Reply to: Best Umbrella Company to use?

[Wanderer]

Hi, I’m fairly new to contracting and totally new to using umbrellas (don’t have them in New Zealand!) I’m thinking about using parasol, planIT or Atlantic umbrella, I’ve talked to them all, and they all sounded OK, any warnings or recommendations before I make the leap?

Yes, the main warning is that you will pay a LOT MORE TAX with an umbrella. However, you will get a lot less agro with an umbrella and it would probably be a better bet if you are earning < 50,000 per year or will be working for less than a year.

Watch out for their BS umbrella earinings calculators, they presume that you will be claiming loads of expenses which probably isn't true. The amount of tax you pay on your income is fixed so there isn't anything to choose between them except their monthly charges and how easy they are to use. The "dispensations" they trumpet is a load of tutae. You can only claim for expenses actually incurred.

If you have a contract outside IR35 then consider going with a LTD company. Starting out, I'd recommend that you get an accountant to step you through what dividends to take, PAYE and VAT. Make sure you get an accountant who will sort out EVERYTHING for you so you just earn the money and write the cheques to the tax man when the accountant tells you to.

When you do bugger off back to Kiwi-land, make sure you do a tax return as you leave because if you work part of the year then you can get a tax refund.

[Wanderer]

So if I buy a laptop, or software, that I need to do the gig, it belongs to the brolly?

Yes, BUT you can buy it off them at 10% of the ticket price. So:

Laptop 1,000 pounds, you claim it on expenses then buy it off Parasol for 100 pounds. Does that make sense?

As opposed to your LTD buys a laptop for 1,000 then it belongs to the LTD not you. After a few years, I think you can write the value off though?

[malvolio]

So if I buy a laptop, or software, that I need to do the gig, it belongs to the brolly?

Yes. Dur....

Sod that!

So it's finally sinking in?

Thinks: that means the claim they all make about claiming expenses to get the tax back cannot be true if you cannot claim for the expensive stuff.

You only claim expense to recoup earned income spent on business costs. It's nothing at all to do with taxes, maximising income, or making a profit. If anyone tells you different, they are telling porkies.

[Numpty]

Not dodgy - makes perfect sense. If you work for Parasol you are an employee.

2. If you buy a PC and claim the cost of it as an expense from your employer, then it belongs to them - not you. Otherwise it's not an expense.

3. Part of Parasol's assets are now in your care. They want to make sure they get it back, if you change employer (umbrella company, go ltd, go permie). Hence the 10% deposit.

4. It's not your PC. If you take ownership of it, without payment, it will be taxed as a Benefit In Kind.

When you work through a brolly, (or a ltdco), you are not self-employed.

So if I buy a laptop, or software, that I need to do the gig, it belongs to the brolly?

Sod that!

Thinks: that means the claim they all make about claiming expenses to get the tax back cannot be true if you cannot claim for the expensive stuff.

[NotAllThere]

2. I understand the above assets will remain the property of Parasol on approval of the related claim.
3. I further agree to pay a security deposit equivalent to 10% of the purchase price.
4. I understand that I am able to purchase the above assets from Parasol after a qualifying period.

Not dodgy - makes perfect sense. If you work for Parasol you are an employee.

2. If you buy a PC and claim the cost of it as an expense from your employer, then it belongs to them - not you. Otherwise it's not an expense.

3. Part of Parasol's assets are now in your care. They want to make sure they get it back, if you change employer (umbrella company, go ltd, go permie). Hence the 10% deposit.

4. It's not your PC. If you take ownership of it, without payment, it will be taxed as a Benefit In Kind.

When you work through a brolly, (or a ltdco), you are not self-employed.

[Numpty]

I've just looked at the small print of the Parasol contract and you end up handing over all future Intellectual Property Rights to them. Not something that I want to do.

They say something weird about expenses too:

1. I understand that this equipment can not be used for private use and any personal benefits gained will be minimal.
2. I understand the above assets will remain the property of Parasol on approval of the related claim.
3. I further agree to pay a security deposit equivalent to 10% of the purchase price.
4. I understand that I am able to purchase the above assets from Parasol after a qualifying period.

Fair enough for number 1, but numbers 2, 3 and 4 sound dodgy.

Also, for a mileage claim using your own car, you have to provide petrol receipts for the whole cost of the mileage claim. So they don't allow for wear and tear, oil, servicing etc. only the cost of the petrol.

[DiscoStu]

Just say 'No!' to brollies.

Except when it rains. They're quite useful then.

[Fred Bloggs]

Just say 'No!' to brollies.

Often, sound advice that.

[BolshieBastard]

I've just looked at the small print of the Parasol contract and you end up handing over all future Intellectual Property Rights to them. Not something that I want to do.

Just say 'No!' to brollies.

[Contractor1010]

Parasol

Parasol - assuming they've sorted themselves out after their systems upgrade fiasco. Don't touch P4 whatever you do.

I've just looked at the small print of the Parasol contract and you end up handing over all future Intellectual Property Rights to them. Not something that I want to do.

[DiscoStu]

You don't say!

My mistake.

If you're going to spam at least have the decency to do so under the name of the company you represent rather that trying to palm it off as a contractor's opinion.

WHS. Abour 2/3rds of ANSOF's posts have been blatant Danbro promotion.

[Pondlife]

Think you are getting mixed up with their limited company services??? I am with Danbro's umbrella and their service is £22.00 per week (£12.36 with tax relief). I get paid on time with the correct amount so no problems at all.

You don't say!

My mistake.

If you're going to spam at least have the decency to do so under the name of the company you represent rather that trying to palm it off as a contractor's opinion.

[ANSOF]

I looked at Danbro, but I found them misleading with their fees, they firstly quoted me a low monthly fee, then it appeared that this was after tax relief so not totally upfront, so the low fee increased to 80/month, then if I wanted any sort of service the fee went upto 130/month - far more than I am paying now.

I chose not to go with them mainly due to them not being upfront about their fees, I thought if they are hiding on this, what else might they do.

Think you are getting mixed up with their limited company services??? I am with Danbro's umbrella and their service is £22.00 per week (£12.36 with tax relief). I get paid on time with the correct amount so no problems at all.

[DiscoStu]

http://www.danbro.co.uk/ have done a good job for me. Dont go anywhere near http://www.greenlantern35.co.uk/

Chugnut's post was made over 3 years ago, think he might have made a decision by now

[slickcontractor]

Can anyone recommend a good Umbrella Company to use please?

I’m just starting in the Contractor World and would like to use an Umbrella first to save hassle, also to see if the contractor life is for me.

http://www.danbro.co.uk/ have done a good job for me. Dont go anywhere near http://www.greenlantern35.co.uk/