Reply to: Help with signing up to an umbrella company

[lucyclarityumbrella]

And I sit here thinking that honesty was the best policy

And HMRC wonder why contractor's are tempted, just look at the reality of around 53%...

Monthly
Company Income 11000.00
Employer's NI 1,239.27
Employee's NI 470.81
Employee Tax 3,329.58
Total All Tax 5,039.66
CU Margin 108.50
Total Net Income 5,856.90

[missinggreenfields]

What could possibly go wrong?

Just in case anyone was wondering, I got a detailed breakdown and it includes a £90k loan to me

Glad nothing was dodgy, I was starting to worry.

                                             ANNUALLY     MONTHLY
Gross Pay - Contract Value                   £132,000     £11,000
*Market Rate Gross payment:                   £33,000      £2,750
Less Expenses:                                 £8,640        £720
Gives you an Earned Income of:                £24,360      £2,030
Less Class 2 NI:                                 £146         £12
Less Class 4 NI:                               £1,467        £122
Less Income Tax @ 20%:                         £2,672        £223
Less Income Tax @40%:                              £0          £0
Total Deductions:                              £4,285        £357
This leaves available for Loans:              £99,000      £8,250
Less Fees:                                     £8,580        £715
Loan:                                         £90,420      £7,535

What you receive
*Market Rate Gross payment:                   £33,000      £2,750
Less Total Deductions:                         £4,285        £357
Add Loan:                                     £90,420      £7,535
You receive: Market Rate - Tax - NI + Loan:  £119,135      £9,928

Total Costs:     9.75%
You take home:  90.25%

[missinggreenfields]

The cost for Google Adwords for the term "Umbrella Company" was around £15.00 per click through last time I looked - so my guess is any company thati s prepared to pay out that kind of money is making way too much from the contractors

I searched for "UK umbrella company" and one of the adwords results at the top is offering me up to 92% take home. Put my rate into their calculator and apparently I can take home over 90% of my rate.

All this from a company that was only incorporated in the middle of 2014 and has never filed any accounts - but they do put their company number on the website, which is rare.

What could possibly go wrong?

[lucyclarityumbrella]

I asked them about this. they said its to gain more web exposure apparently.

The cost for Google Adwords for the term "Umbrella Company" was around £15.00 per click through last time I looked - so my guess is any company thati s prepared to pay out that kind of money is making way too much from the contractors

[alex2900512]

Just shows what a mess this market is. It seems there is Best Pay and Best-Pay. One of them is openly a 90%+ outfit. I don't know about the other one, but it is easy to see how new guys can get into something they never understood.

I asked them about this. they said its to gain more web exposure apparently.

[Fred Bloggs]

Just shows what a mess this market is. It seems there is Best Pay and Best-Pay. One of them is openly a 90%+ outfit. I don't know about the other one, but it is easy to see how new guys can get into something they never understood.

[alex2900512]

You won't be £200 worse off. You are going to be paid exactly what HMRC expects that you will be paid (bestpay are just after greedy fools). Their members may be £200 better off now but by the time HMRC have finished with them they will thousands if not tens of thousands of pounds worse off.

Don't let their false advertising trick / annoy you

its not so much that i will be better off with bestpay by £200. Its just that with any umbrella company I call, I seem to always get £200 or so less than PAYE rates.

[eek]

Decided to go with ContractorUmbrella. Signed up with BestPay then they sent the Employer Loan Agreement and after going through it and doing some browsing I decided to avoid them. I rather be £200 a month worse off but atleast I know I will be in the clear and wont be parted with the money in the future and no legal issues.

You won't be £200 worse off. You are going to be paid exactly what HMRC expects that you will be paid (bestpay are just after greedy fools). Their members may be £200 better off now but by the time HMRC have finished with them they will thousands if not tens of thousands of pounds worse off.

Don't let their false advertising trick / annoy you

[alex2900512]

Decided to go with ContractorUmbrella. Signed up with BestPay then they sent the Employer Loan Agreement and after going through it and doing some browsing I decided to avoid them. I rather be £200 a month worse off but atleast I know I will be in the clear and wont be parted with the money in the future and no legal issues.

[SlipTheJab]

Do you want to enter a nightmare in years to come concerning HMRC?

Please, if only I and many others had access to CUK and these forums years ago then I wouldn't be living the nightmare that thousands are living.

If not for yourself THINK of your family. Entering into a scheme, no matter how they dress it up, will be a truly horrendous decision in years to come.

+1. I had a lucky escape when I started contracting and it was only the agencies refusal to deal with the brolly fronting the scheme that meant I ended up going the Ltd route (thank god!). I knew no better then like a lot of people that fell for these snake oil salesmen (and are now suffering), the fact that this poster is on CUK, has been told that its going to end in tears but is still taking a punt is scary, hopefully he will heed some of the advice on here but those £££ signs are hard to see past for some...

[LandRover]

Do you want to enter a nightmare in years to come concerning HMRC?

Please, if only I and many others had access to CUK and these forums years ago then I wouldn't be living the nightmare that thousands are living.

If not for yourself THINK of your family. Entering into a scheme, no matter how they dress it up, will be a truly horrendous decision in years to come.

[SlipTheJab]

I speak to them over the phone and they give me the figures after taking all the information. They work with the agency I will be using too so that kind of gave me some reassurance. I will see how it goes for the first pay period and will then decide from there.

Your decision, just don't come when HMRC come calling...

[alex2900512]

you would be hard pushed to find any thing other then contractor umbrella recommendation on this site given the great feedback and the amount of work it does put in to fight for and against Gov/HMRC legislation that impacts all umbrella companies holds them in V.high regard by many.

would note that few of the other umbrella companies post the amount advice that contractor umbrella has done and still do in a open and honest format.

As the for "The Rate" are you just using the online calculators keep in mind these are just estimates you may find the actual rate different on the pay slip. many umbrellas are pushing its users to go LTD after joining using tactics hard selling making the assumption your out side of IR35/SDC and not disguised employee to offer you a better "Deal" but the "Nice Tax Person" will come you not them for the due tax its not worth it for few £ saved on clam for bus fair to work is it.

I speak to them over the phone and they give me the figures after taking all the information. They work with the agency I will be using too so that kind of gave me some reassurance. I will see how it goes for the first pay period and will then decide from there.

[lucyclarityumbrella]

you would be hard pushed to find any thing other then contractor umbrella recommendation on this site given the great feedback and the amount of work it does put in to fight for and against Gov/HMRC legislation that impacts all umbrella companies holds them in V.high regard by many.

thank you always nice to hear.

[sharky]

Hi guys sorry for late reply was abroad. Has anyone been with bestpay before? Its on the list Directory of Umbrella Companies & Alternative Contractor Pay Solutions :: Contractor UK so I would think its safe to use?

They are offering a very good rate without even including any expenses at all. I just dont want to go with them and find out I will never get paid in the end.

you would be hard pushed to find any thing other then contractor umbrella recommendation on this site given the great feedback and the amount of work it does put in to fight for and against Gov/HMRC legislation that impacts all umbrella companies holds them in V.high regard by many.

would note that few of the other umbrella companies post the amount advice that contractor umbrella has done and still do in a open and honest format.

As the for "The Rate" are you just using the online calculators keep in mind these are just estimates you may find the actual rate different on the pay slip. many umbrellas are pushing its users to go LTD after joining using tactics hard selling making the assumption your out side of IR35/SDC and not disguised employee to offer you a better "Deal" but the "Nice Tax Person" will come you not them for the due tax its not worth it for few £ saved on clam for bus fair to work is it.