Is paying paid via an Umbrella scheme fine to use?
I know a few years back people got stung by dodgy umbrella companies.
But Best Connection are offering a higher rate of pay for those being paid via an umbrella firm so curious if it is worth using or not.
I find generally if an agency are trying to entice someone to do something it’s for their benefit not yours.
My massive gut feeling with umbrella has always been to avoid it - if it sounds too good to be true it probably is.
Look carefully at best connection’s online application form - it requires you to agree to them deducting any money they see fit from your wages (although they word it as any money which they believe you owe them - why would you owe them money?). I told them to f. off - it’s not like there’s a shortage of agencies. Times have changed.
Probably not worth it. There have been a few threads on it. Essentially you will probably have two lots of NI (as opposed to one) and possibly an umbrella company fee coming out of the rate given. The rate given might also include holiday pay, so you wouldn’t get anything extra for holidays if that is the case. The argument proffered for might be that you can submit expenses to save tax, but in all likelihood, you would be worse off overall.
For some reason they difference in pay rates is quite often £1, which actually saves the agency money.
That pretty much sums it up.
This is one example. Yea, I understand you get paid holiday in lieu as part of your weekly wages.
My plan was just to do like 3 months on agency until the 2 week of January.
Prob starting from mid October.
Still considering it but yea, heard a few horror stories about Umbrella companies although all that did happen a few years ago now.
ask your self a simple question. does the difference between paye rate and the magic umbrella rate (1 or 2 pounds) cover the weekly deduction for the privalidge of being paid, holliday pay and the extra ni payment. In case you cant be bothered to work it out the answer is no it doesnt.
if your happy that it doesnt i have a stack of 10 pound notes here i will happily exchange for 11 pound each
oh and if you decided to get them to save your holliday you may well find that you pay income tax on it twice.
adam277:
https://indeedhi.re/3EkzIkoStill considering it but yea, heard a few horror stories about Umbrella companies although all that did happen a few years ago now.
Why are there fewer horror stories lately?
Because umbrella companies are better? Or because fewer people are getting involved with them?
Avoid.
adam277:
But Best Connection are offering a higher rate of pay for those being paid via an umbrella firm so curious if it is worth using or not.
No they’re not. You’ll come out worse off. When you’re on PAYE you get in addition to your hourly rate holiday pay and employers workplace pension contribution and those cost you nothing. Together they’re worth about 15.07% of your PAYE hourly rate. So if you’re on £10/hr PAYE you’re actually getting ~£11.50 including holiday pay and employers pension contribution.
Now for an employer to employ someone on PAYE it costs them:
Your hourly rate
Holiday Pay
Employers NI
Employers Workplace Pension contribution.
Apprenticeship Levy
It basically costs them about 27% more than your hourly rate to employ you so if you are on £10/hr it costs them roughly £12.70.
So how does this relate to umbrella companies? Well an umbrella company is still going to have to pay employers NI, apprenticeship levy, employers workplace pension contribution unless you opt out and holiday pay as those are all statutory under employment law and taxation. That is all going to come out of the hourly rate you’re paid as an umbrella worker that you get from the agency and then you still get employees NI and income tax deducted as well. Not only that umbrella companies do not work for free out of the goodness of their hearts so they’ll deduct a weekly fee too. So for you to be no worse off than working on PAYE with an umbrella company your hourly rate needs to be no less than 26% higher than the PAYE plus an amount that’ll cover the umbrella company payroll fee which could add another 50p/hr. I’m guessing Best Connection aren’t paying 27%+50p/hr more than PAYE.
adam277:
Still considering it but yea, heard a few horror stories about Umbrella companies although all that did happen a few years ago now.
No, it’s STILL happening now and lorry drivers working via them are still posting about problems they have getting paid etc.
Fair enough, I know Conor is the local guru when it comes to this stuff I’ll take his word and steer clear.
Conor:
adam277:
But Best Connection are offering a higher rate of pay for those being paid via an umbrella firm so curious if it is worth using or not.No they’re not. You’ll come out worse off. When you’re on PAYE you get in addition to your hourly rate holiday pay and employers workplace pension contribution and those cost you nothing. Together they’re worth about 15.07% of your PAYE hourly rate. So if you’re on £10/hr PAYE you’re actually getting ~£11.50 including holiday pay and employers pension contribution.
Now for an employer to employ someone on PAYE it costs them:
Your hourly rate
Holiday Pay
Employers NI
Employers Workplace Pension contribution.
Apprenticeship LevyIt basically costs them about 27% more than your hourly rate to employ you so if you are on £10/hr it costs them roughly £12.70.
So how does this relate to umbrella companies? Well an umbrella company is still going to have to pay employers NI, apprenticeship levy, employers workplace pension contribution unless you opt out and holiday pay as those are all statutory under employment law and taxation. That is all going to come out of the hourly rate you’re paid as an umbrella worker that you get from the agency and then you still get employees NI and income tax deducted as well. Not only that umbrella companies do not work for free out of the goodness of their hearts so they’ll deduct a weekly fee too. So for you to be no worse off than working on PAYE with an umbrella company your hourly rate needs to be no less than 26% higher than the PAYE plus an amount that’ll cover the umbrella company payroll fee which could add another 50p/hr. I’m guessing Best Connection aren’t paying 27%+50p/hr more than PAYE.
All this info is good so I won’t go over it again. I am paid by an umbrella company, something which wasn’t disclosed until they contacted me. I wonder why? Anyway this might help. They basically take 30% your gross pay. This week I earned from the agency £643.50 which was paid to the umbrella co. my net payment was £467.54. This is all broken down as already described but looking at the actual payslip the umbrella company skimmed off £150 near as dammit. So I basically work to line someone else’s pocket £150 for what? Admin ? This bunny is far from chuffed, scam? not really. Legalised robbery?? You decidei
Billynomates:
Conor:
adam277:
But Best Connection are offering a higher rate of pay for those being paid via an umbrella firm so curious if it is worth using or not.No they’re not. You’ll come out worse off. When you’re on PAYE you get in addition to your hourly rate holiday pay and employers workplace pension contribution and those cost you nothing. Together they’re worth about 15.07% of your PAYE hourly rate. So if you’re on £10/hr PAYE you’re actually getting ~£11.50 including holiday pay and employers pension contribution.
Now for an employer to employ someone on PAYE it costs them:
Your hourly rate
Holiday Pay
Employers NI
Employers Workplace Pension contribution.
Apprenticeship LevyIt basically costs them about 27% more than your hourly rate to employ you so if you are on £10/hr it costs them roughly £12.70.
So how does this relate to umbrella companies? Well an umbrella company is still going to have to pay employers NI, apprenticeship levy, employers workplace pension contribution unless you opt out and holiday pay as those are all statutory under employment law and taxation. That is all going to come out of the hourly rate you’re paid as an umbrella worker that you get from the agency and then you still get employees NI and income tax deducted as well. Not only that umbrella companies do not work for free out of the goodness of their hearts so they’ll deduct a weekly fee too. So for you to be no worse off than working on PAYE with an umbrella company your hourly rate needs to be no less than 26% higher than the PAYE plus an amount that’ll cover the umbrella company payroll fee which could add another 50p/hr. I’m guessing Best Connection aren’t paying 27%+50p/hr more than PAYE.
All this info is good so I won’t go over it again. I am paid by an umbrella company, something which wasn’t disclosed until they contacted me. I wonder why? Anyway this might help. They basically take 30% your gross pay. This week I earned from the agency £643.50 which was paid to the umbrella co. my net payment was £467.54. This is all broken down as already described but looking at the actual payslip the umbrella company skimmed off £150 near as dammit. So I basically work to line someone else’s pocket £150 for what? Admin ? This bunny is far from chuffed, scam? not really. Legalised robbery?? You decidei
if you want a laugh askthem to explain your payslip to you and watch them tie themselves up in knots
Billynomates:
Conor:
adam277:
But Best Connection are offering a higher rate of pay for those being paid via an umbrella firm so curious if it is worth using or not.No they’re not. You’ll come out worse off. When you’re on PAYE you get in addition to your hourly rate holiday pay and employers workplace pension contribution and those cost you nothing. Together they’re worth about 15.07% of your PAYE hourly rate. So if you’re on £10/hr PAYE you’re actually getting ~£11.50 including holiday pay and employers pension contribution.
Now for an employer to employ someone on PAYE it costs them:
Your hourly rate
Holiday Pay
Employers NI
Employers Workplace Pension contribution.
Apprenticeship LevyIt basically costs them about 27% more than your hourly rate to employ you so if you are on £10/hr it costs them roughly £12.70.
So how does this relate to umbrella companies? Well an umbrella company is still going to have to pay employers NI, apprenticeship levy, employers workplace pension contribution unless you opt out and holiday pay as those are all statutory under employment law and taxation. That is all going to come out of the hourly rate you’re paid as an umbrella worker that you get from the agency and then you still get employees NI and income tax deducted as well. Not only that umbrella companies do not work for free out of the goodness of their hearts so they’ll deduct a weekly fee too. So for you to be no worse off than working on PAYE with an umbrella company your hourly rate needs to be no less than 26% higher than the PAYE plus an amount that’ll cover the umbrella company payroll fee which could add another 50p/hr. I’m guessing Best Connection aren’t paying 27%+50p/hr more than PAYE.
All this info is good so I won’t go over it again. I am paid by an umbrella company, something which wasn’t disclosed until they contacted me. I wonder why? Anyway this might help. They basically take 30% your gross pay. This week I earned from the agency £643.50 which was paid to the umbrella co. my net payment was £467.54. This is all broken down as already described but looking at the actual payslip the umbrella company skimmed off £150 near as dammit. So I basically work to line someone else’s pocket £150 for what? Admin ? This bunny is far from chuffed, scam? not really. Legalised robbery?? You decidei
I don’t know the best way to deal with that.
I do know what I wouldn’t be doing next Monday morning.
Soon as I found out they took 30% of my wages I would ensure I would be in Monday morning.
I’d be sat in the seat of the truck. Only to phone the agency to tell them to fix it or I will not drive for the client. If the client asks I’ll tell them. Yea, it would make me look bad in the eyes of the client but it would make the agency look worse.
That being said I’d like to think I would of read the contract enough to know they have a 30% cut.
30%!?..
When they first started pushing umbrella schemes, they were taking £5 a week to to process and send you a text with your top line on. Now it’s just a bunch of crooks taking over a quarter of your hard earned. (I’ve never used a brolly scheme but I do remember the sales pitch to get me to join)
Sorry, but I have little sympathy for anyone who signed up for this.
You can tell them that you will work on PAYE terms or none at all. If they’re worth working for they’ll agree.
Leave umbrella,s for a rainy day
fuse:
Leave umbrella,s for a rainy day
Or a very sunny day 
I did Umbrella agency once, never again!!
ScaniaUltimate:
Make sure you have read this thread:
trucknetuk.com/phpBB/viewto … 2&t=169589
“They’re being very naughty,” said one logistics expert on condition of anonymity. “They definitely won’t be making many friends this way.” 