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    Hi What company do you use - i need to get an umbrella company asap and am at a loss reading all these threads!

    Originally posted by Wary View Post
    Steve - I'm rather curious about these additional "employment costs". Surely these would be just Employers NI & the agreed up-front fees? Why else would it vary unless you're providing additional services, which again should be clearly agreed up-front, and which I would expect to be clearly detailed on the payslip to ensure transparency?

    I think you can answer this generally without referring to any specific case or individual. Might it be the case that you'd charge extra "employment costs" that weren't agreed up-front, with the reason for which not being explained on the payslip? Here's your opportunity to confirm or deny it.

    I'm not with Parasol but with a different umbrella. All deductions are clearly listed on their payslip and there's no hint of them taking any additional "employment costs", despite charging only a low weekly fee (£9.99). They do also charge £10 for a pension contribution, but that was agreed up-front & is stated on the payslip.

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      ContractorUmbrella for the win my friend
      In Scooter we trust

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        Originally posted by edels View Post
        Hi What company do you use - i need to get an umbrella company asap and am at a loss reading all these threads!
        To answer your question, I use Nasa. I'd recommend them as the weekly fee is only £9.99, the money is paid promptly and none of it is held back for whatever reason. They also charge £10 per pension contribution, which considering it has been a fair bit of hassle for them, is cheap at the price.

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          I cant disgree with you more. NASA are unprofessional and make lots of mistakes. They mis-read forms, pay you late and fail to see the error of their ways when challenged. At your own peril!!!!!
          Last edited by lonewanderer; 20 January 2012, 15:58.

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            Originally posted by lonewanderer View Post
            I cant disgree with you more. NASA are unprofessional and make lots of mistakes. They mis-read forms, pay you late and fail to see the error of their ways when challenged. At your own peril!!!!!
            I guess that with most companies, there will always be some people who have genuine cause for complaint.

            I can only speak for my own albeit limited experience, and although they haven't been 100%, my money has so far arrived on time, everything adds up, no money is withheld for whatever reason and they managed to make the first pension payment successfully even though there was plenty of scope for things to go wrong.

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              The list of bad umbrella's is slowly building up
              In Scooter we trust

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                Originally posted by Wary View Post
                Now I think I understand how they do it

                The difference between their employers costs calculation & the employers NI calculation is that the former does not deduct your expenses from the taxable amount whereas the latter does. Only the latter is paid to HMRC with them pocketing the difference. I'm only speculating but this would be consistent with Steve's calculation example & also Yehudi's claim on the other ongoing thread.

                Does it make any kind of sense to levy additional fees against each individual contractor on the basis of 13.8% of their expenses claimed? Does a higher level of expenses increase Parasol's costs when processing their payroll? As this money is supposed to cover the element of sick & maternity pay they can't claim back, maybe they think that the higher your deductable expenses then the more likely you are to get sick or pregnant?!?

                Or maybe the reason they do it this way is that to most, it will seem like a bona fide calculation of enployers NI but with a subtle difference that only the most astute & vigilant will detect? Certainly Steve's calculation had me fooled initially; it was only after reading Yehudi's post that the subtle difference dawned on me. Could it be that they take the stance that although it is perhaps not as fair as increasing the upfront fee across the board, the advantage to Parasol is that it is more easily hidden?

                The fee could actually be much higher as Steve's calculations also exclude pension contributions. Do they also effectively tax these at 13.8% too?
                As someone who has recently left the umbrella game I can confirm that Wary has got it sussed. This practice has been going on for quite a while with umbrella companies who "sail close to the wind" with how they calculate "employment costs". In effect the 13.8% is deducted from gross income and then 13.8% of taxable income is paid to HMRC as Employers NI. The difference in gross income and taxable income is normally Umbrella Fee + Expenses Claimed. So in effect the Umbrella is getting their umbrella fee + 13.8% of (Umbrella Fee + Expenses claimed). A nice little earner for the umbrella company when a large amount of expenses are claimed.

                This is the first time I have seen one of the big players be caught out (although that doesn't mean the others are not doing it) and generally it was used by the companies who operate free of charge or with very low fee structures. I can assure you that anyone charging less than say £15 per week is making very little money if any at all on those fees!

                Is it legal? It probably is and the employer is only obliged to pay Employers NI on taxable income.

                Is it ethical? No it isn't and I'm pretty sure the recruitment agencies will not be very happy with this scenario (unless they are getting a cut of course!).

                Why are they doing it? In Parasol's case it is probably to increase profits in the short term as they are for sale. For the others it is to offer their services at vastly reduced rates.

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                  @Wary, thanks for your explanation. I've been trying to figure out an unexplained 'employment cost' of £100-£150 on each of my 3 previous months payslips without luck. But as soon as I read your note I had the eureka light bulb moment. The amounts correlate exactly to my expense claims for each of the months multiplied by 13.8% !

                  Calls and emails to Parasol to find out what has been going on have been useless, in fact they have been deliberately evasive I think. btw, I contribute into their pension scheme each month and it looks as though they are not including the pension contributions as part of their sneaky calculation, its only the expenses they seem to be using.

                  Underhand and crafty tactics. They have lost all credibility for me, so I'm out of Parasol for my next contract (been with them for over 4 years, and been really happy up til now).

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                    I'm glad that my bit of investigative journalism has helped! Although personally not a victim, this underhandedness does make my guts turn. I certainly wouldn't stand for it.

                    There has been some talk on these forums of the possibility of taking them to an employment tribunal. I'd certainly consider it.

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                      I discovered it within 2 months of using them and promptly left, I had a phone call from them to say they didn't want me to leave and that they were sorting out their AWR costs which I just ignored. After all if you're not going to be upfront from the start you're not going to changes your ways
                      In Scooter we trust

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