Is my umbrella company robbing me?

[R2D2]

I cant work out if my umbrella company is robbing me, my first pay was for just a week and the second one for a months pay.

Pay 1 = 1 week @ 48 hours and got deducted 17.5% in total, bearing in mind they take off £19.83 per week which is held as holiday pay for any time I have off.
Pay 2 = 1 Month @220.25 and I was deducted 38.76% in total.

Would it be more beneficial if I went to being paid weekly?

I understand the more you earn the more you get deducted but I just cant do the maths, can anyone help? Eric??

[JJCW]

You mean tax wise?

Tax codes are cumalative unless you're on a week 1 basis... so as i understand it your tax will always end up being the same, it just may take a while for it to level out.

[Eric Mc]

Can't comment on what your particular umbrella is doing. I don't have any clients who use umbrellas - they all run their own limited companies.

[davido140]

Eric Mc said:

Can't comment on what your particular umbrella is doing. I don't have any clients who use umbrellas - they all run their own limited companies.

+1 thats the way to do it, still more tax efficient/profitable, even with paying an accountant.

[Hoppy2008]

davido140 said:

Eric Mc said:

Can't comment on what your particular umbrella is doing. I don't have any clients who use umbrellas - they all run their own limited companies.

+1 thats the way to do it, still more tax efficient/profitable, even with paying an accountant.

and another one here +1

[R2D2]

Is it easy enough to do? Taking into account I'm not the best with paper work and figures. Does it matter on how much my hourly rate is for it to be effective to have an limited company and accountant?

[davido140]

R2D2 said:

Is it easy enough to do? Taking into account I'm not the best with paper work and figures. Does it matter on how much my hourly rate is for it to be effective to have an limited company and accountant?

piece of piss provided you can add up and subtract!

Basically the most you need to do is keep all your reciepts and invoices in a file to give to the accountant. you can save a few quid doing book keeping yourself but I could never be bothered,

VAT return every quarter is dead easy and there are a million websites telling you exactly what to put in each box on the form, simple simple maths.

Get cracking now with it, it takes a while to get the bank account setup these days and the VAT reg sorted due to money laundering regs IIRC

[Eric Mc]

davido140 said:

R2D2 said:

Is it easy enough to do? Taking into account I'm not the best with paper work and figures. Does it matter on how much my hourly rate is for it to be effective to have an limited company and accountant?

piece of piss provided you can add up and subtract!

Basically the most you need to do is keep all your reciepts and invoices in a file to give to the accountant. you can save a few quid doing book keeping yourself but I could never be bothered,

VAT return every quarter is dead easy and there are a million websites telling you exactly what to put in each box on the form, simple simple maths.

Get cracking now with it, it takes a while to get the bank account setup these days and the VAT reg sorted due to money laundering regs IIRC

There are some traps for the unwary.

My advice is -

keep in contact with your accountant throughout the year

agree a "payment to yourself" strategy for the year and stick to it wherever possible i.e pick a fixed regular amount to draw out for yourself each month or quarter

if you need to extract additional amounts from your company during the year, speak to your accountant BEFORE you take the money out

put through a certain amount of your personal income for PAYE purposes

review the situation with the accountant BEFORE 5 April each year and BEFORE the end of the company's financial year.

[Pork]

Hoppy2008 said:

davido140 said:

Eric Mc said:

Can't comment on what your particular umbrella is doing. I don't have any clients who use umbrellas - they all run their own limited companies.

+1 thats the way to do it, still more tax efficient/profitable, even with paying an accountant.

and another one here +1

and another one here. I used to pay £35 a week for an umbrella company and quickly worked out that an accountant wouldnt cost me £1500 a year and would most certainly do a better job!

So far, I'm happy going with an acoant.

[Eric Mc]

Pork said:

Hoppy2008 said:

davido140 said:

Eric Mc said:

Can't comment on what your particular umbrella is doing. I don't have any clients who use umbrellas - they all run their own limited companies.

+1 thats the way to do it, still more tax efficient/profitable, even with paying an accountant.

and another one here +1

and another one here. I used to pay £35 a week for an umbrella company and quickly worked out that an accountant wouldnt cost me £1500 a year and would most certainly do a better job!

So far, I'm happy going with an acoant.

Blimey, PH now thinks us professsionals are a dirty word

[crossle]

Pork said:

So far, I'm happy going with an accountant.

It helps if you can spell...

BTW Eric, have you got your TSR2 yet?

I'm very disappointed with mine...

Edited by crossle on Thursday 22 January 09:54

[john_r]

I used to be a shareholder in a contractors umbrella company - it was very lucrative!

Set up yourself and pay an accountant if I were you!

[Eric Mc]

crossle said:

Pork said:

So far, I'm happy going with an accountant.

It helps if you can spell...

BTW Eric, have you got your TSR2 yet?

I'm very disappointed with mine...

Edited by crossle on Thursday 22 January 09:54

WAY OT - but I presume you mean the 1/48 one. I won't be buying it as I generally stick to 1/72. I have the 1/72 in my stash. It has its problems as a kit but I'm sure nothing insurmaountable.