Hi guys, I have done some reading about umbrella companies but I am still not 100% as to the pros and cons. Can someone explain to me exactly what they are? I currently work a part time job earning circa 15k a year. I intend to do a few days agency work each week, will this mean i am self employed?
Yes for your driving work no for your normal job
From what i have seen/heard better staying clear of
and your Regular Work counts towards the 48 Hour WTR 
dan2k7:
Hi guys, I have done some reading about umbrella companies but I am still not 100% as to the pros and cons. Can someone explain to me exactly what they are? I currently work a part time job earning circa 15k a year. I intend to do a few days agency work each week, will this mean i am self employed?
No despite what the agency want you to be so they can get out of paying employers NI and not pay you holiday pay. HMRC are cracking down on the whole self employed/umbrella crap. Its a dodgy time to be getting involved in it. On TNUK member has already posted a picture of the £16000 bill for tax HMRC sent him.
If you are paid through an umbrella company you will not be self-employed. You will pay tax and national insurance the same as anyone else.
With an umbrella company you claim tax relief on travelling to work, daily meal allowance and other job related expenses.
Some of the rules are changing in April and the umbrella companies are having to adapt to meet these rules.
Whether an umbrella scheme is a good idea or not, I am undecided, but I tend not to believe all I hear about them on here.
Conor:
One TNUK member has already posted a picture of the £16000 bill for tax HMRC sent him.
Some umbrella companies pay you minimum wage and the rest as a convoluted bonus that is next to impossible to work out as they deliberately make the payslip as confusing as possible. I’d steer clear of these, as at some point, the tax is bound to come knocking…
It’s probably what the 16k bill Coner mentioned is about!
Another interesting thing with agencies and umbrella companies is that most agencies will ONLY allow you to use their preferred umbrella provider. I wonder why that is? 
Conor:
dan2k7:
Hi guys, I have done some reading about umbrella companies but I am still not 100% as to the pros and cons. Can someone explain to me exactly what they are? I currently work a part time job earning circa 15k a year. I intend to do a few days agency work each week, will this mean i am self employed?No despite what the agency want you to be so they can get out of paying employers NI and not pay you holiday pay. HMRC are cracking down on the whole self employed/umbrella crap. Its a dodgy time to be getting involved in it. On TNUK member has already posted a picture of the £16000 bill for tax HMRC sent him.
ZZZZZZZZZ, For god’s sake let it go. You don’t personally agree with the current system and that’s fine, but let others make their own mind up whether umbrella/ltd company is for them and whether they “PERSONALLY” will be better off from it.
Plus the only thing HMRC are cracking down on and chasing up is the dodgy umbrella companies who don’t pass on the tax and VAT amounts owed that they charge the drivers for. Example being the exact case you highlight from think/new wave accounting.
As long as you or your accountant does your books correctly and you pay the correct amount at the right time you have nothing to worry about. Whether that makes it right or wrong in terms of what you can offset as tax allowances and get away with is another matter.
Hi guys thanks for the input. I have been told that the Umbrella company is NOVA contracting. Has anyone any dealings with these? Also one member has said that my part time job will be included in the working time directive? Is that true even if it is a non driving job?
nova are fine they were audited/looked into last year by hmrc and changed a few things they were asked to.
ask them yourself.
Nova will charge you 3% of your weekly wage, and a further £10 to ’ process ’ the PSC contract. (Personal service company).
Effectively they are set up as a client/contactor company. They will process your wages, sort your accounts, and deal with off setting your legitimate business expenses against your income, thus reducing your tax bill.
You are still on PAYE and you will also pay NI after around £8000 earnings. Money paid in on a Friday usually.
Mileage allowance is 45p per mile travelled to and from your workplace, meals up to the value of £10 per day can be counted if your workplace is minimum 5 miles from your home (receipt must be scanned/photo&upload), PPE/tools/workwear/satnav etc can also be used to offset tax.
Basically NOVA get £30 per week, per driver, and in return you get taxed a bit less than you would if you were a directly employed PAYE driver. NOVA’s charges themselves also get offset against your earnings.
You will be listed at Companies house as a director of ****** transport.
So trying to keep it simple if you work for an umbrella most pay £1 per hour more so working on a 10 hour day £10 per hour 5 day week for £500 you pay Nova £25 thats half your extra pay gone.
I must be missing something but whats good about that?
Not a lot really Mac. It’s obviously in the agency’s interest, otherwise they wouldn’t do it.
I know of a couple of agencies that insist on you using a particular umbrella, and it turns out that the umbrella company in question is part of them, lol.
Nice way of doubly ripping you off!!
Once you work it out, and compare your payslip’s against previous employers payslip’s for comparable gross pay, you DO come out with more net pay (despite the umbrella scheme’s charges).
The loser in all this is basically the taxpayer. It doesn’t cost 45 pence per mile to go to work IMO. Nor should you in my view, be able to offset daily meals against tax, but that’s what HMRC allow.
You are encouraged to slam as many LEGALLY ALLOWABLE receipts through as poss to reduce your tax. Like I say, the taxpayer in effect pay’s the £25, and keep’s these lot in business.
I worked PAYE for an agency for about 7 years and claimed expenses such as mileage direct from the taxman never needed to pay umbrella and also got holiday pay
mac12:
So trying to keep it simple if you work for an umbrella most pay £1 per hour more so working on a 10 hour day £10 per hour 5 day week for £500 you pay Nova £25 thats half your extra pay gone.
I must be missing something but whats good about that?
Like most things you have a choice, paid weekly = £1200 or paid monthly = £300, or pay nothing and claim it direct off HMRC.
eagerbeaver:
Nova will charge you 3% of your weekly wage, and a further £10 to ’ process ’ the PSC contract. (Personal service company).Effectively they are set up as a client/contactor company. They will process your wages, sort your accounts, and deal with off setting your legitimate business expenses against your income, thus reducing your tax bill.
You are still on PAYE and you will also pay NI after around £8000 earnings. Money paid in on a Friday usually.
Mileage allowance is 45p per mile travelled to and from your workplace, meals up to the value of £10 per day can be counted if your workplace is minimum 5 miles from your home (receipt must be scanned/photo&upload), PPE/tools/workwear/satnav etc can also be used to offset tax.
Basically NOVA get £30 per week, per driver, and in return you get taxed a bit less than you would if you were a directly employed PAYE driver. NOVA’s charges themselves also get offset against your earnings.
You will be listed at Companies house as a director of ****** transport.
The, listed at companies house as a director is incorrect if your on PAYE, but you will be if you go LTD, which how it used to be when I did agency via umbrella, these days it’s either PAYE as standard or the option of LTD, which I was advised against doing if your only planning to a few months because less than 6 months will attract an unhealthy bill from HMRC.
Thanks guys makes more sense. I don’t know how often I will be working for the agency but surely I will only need to pay nova if I have actually done work for the agency I am guessing?