make to IT Contractors and agencies?

Rob Crossland, the Managing Director of Parasol said it would be business as usual as far as contractors and agencies were concerned.

He compared it to when the Football Premiership was set up. There was great jubilation amongst the clubs but the fans couldn't see what the excitement was all about.

Premiership

There were the same teams playing that season as there were the season before and most of the players were the same. All that had changed, to them, was the name.

And indeed they were correct.

The big changes came gradually and to the benefit of the clubs, players, fans (and agents) alike. The money that got poured into the Premiership allowed the clubs to invest more in better players and facilities, leading to Arsenal getting to the final of the Champions League last year and Liverpool winning it the year before.

Same for Parasol

It should be the same with Parasol. They are safe enough to have been selected by the PCG and to have funds obtained from investors and banks where others have failed.

This will make them an even safer contractor umbrella company whilst giving them the funds to offer more and better services to their customers.

Dedicated to Service

With the Management Buy-Out now completed, the company’s 80-strong customer support team remains focused on continuing to deliver its high quality, award-winning professional services to both agencies and contractors.

Rob Crossland, Managing Director of Parasol commented, “This is an exceptionally exciting time for Parasol Ltd., its staff and its customers – and we have re-structured our business in a way that will allow us to continue to lead the market with innovative products and services. Parasol has become the byword for wholly compliant umbrella solutions and we look forward to further strengthening our position across the recruitment services sector.”

“The outcome of Parasol’s business change programme will set new benchmarks for the levels of service recruitment agencies and consultants can expect to receive”.

[Xtrain]

Hate to tell you I told you so....

They actually sold out a month or two back for £7.5m. The funding came from using their own cashflow. All entirely above board, but any downturn in the market, or in their own business could cause a great deal of cashflow problems.

This is on another contract portal:

Management buyout time at the biggest PAYE IT Contractor Umbrella company in the UK.

Parasol Ltd, one of the UK’s fastest growing companies – and one of the country’s leading recruitment services providers – took a huge step forward when it announced plans today for a new management structure that will pave the way for even higher levels of service and business success in the future.

The company stressed that these meticulously-planned changes will have no effect whatsoever on the service levels enjoyed by the 15,000-plus self-employed professionals and 2,500 recruitment agencies that Parasol works with, emphasizing that the changes are focused on building stronger internal structures from which the organisation can move forward to offer new services and to go to new territories.

Management Buy Out

To successfully implement its planned changes, Parasol has entered into a Management Buy-Out, with existing non-executive company shareholders being replaced by a new management team built around existing senior management and expert personnel in specific business roles.

Current Managing Director and founding partner, Rob Crossland remains as a major shareholder and in operational control of the company.

They obtained the funding from banks and venture Capital companies that will allow them to move forward.

Due Diligence

Before the investment companies would invest and the banks loan the money there was a huge amount of Due Diligence, as you would expect, as the investors wanted to invest in a safe contractor umbrella company who were compliant wit HMRC rules etc. rather than some of the more flaky schemes that HMRC might go after.

There have been several other attempts by Contractor Umbrella Companies in the past to try and obtain funding from investors but these have come to no avail after the Due Diligence phase.

It seems that Parasol have been the first to overcome this hurdle which will give them major competitive advantage over many of their rivals.

PCG

The Professional Contractors Group took a similar decision when it wanted to choose a safe partner when creating their own umbrella company Quality Umbrella or PCG (QU).

The last thing the PCG would want would be an umbrella company that ran foul of Government legislation or went bust taking contractor's money with them.

The PCG are known to be ultra cautious and it is significant that they chose Parasol to partner with them.

What's the Difference?

So, what difference will it make to IT Contractors and agencies?

Rob Crossland, the Managing Director of Parasol said it would be business as usual as far as contractors and agencies were concerned.

He compared it to when the Football Premiership was set up. There was great jubilation amongst the clubs but the fans couldn't see what the excitement was all about.

Premiership

There were the same teams playing that season as there were the season before and most of the players were the same. All that had changed, to them, was the name.

And indeed they were correct.

The big changes came gradually and to the benefit of the clubs, players, fans (and agents) alike. The money that got poured into the Premiership allowed the clubs to invest more in better players and facilities, leading to Arsenal getting to the final of the Champions League last year and Liverpool winning it the year before.

Same for Parasol

It should be the same with Parasol. They are safe enough to have been selected by the PCG and to have funds obtained from investors and banks where others have failed.

This will make them an even safer contractor umbrella company whilst giving them the funds to offer more and better services to their customers.

Dedicated to Service

With the Management Buy-Out now completed, the company’s 80-strong customer support team remains focused on continuing to deliver its high quality, award-winning professional services to both agencies and contractors.

Rob Crossland, Managing Director of Parasol commented, “This is an exceptionally exciting time for Parasol Ltd., its staff and its customers – and we have re-structured our business in a way that will allow us to continue to lead the market with innovative products and services. Parasol has become the byword for wholly compliant umbrella solutions and we look forward to further strengthening our position across the recruitment services sector.”

“The outcome of Parasol’s business change programme will set new benchmarks for the levels of service recruitment agencies and consultants can expect to receive”.

[MobileCheese]

Ok I understand now. A little digging into the calcs also showed some how they had me working 21.6 days a month instead of 20

[Lucifer Box]

It's the media's fault. By having these people on telly discussing spamming 'successes', it will only encourage further spamming...

It's got me thinking about a career change. Especially as a copper from the fraud squad was there and said their main focus of effort had moved away from attempts at law enforcement and onto educating the public in how to identify potential scams.

[simondolan]

When the IR come gunning for this stuff P4 will disappear in a puff of smoke and the only case they will have is one with all the contractors money in it.

I've also heard a rumour that Parasolit is to be bought out this week for a sum over £20M squid. Nice work if you can get it. The downside for the poor brolly punters of course is that come the day of reckoning there will be £20M worth of debtors getting their hand out before them (not counting the IR as well).

They actually sold out a month or two back for £7.5m. The funding came from using their own cashflow. All entirely above board, but any downturn in the market, or in their own business could cause a great deal of cashflow problems.

[Flubster]

There was dozy bint on GMTV a couple of days ago who sent £250k in amounts of £7k - £10k over a period of several months to scammers who told her she'd won the Australian lottery. And get this, despite her telling them she didn't want the money! They convinced her it was too much money to turn down and that she should collect it [after paying agents' handling fees and taxes up front, of course] and then donate the money to charity.

It's the media's fault. By having these people on telly discussing spamming 'successes', it will only encourage further spamming...

[Lucifer Box]

Do you mean that my new friend Manuel in Espania, to whom I sent my passport and bank account details plus £5000, isn't going to send me my winnings?

There was dozy bint on GMTV a couple of days ago who sent £250k in amounts of £7k - £10k over a period of several months to scammers who told her she'd won the Australian lottery. And get this, despite her telling them she didn't want the money! They convinced her it was too much money to turn down and that she should collect it [after paying agents' handling fees and taxes up front, of course] and then donate the money to charity.

[ASB]

Ahem! http://www.prosperity4.com/prosperity4/index2.aspx

However, take a look at their PDF on the detail of their expenses policy (a 1.2Mb download not linked from the expenses advertising blurb) and it includes references such as [/left]

...which to my mind tells you that you should receipt everything for your own records.

So they may well be open to accusations of misleading advertising but they are not actually saying that no receipts are necessary at all.

Bugger me, am I actually justifying P4's wesbite? I think I need to lie down...
[/color][/size][/font]

Well, I didn't say "to my certain knowledge"

I must say that does get very close to saying "just do it". However I do suspect they have the getout through the fuller details.

I could also give P4 a slim defence (but I'm struggling) because the statement they make is in fact entirely true. It's just wrong by omission.

[Xtrain]

P4 and brollys

When I changed to Parasolit (before eventually going Ltd) - to be fair they did actually say I needed receipts.

Still - makes me very irritated that I have been potentially left exposed - and I feel I have a fair case against P4 about it as the initial quote should have explained that.

When the IR come gunning for this stuff P4 will disappear in a puff of smoke and the only case they will have is one with all the contractors money in it.

I've also heard a rumour that Parasolit is to be bought out this week for a sum over £20M squid. Nice work if you can get it. The downside for the poor brolly punters of course is that come the day of reckoning there will be £20M worth of debtors getting their hand out before them (not counting the IR as well).

[LisaContractorUmbrella]

Lisa, you are doing a grand job with your explinations.

Since time began, or even earlier, this same question has been asked here and the same answer has always been given:


Good luck with trying to convlice the unconvinceable (even Chico seems to have given up, see General), but please be aware that you may need to invest in a harder head / bigger hammer to convice the unconvinceable.

Thanks Mrs Goof It does seem to be a hard point to get across sometimes but you know what they say - try, try and try again!

[MrsGoof]

Lisa, you are doing a grand job with your explinations.

Since time began, or even earlier, this same question has been asked here and the same answer has always been given:

No reciept = Don't claim

Good luck with trying to convlice the unconvinceable (even Chico seems to have given up, see General), but please be aware that you may need to invest in a harder head / bigger hammer to convice the unconvinceable.

[LisaContractorUmbrella]

Forgive me if I disagreee but it would be interesting if all the people posting on this subject called the top umbrella companies and see what exactly they tell you
I can only tell you from experience that the question they ask is how many hours I was out of the house for and when I told them 'around 11' , they tell me I am entitled to tax free sums ....
There's no mention of having to actually incur these expenses ?
There must be thousands of contractors who have underpaid their taxes
Now the question is .. who is going to tell them ?

I think I may be able to shed some light on this Gravesendboy. This may be a distortion of the 'detached duty' rules which state that it is not unreasonable to claim for the cost of meals if you are away from your normal place of employment or it could be the 'bending' another rule which allows the payment of an allowance to lorry drivers when they are away from home for a certain period of time. It could also be the assumption by the umbrella company that the IR would not deam it unreasonable for the contractor to claim for the cost of a meal if they were working beyond their expected hours of work and have set a threshold of an 11 hour day. However, the point is that you still cannot claim these amounts without receipts and it would be you and not the umbrella company that would have to support any expense claim you put through should the IR query it. Also remember that the dispensation gives an amount which is the maximum that can be put through without the umbrella company completing a P11D - this is not the amount that you can claim regardless of the amount that you have spent.
In answer to who will tell the contractors - Gordon Brown and Co and it will be in the form of a request for payment.

[Lucifer Box]

There's no mention of having to actually incur these expenses? There must be thousands of contractors who have underpaid their taxes. Now the question is .. who is going to tell them ?

What kind of retard seriously believes that you can claim an expense you haven't incurred? Is there anyone who genuinely believes that the UK taxpayer is going to give them some money just for leaving the house in the morning? I suspect they know full well what they are doing and choose to ignore the consequences believing that "I did it because the salesman told me it was okay" will be some kind of decent defence.

Maybe it's the same mentality that leads people to believe they can win the jackpot in a lottery they haven't even entered?

[Robwg]

I must admit - should the day ever come when the Umbrella's are taken to task for this then I could be up sh*t creek for the first year and a half of contracting.

Back when I was a naieve noobie - I went with P4. And the guy who did the quote basically said nothing about receipts, tax investigations - or anything - he just factored in the 15 quid a day you are allowed as part of your monthly quote. So I blindly claimed the 15 quid a day for about 18 months.

When I changed to Parasolit (before eventually going Ltd) - to be fair they did actually say I needed receipts.

Still - makes me very irritated that I have been potentially left exposed - and I feel I have a fair case against P4 about it as the initial quote should have explained that.

[gravesendboy]

Who's going to tell them ?

Forgive me if I disagreee but it would be interesting if all the people posting on this subject called the top umbrella companies and see what exactly they tell you
I can only tell you from experience that the question they ask is how many hours I was out of the house for and when I told them 'around 11' , they tell me I am entitled to tax free sums ....
There's no mention of having to actually incur these expenses ?
There must be thousands of contractors who have underpaid their taxes
Now the question is .. who is going to tell them ?