Reply to: Newbie Questions

[LisaContractorUmbrella]

I guess I should say you should read the guides Lisa?




What does search week mean?
Search week is a week that occurs at the end of a contract. If you do not have a new contract to start immediately we will pay you a week at the national minimum wage while you search for a new role. For Benchmarking contracts. For Swedish Derogation contracts we will pay you 4 weeks at 50% of your assignment rate.

It would appear as they are deducted pre-tax they are allowances which accumulate (hence the umbrella banks and gets interest) and then after the client contract runs out the company who employ you (the umbrella) can still pay another week..

Oh ok so basically the umbrella is putting through rolled up deductions for pay between assignments - you may like to check out a couple of threads in the umbrella company section about the legality of deducting money from contractors in order to fulfill employer statutory responsibilities.

[kingcook]

and some people say that running a limited is more complicated than an Umbrella

I found that umbrella was more complicated, not the using them part, but trying to understand what they were doing with my money.

Ltd Co FTW!!

[Sausage Surprise]

Thanks MrRobin.

For those saying I don't know how an Umbrella works I have read the guides and the options were included in two illustrations I have received from the companies which I couldn't find in the guides.

Eg: in the tax and ni deductions section


Er's NIC
Basic Pay
Holiday Advance
Search Advance
Notice Advance
Bonus
Taxable Income

PAYE Ee's NIC
Net Pay

They split out basic pay and bonus, the basic pay appears to be what they are prepared to pay each wk/mth even if the end client does not pay on time, the bonus is then the bulk which you will only get when thy have received funds from the end client.
Thus I can get separate money or wait until the client has paid and get it all together..

Regarding the Umbrella Company I found this list League Tables

And they are in the top 10 but was just looking for real life experience although I guess most of you have moved on to ltd companies.

Apologies for the basic mileage/lunch question...

and some people say that running a limited is more complicated than an Umbrella

[kingcook]

They split out basic pay and bonus, the basic pay appears to be what they are prepared to pay each wk/mth even if the end client does not pay on time, the bonus is then the bulk which you will only get when thy have received funds from the end client.
Thus I can get separate money or wait until the client has paid and get it all together..

The umbrella co. will only pay you once they have received money from the client/agent (at least in my short experience with an umbrella co.)

[malvolio]

Thanks for the explanation. I originally saw it like paying into a income protection insurance plan (hence allowable like their admin cut includes indemnity/public liability etc..). It's only like £15 a week but I guess if they have even a 1000 contractors on the books that's a nice sum in their bank account until payable..

Cheers for the reply.. The contract will be via an agency and so I will check the opt in/out bit when it comes through later this week. And yes it's £212 a week basic which is probably NMW*37.5

You don't have much of a choice about opting in or out, and you certainly need to do it before the contract turns up anyway. You need to talk to your umbrella about how they manage that aspect.

Then go back and read the guides (CUK and PCG) again in the light of your new knowledge. You have no idea how much you don't know.

[Coreyk]

My guess at your questions.
Are you contracting through an agency or direct with the client?
If you are contracted through an agency, check the payment terms in the contract.
If you are "opted in", then the agency should pay you without waiting for the client, normally invoice Monday - paid Friday.
If you are "opted out", then the agency is under no obligation to pay you before it receives payment from the client.
If your contract is direct with the client then it will depend on their invoice terms, +7, 30 or 60 days.

If the brolly is runnning a Pay Between Assignments scheme then they have to pay you 4 weeks of 50% of your assignment value over the last 12 weeks (normally) or NMW. Your assignment value does not include bonuses, so by paying NMW it cuts down their liabilities.

Those more knowledgable may be able to give you a better explantion?

Thanks for the explanation. I originally saw it like paying into a income protection insurance plan (hence allowable like their admin cut includes indemnity/public liability etc..). It's only like £15 a week but I guess if they have even a 1000 contractors on the books that's a nice sum in their bank account until payable..

Cheers for the reply.. The contract will be via an agency and so I will check the opt in/out bit when it comes through later this week. And yes it's £212 a week basic which is probably NMW*37.5

[Goatfell]

Eg: in the tax and ni deductions section

Er's NIC
Basic Pay NMW
Holiday Advance
Search Advance That's a new one on me, something to do with their efforts to find you your next role?
Notice Advance Advance payment of "Pay Between Assignments"
Bonus The balance of monies due after all the other deductions have been taken, as you are being paid NMW
Taxable Income

PAYE Ee's NIC
Net Pay

They split out basic pay and bonus, the basic pay (NMW?) appears to be what they are prepared to pay each wk/mth even if the end client does not pay on time, the bonus is then the bulk which you will only get when thy have received funds from the end client.
Thus I can get separate money or wait until the client has paid and get it all together.

My guess at your questions.
Are you contracting through an agency or direct with the client?
If you are contracted through an agency, check the payment terms in the contract.
If you are "opted in", then the agency should pay you without waiting for the client, normally invoice Monday - paid Friday.
If you are "opted out", then the agency is under no obligation to pay you before it receives payment from the client.
If your contract is direct with the client then it will depend on their invoice terms, +7, 30 or 60 days.

If the brolly is runnning a Pay Between Assignments scheme then they have to pay you 4 weeks of 50% of your assignment value over the last 12 weeks (normally) or NMW. Your assignment value does not include bonuses, so by paying NMW it cuts down their liabilities.

Those more knowledgable may be able to give you a better explantion?

[Coreyk]

Coreyk - I run an umbrella company and I have no idea what 'search advance' and 'notice advance' relate to as deductions - can you enlighten me??

I guess I should say you should read the guides Lisa?




What does search week mean?
Search week is a week that occurs at the end of a contract. If you do not have a new contract to start immediately we will pay you a week at the national minimum wage while you search for a new role. For Benchmarking contracts. For Swedish Derogation contracts we will pay you 4 weeks at 50% of your assignment rate.

It would appear as they are deducted pre-tax they are allowances which accumulate (hence the umbrella banks and gets interest) and then after the client contract runs out the company who employ you (the umbrella) can still pay another week..

[LisaContractorUmbrella]

Oh yeah thanks NLUK. The folks here at CUK seem to like us - CUK best umbrella company 2011

Now if I could only work out how to change my sig

[northernladuk]

Coreyk - I run an umbrella company and I have no idea what 'search advance' and 'notice advance' relate to as deductions - can you enlighten me??

Didn't you win something this year Lisa? What was it again?

[LisaContractorUmbrella]

Coreyk - I run an umbrella company and I have no idea what 'search advance' and 'notice advance' relate to as deductions - can you enlighten me??

[Coreyk]

Thanks MrRobin.

For those saying I don't know how an Umbrella works I have read the guides and the options were included in two illustrations I have received from the companies which I couldn't find in the guides.

Eg: in the tax and ni deductions section


Er's NIC
Basic Pay
Holiday Advance
Search Advance
Notice Advance
Bonus
Taxable Income

PAYE Ee's NIC
Net Pay

They split out basic pay and bonus, the basic pay appears to be what they are prepared to pay each wk/mth even if the end client does not pay on time, the bonus is then the bulk which you will only get when thy have received funds from the end client.
Thus I can get separate money or wait until the client has paid and get it all together..

Regarding the Umbrella Company I found this list http://www.freelancesupermarket.com/...llas.aspx#main

And they are in the top 10 but was just looking for real life experience although I guess most of you have moved on to ltd companies.

Apologies for the basic mileage/lunch question...

[MrRobin]

It's down to two - Smartworks and Parasoll, any recommendations?

Never heard of Smartworks. Parasol have a decent reputation but have no first hand experience of them. The only difference between your net pay with umbrella companies are their fees!

Is it better to get wages&bonus when the client pays or get wages anyway and bonus when client pays, the latter seems sensible but why have the other option?

Eh? Who's paying this bonus? The client? Not sure you understand how umbrellas work...

I'm not sure if they'll provide IT resource (guess it would be in the contract) as they are a multi-national and can't see them allowing job blogs laptop access to the network.

If they do and I have to buy myself a reasonable laptop do you have to install professional versions of windows and office (as obviously most come with home)?
I've got open office on home PC and use my iPad with touchdraw, keynotes (wth via adaptor etc) for mobile. Could you get away with a tablet and say an external keyboard/docking station?

Some clients ask contractors to bring their own equipment, but you may end up with a clientco laptop 'image' installed to get around the software requirements thing. Normal windows should be fine but you will need a version of office which is permitted for commercial use (i.e. not home)

Finally (sorry loads of questions) I'll be claiming my mileage to/from home (which will be about 500 a week) I've been told I can claim £6 a day lunch yet have read elsewhere that hmrc don't allow it..

You can only claim for expenses you have actually incurred. Is your lunch a valid business expense and you have receipts for them?

[Sausage Surprise]

Hi guys. After 15yrs Permi I'm about to take the plunge and just really looking for some reassurance and advice.

The contract should be ready to sign next week so anything useful to look out for would help.

It's a IR35 in type and as I'm "testing the waters" for 3months will be using an Umbrella Company. It's down to two - Smartworks and Parasoll, any recommendations?

Is it better to get wages&bonus when the client pays or get wages anyway and bonus when client pays, the latter seems sensible but why have the other option?

I'm not sure if they'll provide IT resource (guess it would be in the contract) as they are a multi-national and can't see them allowing job blogs laptop access to the network.

If they do and I have to buy myself a reasonable laptop do you have to install professional versions of windows and office (as obviously most come with home)?
I've got open office on home PC and use my iPad with touchdraw, keynotes (wth via adaptor etc) for mobile. Could you get away with a tablet and say an external keyboard/docking station?

Can they request to have their SW loaded and if so at the end of the contract is it their responsibility to remove it?

Finally (sorry loads of questions) I'll be claiming my mileage to/from home (which will be about 500 a week) I've been told I can claim £6 a day lunch yet have read elsewhere that hmrc don't allow it..

On some days to break up travelling I might overnight (guessing that works out better once the mileage rate drops after the first 10,000)..

Many Thanks.

CK.

I have no idea what this means and I'm not sure that you do either. As NLUK says.... read the guides first.

[northernladuk]

There are a whole bunch of guides to the right including a First Timers guides that covers all the questions you can possibly think of and a host of ones you haven't at this point. Please take the time to read them.

There is also a search function at the top right or a sticky on how to search the forums here

http://forums.contractoruk.com/welco...uk-forums.html

There is also a whole section of the forum dedicated to Umbrella companies here...

Umbrella Companies

And don't forget to read the main site here

Contractor UK - for UK IT Contractors, IT Contracting and Computer Freelancers

and also go have a look at the PCG website which has some great newbie guides...

Home | PCG

Enjoy....