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louthy

umbrella companys

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Im a plasterer currently working for a agency and they have told me that I have to be paid by there umbrella company, at a rate of £20 a week, I told them I have my own public liability insurance etc so dont need to pay this much, is there a way round this without going ltd etc any help would be great

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The umbrella company is for tax reasons nothing to do with insurance, etc.

 

Generally if you are self employed (or working for an agency that doesnt do PAYE and NI), then you have two choices get paid through a LTD company (that you have set up or another you can use, I use my brothers), or an umbrella company, the umbrella company takes care of the tax issues, you will pay a lower rate than standard paye and can offset expenses such as travel, food, etc

 

You also need to contact HMRC and tell them about your circumstances and you will have to pay them NI, normaly only a few quid per week.

 

What the Umbrella company ?. I had an agency job that used Orange Genie and it all went quite smoothly.

 

Andy

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From my own experience, I would avoid using an umbrella company, and instead take any help and advice with going limited. I'm a class 1 (artic) driver, and have worked for an agency in the past who only paid via umbrella. While it might seem an attractive way of getting paid, would you be happy to pay 5% of your gross to the umbrella as a fee? My main gripe with them was I only worked 1 or 2 weeks for that particular agency, and although I was paid on time etc, some 4 months later, having not done any more work for them, I had a letter from HMRC telling me my tax code had been changed by the umbrella, and that they had told HMRC that they were my main employer, which was completely untrue.

I did speak to the umbrella at a later date regarding going limited, which they would have been all too happy to arrange, setting up company etc (all things you can do yourself) for a fee, charging me 5% of my gross again, and a further % to be arranged to be put toward an accountant (of their choice, not mine), again something you can easily arrange yourself.

One thing to ask yourself, if still working for an agency, will you be better off? With driving agencies, they tend to pay an average of £1 hour more on standard pay, and a slightly larger increase on overtime, to make it look more attractive. Will you be working solely for the agency? Or finding your own work at a later date?

I'm considering going limited myself, with a view to using the agency for work in the early days (I only passed my test 6 months ago, but have over 15yrs commercial driving experience) then slowly finding my own work. It would also serve as a good base for my ambition to become an owner driver. In the meantime though, having done my sums, it looks as though I will be better off going limited, this week alone, if I had been limited, my earnings would have been up by a couple hundred £.

All in all, if I were you, I'd take some time to mull over the pro's and con's of going limited, and avoid the umbrella like the plague.

As an aside, I don't know what agencies are like in your trade, but with driving, there seems to be a lot of agencies out there, many of whom don't have the work they claim to have. And they especially hate losing drivers to rival agencies. If you go limited, and as long as you know you're good at what you do, when they offer you your 'rates', there's no reason why you can't haggle over the rate, after all, they'll still be charging the client the same, albeit with lower outgoings for yourself, hence more profit for them. Why shouldn't they share some of that with you? They're probably not the only agency in town, and sometimes it doesn't hurt to remind them!

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