Reply to: Contract Newcomer Umbrella Scenario

[LisaContractorUmbrella]

I'd suggest giving the agency a call and asking them for recommendations. If this really is with the Agency you claim they do not have any loyalty to any payroll or management company and will always try and find you the best solution within the law.

As far as I can see, the OP hasn't mentioned which agency he's with

[Seagull1964]

Agents are salesman so they will say anything to get a sale as there is no comeback to them.

Ask them to put it in writing that they know the umbrella company is not a scheme and complies with all the relevant tax and social security legislation in your home country and the country you are working in. (The latter is because of dual tax agreements if you don't spend an entire tax year in Hungary.)

I'd suggest giving the agency a call and asking them for recommendations. If this really is with the Agency you claim they do not have any loyalty to any payroll or management company and will always try and find you the best solution within the law.

[SueEllen]

I talked today with the agency and they told me that this umbrella has many contractors onsite in many countries with the same conditions. I have to decide until Friday.

Agents are salesman so they will say anything to get a sale as there is no comeback to them.

Ask them to put it in writing that they know the umbrella company is not a scheme and complies with all the relevant tax and social security legislation in your home country and the country you are working in. (The latter is because of dual tax agreements if you don't spend an entire tax year in Hungary.)

[Inq]

I talked today with the agency and they told me that this umbrella has many contractors onsite in many countries with the same conditions. I have to decide until Friday.

[Fred Bloggs]

I think that is sensible. They will likely be able to recommend a payroll provider locally or may even run a payroll themselves in Hungary.

[Inq]

I think I am going to contact some local Hungary accountants to have some opinions.
About this umbrella company I probably will refuse to sign the indemnity letter.

[Fred Bloggs]

This smells like one of the split income schemes. I wouldn't be surprised if the actual company is domiciled in Belize or Panama etc.. In other words completely untouchable if anything goes wrong.

[LisaContractorUmbrella]

According to them, I will be taking home between 85% and 88% of my gross income. This is too much I guess.
They told me that I will be doing another contract in Hungary to declare a lower gross income to the local authorities, so that the taxes will be lower there.

By contacting a local accountant in Hungary, do you think they could do the same as umbrella does? Issue invoices to the agency and take care of my timesheets?

There is something definitely not right here. You will be paying them 5% of the contract value which means that your tax rate will be between 7% and 10% whereas it seems that personal tax in Hungary is a flat rate of 16%. It also seems that the 'employer' which presumably will be the umbrella company is obliged to pay 27% healthcare insurance contributions National Tax and Customs Administration of Hungary - Short summary on the taxation of individuals. I've also read that you need a permit or visa to work in Hungary - this again will need to be sponsored by the umbrella company, your employer

I'm afraid I don't know if they have umbrella companies in Hungary and certainly wouldn't be able to recommend one but I really do think you need to find out a bit more about their tax system and working arrangements before undertaking this contract

[SueEllen]

I am resident in Portugal (European Union country). Asking some advice here because the recruiting agency is from UK, the umbrella is from UK, only the working place will be in Hungary. Also because this is the best site for contractors advices.

And do what Lisa suggested.

There is an entire forum board dedicated to the UK taxman chasing people, a long thread about the German taxman chasing people across countries and posts about random other European taxmen e.g. Norwegian, Belgium, Dutch getting their tax money one way or another.

I wouldn't like to see a post in 3 to 5 years time on how the Hungarian taxman is chasing you.

[SueEllen]

If the umbrella is from the UK, why does the indemnity say that the applicable law is that of the Republic of Ireland?

They clearly have a UK office address but are registered in Ireland.

[northernladuk]

I am resident in Portugal (European Union country). Asking some advice here because the recruiting agency is from UK, the umbrella is from UK, only the working place will be in Hungary. Also because this is the best site for contractors advices.

Well I suppose he didn't say advise......

[TheFaQQer]

I am resident in Portugal (European Union country). Asking some advice here because the recruiting agency is from UK, the umbrella is from UK, only the working place will be in Hungary. Also because this is the best site for contractors advices.

If the umbrella is from the UK, why does the indemnity say that the applicable law is that of the Republic of Ireland?

[Inq]

I am resident in Portugal (European Union country). Asking some advice here because the recruiting agency is from UK, the umbrella is from UK, only the working place will be in Hungary. Also because this is the best site for contractors advices.

[TheFaQQer]

Hi, I am a resident outside of UK (latin country) preparing to move (relocate) to the new country.

So you're resident outside the EU, working in Hungary, using an umbrella company from Eire, and asking for advice from ContractorUK

[Inq]

According to them, I will be taking home between 85% and 88% of my gross income. This is too much I guess.
They told me that I will be doing another contract in Hungary to declare a lower gross income to the local authorities, so that the taxes will be lower there.

By contacting a local accountant in Hungary, do you think they could do the same as umbrella does? Issue invoices to the agency and take care of my timesheets?