The scourge of umbrella companies
Discussion
Yet another scab forming onto a wound is the growth of these umbrella companies. Government is investing the M.O. of such companies which operate like a leech, winning contracts and 'subbing ' them out to smaller companies under the harshest of contracts. One chap working under one of these 'outfits' complained to his M.P. last week ' I have been charged £6 for the company for my payslip, that is time it took to work out and the actual paper used along with delivery to me'. Is this how we want our hard working people to be treated? Cameron replied 'no it certainly is not' we are investigating.
Umbrella companies are a nightmare. I get charged £25.00 a week for the 'privilege' of working through an Umbrella company. I also have to pay the Employers part of NI, As well as the Employees part. By law (Agemcy Workers Regulation Act 2010) I should also be entitled to paid holidays, and paid Bank holidays, but do not get them.
They also flout Income tax laws by allowing us to claim for traveling expenses, meal expenses, purchase of equipment, laundry etc which is all offset against Tax.
Where I work, Imwould estimate that 90% of us are Agency workers, all employed through Umnbrella companies. Many have been working there for over 2 years - after 2 years you are not allowed to continue as an an Agency worker - but nothing is done. Workers are sacked with literally no notice, simply because one of the bosses doesn't really like them, and there is no comeback at all, if one was to take it to tribunal, the company would simply claim that the 'contract' had terminated, you were no longer required.
Umbrella companies allow the 'Employing' company to run their business using people that have no employment rights, do not need to be paid holidays or sick pay, and can be sacked at a moments notice.
The defence given by Employers that support employing Agency workers (edited)isn't is that it gives them flexibility, and is necessary for them to survive and compete, which of course it does. But take that to the logical conclusion, and there will be no need for any Business to employ anyone, they will all use workers who are forced to work through an Agency and therefore forced to work through an Emplyment company.
I understand that not ALL agency workers have to work through an Umbrella company, but the vast majority of them do. If you want to work, you HAVE to work through an Umbrella company, or form a Limited company, which quite a few of us have done, and even this is, strictly speaking technically illegal, and done purely to avoid paying Tax.
They also flout Income tax laws by allowing us to claim for traveling expenses, meal expenses, purchase of equipment, laundry etc which is all offset against Tax.
Where I work, Imwould estimate that 90% of us are Agency workers, all employed through Umnbrella companies. Many have been working there for over 2 years - after 2 years you are not allowed to continue as an an Agency worker - but nothing is done. Workers are sacked with literally no notice, simply because one of the bosses doesn't really like them, and there is no comeback at all, if one was to take it to tribunal, the company would simply claim that the 'contract' had terminated, you were no longer required.
Umbrella companies allow the 'Employing' company to run their business using people that have no employment rights, do not need to be paid holidays or sick pay, and can be sacked at a moments notice.
The defence given by Employers that support employing Agency workers (edited)
I understand that not ALL agency workers have to work through an Umbrella company, but the vast majority of them do. If you want to work, you HAVE to work through an Umbrella company, or form a Limited company, which quite a few of us have done, and even this is, strictly speaking technically illegal, and done purely to avoid paying Tax.
Edited by JensenA on Wednesday 18th February 19:20
JensenA said:
I understand that not ALL agency workers have to work through an Umbrella company, but the vast majority of them do.
JensonA, yes that fairly sums up the situation regarding these umbrella companies. Personally I see them as you do, legal get out clauses can be used that absolve all responsibility to any employee who has the misfortune to be working under these Companies.One such Company has a five billion pound turnover yet employs the smallest most basic direct labour to win contracts. The share price is relatively tiny for such a annual turnover, presumably the company have very little in the way of tangible assets. I may be wrong here but it seems that the umbrella strip out some profit from a contract won and then sub it to the nearest mug. Imo this practice of umbrella should be made illegal, it is damaging to the long term prosperity and ambitions of decent companies and employee's.
Fraser, NHS areas, rail, MOD all are under umbrella companies. Nightmare that I am surprised has not been discussed in this forum previously.
Fraser, NHS areas, rail, MOD all are under umbrella companies. Nightmare that I am surprised has not been discussed in this forum previously.
Edited by crankedup on Wednesday 18th February 19:40
It would make no sense to ban,
Don't forget the umbrella company will be providing employer's liability insurance.
- Subcontracting, and/or
- Contractors choosing to work through a limited company.
Don't forget the umbrella company will be providing employer's liability insurance.
i was pretty shocked to learn that most of the work force at a local rig building yard were working on these terms,and even more shocked to learn there was some scheme in operation where the employees sent a text to a number to receive complete refunds of tax paid. i do not know how long this was in operation and has apparently stopped,but they were basically ordinary employees on good wages ,not running a business with reclaimable expenses,yet able to avoid the rules that would normally be applied in that situation.
it was a strange set up and i have limited information as to how it actually worked so it may well have been legit,but seemed strange all the same.
it was a strange set up and i have limited information as to how it actually worked so it may well have been legit,but seemed strange all the same.
JensenA said:
Umbrella companies are a nightmare. I get charged £25.00 a week for the 'privilege' of working through an Umbrella company. I also have to pay the Employers part of NI, As well as the Employees part. By law (Agemcy Workers Regulation Act 2010) I should also be entitled to paid holidays, and paid Bank holidays, but do not get them.
They also flout Income tax laws by allowing us to claim for traveling expenses, meal expenses, purchase of equipment, laundry etc which is all offset against Tax.
Where I work, Imwould estimate that 90% of us are Agency workers, all employed through Umnbrella companies. Many have been working there for over 2 years - after 2 years you are not allowed to continue as an an Agency worker - but nothing is done. Workers are sacked with literally no notice, simply because one of the bosses doesn't really like them, and there is no comeback at all, if one was to take it to tribunal, the company would simply claim that the 'contract' had terminated, you were no longer required.
Umbrella companies allow the 'Employing' company to run their business using people that have no employment rights, do not need to be paid holidays or sick pay, and can be sacked at a moments notice.
The defence given by Employers that support employing Agency workers (edited)isn't is that it gives them flexibility, and is necessary for them to survive and compete, which of course it does. But take that to the logical conclusion, and there will be no need for any Business to employ anyone, they will all use workers who are forced to work through an Agency and therefore forced to work through an Emplyment company.
I understand that not ALL agency workers have to work through an Umbrella company, but the vast majority of them do. If you want to work, you HAVE to work through an Umbrella company, or form a Limited company, which quite a few of us have done, and even this is, strictly speaking technically illegal, and done purely to avoid paying Tax.
Ami I missing something? Who is forcing you to work this way? How?They also flout Income tax laws by allowing us to claim for traveling expenses, meal expenses, purchase of equipment, laundry etc which is all offset against Tax.
Where I work, Imwould estimate that 90% of us are Agency workers, all employed through Umnbrella companies. Many have been working there for over 2 years - after 2 years you are not allowed to continue as an an Agency worker - but nothing is done. Workers are sacked with literally no notice, simply because one of the bosses doesn't really like them, and there is no comeback at all, if one was to take it to tribunal, the company would simply claim that the 'contract' had terminated, you were no longer required.
Umbrella companies allow the 'Employing' company to run their business using people that have no employment rights, do not need to be paid holidays or sick pay, and can be sacked at a moments notice.
The defence given by Employers that support employing Agency workers (edited)
I understand that not ALL agency workers have to work through an Umbrella company, but the vast majority of them do. If you want to work, you HAVE to work through an Umbrella company, or form a Limited company, which quite a few of us have done, and even this is, strictly speaking technically illegal, and done purely to avoid paying Tax.
Edited by anonymous-user on Wednesday 18th February 19:20
REALIST123 said:
Ami I missing something? Who is forcing you to work this way? How?
Quite. If I didn't like the terms of my employment, I'd move. To a greater or lesser extent it's what 99% of us have done at some point - moved company because current employ no longer meets our requirements.But you can't get all frothy and start yet another angry NP&E thread with that sort of positive attitude, I suppose.
It's not really the Umbrella company forcing you to work this way, it's the actual employer. The employer will get contractors through the umbrella as, for many possible reasons, they don't want to employ permanent staff. This could be a simple reason such as having a temporary or seasonal spike in demand for their services.
In this case the worker usually has a number of options available to them, umbrella, agency PAYE, or Ltd co. There are benefits and drawbacks to all 3.
I worked through an umbrella when I took on a short term contract when between permanent jobs. The tax rules as set out by HMRC allowed me to claim for travel and subsistence expenses which are then paid before tax. Because of this I was better off financially even after taking into account the umbrella company fee and paying employer's NI.
As with most things in life there are some reputable companies and some less so but the idea of banning all Umbrella companies isn't the solution. As I understand it HMRC are reviewing the expenses position with umbrella companies anyway.
In this case the worker usually has a number of options available to them, umbrella, agency PAYE, or Ltd co. There are benefits and drawbacks to all 3.
I worked through an umbrella when I took on a short term contract when between permanent jobs. The tax rules as set out by HMRC allowed me to claim for travel and subsistence expenses which are then paid before tax. Because of this I was better off financially even after taking into account the umbrella company fee and paying employer's NI.
As with most things in life there are some reputable companies and some less so but the idea of banning all Umbrella companies isn't the solution. As I understand it HMRC are reviewing the expenses position with umbrella companies anyway.
mouseymousey said:
It's not really the Umbrella company forcing you to work this way, it's the actual employer. The employer will get contractors through the umbrella as, for many possible reasons, they don't want to employ permanent staff. This could be a simple reason such as having a temporary or seasonal spike in demand for their services.
In this case the worker usually has a number of options available to them, umbrella, agency PAYE, or Ltd co. There are benefits and drawbacks to all 3.
I worked through an umbrella when I took on a short term contract when between permanent jobs. The tax rules as set out by HMRC allowed me to claim for travel and subsistence expenses which are then paid before tax. Because of this I was better off financially even after taking into account the umbrella company fee and paying employer's NI.
As with most things in life there are some reputable companies and some less so but the idea of banning all Umbrella companies isn't the solution. As I understand it HMRC are reviewing the expenses position with umbrella companies anyway.
ThisIn this case the worker usually has a number of options available to them, umbrella, agency PAYE, or Ltd co. There are benefits and drawbacks to all 3.
I worked through an umbrella when I took on a short term contract when between permanent jobs. The tax rules as set out by HMRC allowed me to claim for travel and subsistence expenses which are then paid before tax. Because of this I was better off financially even after taking into account the umbrella company fee and paying employer's NI.
As with most things in life there are some reputable companies and some less so but the idea of banning all Umbrella companies isn't the solution. As I understand it HMRC are reviewing the expenses position with umbrella companies anyway.
In my experience most umbrella companies aren't "exploiting" the workers but allowing them a higher post tax income than under PAYE. The sort of people who may be targeted by IR35 as a limited company are those who tend to use umbrellas.
JensenA said:
U
I understand that not ALL agency workers have to work through an Umbrella company, but the vast majority of them do. If you want to work, you HAVE to work through an Umbrella company, or form a Limited company, which quite a few of us have done, and even this is, strictly speaking technically illegal, and done purely to avoid paying Tax.
Can you enlighten me as to what is technically illegal about forming a Limited Company?I understand that not ALL agency workers have to work through an Umbrella company, but the vast majority of them do. If you want to work, you HAVE to work through an Umbrella company, or form a Limited company, which quite a few of us have done, and even this is, strictly speaking technically illegal, and done purely to avoid paying Tax.
jesusbuiltmycar said:
JensenA said:
U
I understand that not ALL agency workers have to work through an Umbrella company, but the vast majority of them do. If you want to work, you HAVE to work through an Umbrella company, or form a Limited company, which quite a few of us have done, and even this is, strictly speaking technically illegal, and done purely to avoid paying Tax.
Can you enlighten me as to what is technically illegal about forming a Limited Company?I understand that not ALL agency workers have to work through an Umbrella company, but the vast majority of them do. If you want to work, you HAVE to work through an Umbrella company, or form a Limited company, which quite a few of us have done, and even this is, strictly speaking technically illegal, and done purely to avoid paying Tax.
...and how it means you avoid paying tax.
Dr Jekyll said:
jesusbuiltmycar said:
JensenA said:
U
I understand that not ALL agency workers have to work through an Umbrella company, but the vast majority of them do. If you want to work, you HAVE to work through an Umbrella company, or form a Limited company, which quite a few of us have done, and even this is, strictly speaking technically illegal, and done purely to avoid paying Tax.
Can you enlighten me as to what is technically illegal about forming a Limited Company?I understand that not ALL agency workers have to work through an Umbrella company, but the vast majority of them do. If you want to work, you HAVE to work through an Umbrella company, or form a Limited company, which quite a few of us have done, and even this is, strictly speaking technically illegal, and done purely to avoid paying Tax.
...and how it means you avoid paying tax.
Claudia Skies said:
It would make no sense to ban,
Perhaps it is a joke and is missing - Subcontracting, and/or
- Contractors choosing to work through a limited company.
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