Contracting - Umbrella Co's?

[egomeister]

I've just picked up a 3 month contract, and am looking at umbrella companies. (i don't think its worth setting up my own ltd for what is initially such a short time)

The agency has recommended Prosperity4 (www.prosperity4.com) to me. Has anyone used these before and were you impressed with the service? Does anyone have any other recommendations?

[srebbe64]

You could try these guys:

www.teowhong.com/

>> Edited by srebbe64 on Wednesday 25th May 14:28

[bigandclever]

Limited company, with specialist accountant, is the way to go, but I can understand why an umbrella is a nice-looking option.

P4, hmmm. Very aggressive tax planning is a nice way of putting it The agency has recommended P4 because they get a referral for it, plain and simple.

I've always gone direct and never had any problems getting paid, used an accountant for all the paperwork and never had a problem. Of course, now I've just gone and buggered it all up by stating that, but hey So I can't recommend an umbrella to you... take a look at the Business/Contracts forum at www.contractoruk.com. P4 aren't very popular.

You could also go here www.blagger.com/scripts/db4.php?company_id=1378&companyname=Prosperity4%20/%20Prosperity%204 for some more detailed, erm, "colourful" opinions.

[egomeister]

srebbe64 said:

You could try these guys: <a href="www.teowhong.com/">www.teowhong.com/</a> >> Edited by srebbe64 on Wednesday 25th May 14:28

Hmm, they've got a interesting looking product but i'm not sure how good a Malaysian umbrella co. will be at managing my tax...

[egomeister]

bigandclever said:

Limited company, with specialist accountant, is the way to go, but I can understand why an umbrella is a nice-looking option. P4, hmmm. Very aggressive tax planning is a nice way of putting it The agency has recommended P4 because they get a referral for it, plain and simple. I've always gone direct and never had any problems getting paid, used an accountant for all the paperwork and never had a problem. Of course, now I've just gone and buggered it all up by stating that, but hey So I can't recommend an umbrella to you... take a look at the Business/Contracts forum at www.contractoruk.com. P4 aren't very popular. You could also go here www.blagger.com/scripts/db4.php?company_id=1378&companyname=Prosperity4%20/%20Prosperity%204 for some more detailed, erm, "colourful" opinions.

Thanks, hadn't spotted that ContractorUK had a forum - doh!

Parasol IT seem to have good reputation (no mention of bargepoles anyway!) I'll give them a call tomorrow and see what they have to say.

If I continue contracting I'll definitely go the way of ltd co, as it is there isn't much time to sort this out before I start so I think I'll go with an umbrella for these three months and take it from there.

[bigandclever]

egomeister said:

there isn't much time to sort this out

Your decision, natch, but I've just helped a mate set up in less than 2 days - it's not difficult.

One thing to be aware of is that the umbrellas do want to make as much money as they can from you, so be wary of any tie-in clauses. It'd be a bugger if in 3 months you wanted to leave and you were tied into 12 months or (say) £2k of fees.

[M@H]

egomeister said:

I've just picked up a 3 month contract, and am looking at umbrella companies. (i don't think its worth setting up my own ltd for what is initially such a short time) The agency has recommended Prosperity4 (www.prosperity4.com) to me. Has anyone used these before and were you impressed with the service? Does anyone have any other recommendations?

Prosperity4 not heard good things about them.. and they want 6% from memory..!!

Have a look at Parasol, or Giantgroup..

I'm with Giantgroup.. a flat £35 a week fee and on the whole not too bad ..they've got some ideas on IR35 too..


PS. I set up with Giant in under a week..

>> Edited by M@H on Thursday 26th May 11:25

[egomeister]

I've just been on the phone to ParasolIT and they seem to be far more open about what they do. I'll speak to them again to check that there are no minimum terms etc.

Longer term I will definitely go the route of ltd co, as it offers much more flexibility and no ongoing fees (accountants excepted, and for the amount of transactions I will have I can get that done in exchange for alcohol, hehe!)

Bigandclever - thanks for your advice. Is there any other common catches/pitfalls I should be aware of with umbrella co's?

[bigandclever]

egomeister said:

common catches/pitfalls

Unfavourable payment terms

Tie in clauses (be it duration of agreement, or costs)

"Special dispensations" on receipts from the IR being touted as a way to make more money. No, you still need to have legitimate expenses, you just don't need to provide as many receipts.

Foreign currency loans - run away. RUN AWAY!

Check the info you get back from the umbrella, don't just trust them to get it right.

(I think) To protect you from IR35 the umbrella will pay you a decent director salary, thus negating the usual trickerypokery contractors could do to reduce tax liabilities on low salaries. I've just read some blurb from Giant and it made no sense whatsoever.

[Eric Mc]

IR35 turns virtually ALL the income derived through your limited company into a salary payment - thereby ensuring you pay full PAYE and National Insurance on what you've earned.

Up to the introduction of IR35, many Directors of these companies drew the bulk of their income out of the company in the form of dividends, thereby escaping any need to pay National Insurance.

In March 2004, Gordon Brown introduced a flat 19%CORPORATION TAX charge on DIVIDENDS - so arguing over whether your company falls within IR35 or not is gradually becoming academic.

[Catlover]

My partner has been using Parasol IT and has been having huge problems with them. Basically they can't seem to produce a correct invoice, and consequently he hasn't been paid now for 3 months! Has anyone else had similar problems with them?

[egomeister]

Catlover said:

My partner has been using Parasol IT and has been having huge problems with them. Basically they can't seem to produce a correct invoice, and consequently he hasn't been paid now for 3 months! Has anyone else had similar problems with them?

I went with them in the end after starting this thread and had no problems at all although I have heard of others who have had trouble.

I take it he has tried to call them and discuss the problems - I always found them to be helpful on the phone.

Another company I have heard good things about is www.brookson.co.uk/ if you are still having trouble.

[Catlover]

Initially they responded really quickly. However, they seem to not reply to any of his emails now, and when he does manage to get through to someone on the phone they don't do what they commit to, ie send an invoice! It is completely crazy.

He is going to start invoicing directly, once his company have confirmed he can and then I will sort out his VAT and tax for him. But he really needs to get the last 3 months of earnings!

I have phoned them myself today to find out who reports to who etc and suggested to him that he sends a registered letter to the director listing his issues.

[egomeister]

Catlover said:

Initially they responded really quickly. However, they seem to not reply to any of his emails now, and when he does manage to get through to someone on the phone they don't do what they commit to, ie send an invoice! It is completely crazy. He is going to start invoicing directly, once his company have confirmed he can and then I will sort out his VAT and tax for him. But he really needs to get the last 3 months of earnings! I have phoned them myself today to find out who reports to who etc and suggested to him that he sends a registered letter to the director listing his issues.

Sounds like you know what needs to be done to sort things out and will be taking future payments directly. Writing to the directors sounds like a good plan. Hope all the troubles are sorted out soon!

[JohnSW20]

Hi
I will be starting a limited company solution company on Monday, I've been working for the market leader for the last four years, We will be Universal Payroll Services based in Stratford London. The people I will be working with already run two other limited company providers.

If you need any help let me know I can do special rates for Ph'ers.

John

Edited by JohnSw20 on Saturday 3rd June 08:39

[UpTheIron]

JohnSW20 said:

Payrole

[summers]

I've been with pro corporate for over a year now and have had no problems whatsoever.
They are always very knowledgeable whenever i have tax questions.
A lot of my colleagues use parasol and have problem after problem with them.
Take a look www.pro-corporate-online.co.uk

[MarkoTVR]

Just remember not to believe everything you hear about the % take home that many umbrella companies say they offer......it's unlikely to be the standard figure, more likely the best case.

I was called by Prosperity4 a number of times and eventually agreed to entertain one of their sales reps who rattled on about "75-80% take home". After I'd given him all the details of my situation at the time, the best he could come up with was 61%, so 39% tax in effect. The call ended very soon afterwards.