Isn't it illegal for agencies to insist you use an Umbrella

Obviously I mean an Umbrella scheme, not an Umbrella to keep the water off :grimacing:

I went for a PAYE (asked on phone, got told it was PAYE) job today through an agency, gets there, fills forms out, does licences and checks etc, and then gets to the ‘payroll form’ which includes the ‘fee’ for me to get paid the wages I’ve earned…

I’ve no interest, don’t want to be told ‘You’ll be better off by £x per week’ going through Umbrella or Ltd.

I just want paying for what I earn as a worker :unamused:

If I want to claim back travel expenses and meal crap, then I know what forms to fill in with the tax man, it’s not black magic :open_mouth:

I would say no its not illegal as you can do what you have done and walk away, unethical maybe but illegal not sure.

I thought there was a ruling a while back that basically said, they don’t mind them offering LTD and Umbrella schemes, but also have to offer PAYE too?

I’ve googled it and can’t find it, so maybe it was just a really pleasant dream :grimacing:

Walk away or go LTD some of the agency’s are slowly learning drivers arnt all knuckle dragging morons and don’t want to be S/E

to be fair if they explain it and assess if its going to be better for you then maybe its worth considering?

as other than holiday pay (which in my experience drivers tend not to take that much) if you go flat rate vat you are better off with the cash in hand so to speak.

if its not of benefit then yeah offer paye as I know a few older boys who are no better off on ltd so put paye.

Wayned Tomorrow’s budget has something about curtailing contractors’/umbrella company travel and subsistence expenses I read, that will probably be buried in the small print that he doesn’t read out at the speech, and only comes out when people get hold of the full text. This will shake a few of those daft(Lying) adverts that show ££’s per hour when in reality they are including meal allowance & travel etc …about time, lets have a fair wage!

mas430:
Wayned Tomorrow’s budget has something about curtailing contractors’/umbrella company travel and subsistence expenses I read, that will probably be buried in the small print that he doesn’t read out at the speech, and only comes out when people get hold of the full text. This will shake a few of those daft(Lying) adverts that show ££’s per hour when in reality they are including meal allowance & travel etc …about time, lets have a fair wage!

Nah, it’ll just cost the drivers more money and possible fines / big bills when discovered, the agencies won’t have any issues at all

its nothing new they have changed it already, think accounting was hammered and drivers done, nova were looked at and passed the hmrc test. not sure about the ‘in house’ schemes that various agencies run.

My agency tried to force me onto umbrella but I refused.
It’s all very well claiming all those expenses and yes you’re entitled to claim them but you’ll only be better off individually.
Our tax pays to run the country (yes I’m well aware they don’t use it as best they could) the less money there is in the system the less there is for building / maintaining infrastructure, hospitals, funding the MOD and police etc.
I’d rather pay a bit more to the taxman than let some parasite earn off of me.

war1974:
Nah, it’ll just cost the drivers more money and possible fines / big bills when discovered, the agencies won’t have any issues at all

Agencies will get screwed for employers NI plus corporation tax on whatever percentage of drivers invoices they decide don’t count. Drivers will most likely get a bill for income tax and NI for 20% of all they’ve claimed as expenses.

That is what should happen but the lack of tax inspectors at HMRC makes me think it won’t or will but only to the unlucky.

I’ve read through all the manuals and guidance HMRC released in April 2014 when they changed the goalposts and the vast majority of drivers self employed are not in compliance, neither are the agencies. Sadly the umbrella companies are in the clear as its not their responsibility to ensure you’re doing things legally - they just supply an accountancy service.

so nova passing the hmrc audit etc. but yet another post where you know better than everyone else?

and nova were assessed last year by hmrc and are compliant hence they only now offer one option.

There are too many firms that’ll let you waste your day signing up in every other aspect, only to tell you it’s “compulsary” to join the Umbrella.
It’s not.

What unfortunately is the case however - is that there was no actual desire for the firm in question to “employ you” at all.
If you are Umbrella or Ltd - YOu are SELF EMPLOYED. YOU pay both sets of national insurance contributions.

By rights, you should then be able to set your own rates - but of course you’ll be told “the rate is the rate” (ie OUR rate - take it or leave it) - Not bad for a firm that you are effectively employing out of YOUR pocket to “send you a payslip” each week with £27 deducted for “fees”.

This argument about “You’ll be better off under Umbrella” stems from the things you can get tax-deducted for. Trouble is, this has already been cracked down upon, and in future you’ll need receipts for absolutely everything claimed - even petrol and meal receipts. Petrol is easy enough, but 100 miles @ 45p a mile actually only saves you £9 which means you’d need to be claiming 300 miles a week just to break even on the typical umbrella fee of £27 per payslip (regardless of if it has 8 hours or 60 hours on it)

Food receipts? - Anything with no VAT number on it is not accepted by HMRC. That till roll you might get at a cafe, that bus ticket they might give you at a roadside kiosk - if you get anything from such places at all… They don’t count.

Maintenance for your own vehicle? - Not claimable I’m told - unless you actually use your vehicle to transport goods in rather than just commute to work in.
You mustn’t spend more than 40% of your working year at the same yard either. All these fences to jump, and you might end up with a typical tax saving of £20-£30 per week, the upper end if you are working 6 days… Too much mileage on your commute, and unless you have a very cheap to run car - you’re not gonna make money out of 9p per mile net are you?

Unless you can set your own rates to around £18 per hour (I would consider £14ph for a regular 48 hour week with a rolling 3 month contract) then umbrella just isn’t worth cutting your arm off just to get in the door for.

Everywhere that told me after I’d signed up that you “really need to join the umbrella” then gave me no work whatsoever when I insisted upon “PAYE only”. :imp:

Food receipts? - Anything with no VAT number on it is not accepted by HMRC. That till roll you might get at a cafe, that bus ticket they might give you at a roadside kiosk - if you get anything from such places at all… They don’t count.

Not correct…a company/sole trader does not have to be VAT registered if their income is below a set amount , you can still write down expenses against tax even if you don’t have a VAT number from that company/trader , what you cant do is claim the VAT back if your VAT registered.

Maintenance for your own vehicle? - Not claimable I’m told - unless you actually use your vehicle to transport goods in rather than just commute to work in.

You can claim up to 45ppm as long as the vehicle is insured for business use… that amount includes maintenance

If your going to give “advice” at least make sure is accurate

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If your going to give “advice” at least make sure is accurate
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All umbrella scams…oops sorry schemes,are another form of legal swindle ,if these folks wernt working for umbrella companies ,they would be swindling the ordinary man out of his money ,another way…If I ever got to power…the round-ups will begin

Rikki-UK:

Food receipts? - Anything with no VAT number on it is not accepted by HMRC. That till roll you might get at a cafe, that bus ticket they might give you at a roadside kiosk - if you get anything from such places at all… They don’t count.

I’ve been kicked off meal expenses at my agency, because I didn’t supply receipts for every single meal I claimed for. I was claiming it as a daily allowance assuming everyone got it. I was told that was wrong… Who actually eats out every damned day anyway? HMRC website was very specific about “self-catering doesn’t count” when it comes to claiming meal expenses.

Not correct…a company/sole trader does not have to be VAT registered if their income is below a set amount , you can still write down expenses against tax even if you don’t have a VAT number from that company/trader , what you cant do is claim the VAT back if your VAT registered.
People joining umbrella won’t be going Ltd or sole trader. If they were, they’d do this instead of joining the umbrella.

Maintenance for your own vehicle? - Not claimable I’m told - unless you actually use your vehicle to transport goods in rather than just commute to work in.

You can claim up to 45ppm as long as the vehicle is insured for business use… that amount includes maintenance

The 45ppm is a tax offset - not a gift from HMRC. At 20% base rate income tax that’ll knock 9p per mile off your tax bill upto taxable earnings around the £40k mark.

If your going to give “advice” at least make sure is accurate

Like anyone’s advice - I can only speak from personal experience.

Nova - only set you up as ltd company now and on the 10% vat scheme.

they charge 3% on any hourly equivalent over £8.25 and a flat charge of £10 a week for those who are on less.

this is fact not fiction or hearsay they also if you use them for more than 40 weeks a year they will do your return for a fee of £40.

I don’t work or have any affiliation with these and others are available however the above are facts not Conor assessing several reports etc.

If I was being railroaded into something I wasn’t happy with Id walk away sharpish. The whole s/e and umbrella situation is a mine field and the powers that be ie HMRC have plenty of tricks up their sleeves to enforce legislation that your average Joe has never even heard of. Think Accounting of Lincoln, bought out by New Wave Accounting is a fine example of the mess that has been created. Think boasted on their website that they were not a managed service company provider and gladly deducted their weekly fee from the contractors who used their services for accounting requirements. Those contractors are now receiving large tax demands in the thousands of pounds because of the managed service company legislation. Basically HMRC are saying that full Ni and income tax should have been paid on earnings.
So the situation is the hard pressed contractor gets a large tax bill and also in the process got fleeced by Think Accounting with excessive charges. The tax man gets money from the contractor and the poor old contractor begins to wonder what has hit him.
To me if companies that operate these schemes are constantly being checked out by HMRC for compliance, including Umbrella schemes then because of the large array of powers HMRC have then its only a matter of time before the goal posts are moved further in favour of HMRC.

I was told to do self employed thing you
need PAYE + 13% to make it worthwhile

Put it this way £1per hr increase ain’t worth it

Well just listening to the chancellor if your in an umbrella with an agency id be worried