Umbrella companies

  VNAM75 19:51 10 Nov 2006
Locked

I've been provisionally offered a Data Analyst contract arranged through an IT recruitment agency. I am currently on a temporary contract in NHS finance where I get paid based on the number of hours worked per week (PAYE) by submitting weekly timesheets.

The agent has recommended that I register with a umbrella company for this new job. He says I will get paid a higher rate and be able to claim travel expenses (does this include daily commuting?).

Can anyone give me some information about umbrella companies?

Would I need to be registered as a company (like IT contractors)or would they arrange everything?
Would I have to pay fees to the company or a cut of my weekly salary?

  Jackcoms 20:14 10 Nov 2006

Surely if your "agent" has recommended using an umbrella company, he should have the answers to your questions should he?

  The Brigadier 20:30 10 Nov 2006

You set up your own company and theirfore can claim more tax back. Suggest a visit to the tax man site for more info & help.

  chocolate cake 22:45 10 Nov 2006

I don't think that he is asking you to set up a company as such. That would require a visit to companies house to register the company Costs money and your business affairs may be scrutinised a little.

What I think he is asking you to do is register with HMRC as a self-employed consultant whatever. I believe that the company for whom you would be nominally employed would then be freed the responsibilities of paying your holiday pay, class 1 NICs etc.

In effect you wouldn't actually be an employee of the company and therefore they are absolved of most of the normal PAYE regulatiuons with the exception of H&S and possibly a few others.

If you are unsure, and I think you shoud be, clarify with your agent before embarking.

  VNAM75 22:59 10 Nov 2006

OK, thank you to everyone for their advice.

  Forum Editor 23:04 10 Nov 2006

you would not be a director nor have the responsibilities associated with running a limited company. The umbrella company would take care of all accountancy, taxation, and administrative matters. The way it works is that you complete a timesheet in the normal way and send it to the umbrella company, which then invoices the agent. When the agent pays the umbrella company you get paid.

  spuds 23:09 10 Nov 2006

Might explain a little more!. click here click here

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