hi guys anyone use or know about shield umbrella company. good or bad
thanks
I would avoid umbrella companies full stop. HMRC introduced agency legislation in 2014 and there isn’t a single agency driver who meets the criteria meaning there are going to be a hell of a lot of tax bills landing on a hell of a lot of doormats. Even if you don’t get a bill expect to end up not getting paid when the umbrella company eventually gets their tax demand and folds as a result.
Just think about them for a minute. Say you have a quiet week and you do two days and 20hrs in total. You’re paying the umbrella company a quid an hour out of your wages because their fee is the same whether you do one hour or a hundred hours in a week.
It’s high time they banned all this. It’s been a fiddle from the get go and I’m amazed it’s lasted this long.
I found some old wage slips from about 10 years ago last week and I was top lining just over £600 and taking home over £500 every week, all with the approval of the agency and the payroll guys. Canford management I think I used back then as did most of the guys in my industry. I remember the lady who ran it giving it all up when new legislation came out in about 2006 or 2007 so I switched to Boss Solutions.
The one’s who wanted to scam even more money used Billy Stomgrove AKA Billy The Fish coz he was so slippery HMRC couldn’t get him. I knew guys earning £800, Billy took £20 and gave them £780 back. Most agencies refused to deal with him in the end. Last I heard he’d fled the country.
I was young and stupid and wouldn’t get involved with these shysters again. PAYE or I’ll find somewhere else ta very much.
You seem to be making out all umbrella companies are breaking some sort of law! I used an umbrella company in 2002 whilst on agency, which happens to be still running after all this time, so they have obviously not done anything illegal!
Yes there maybe unscrupulous fly by night umbrella companies out there, just like there are unscrupulous haulage companies.
In my experience of what happened in 2002 and 2014 using umbrella, they are most likely operating with in current legislation, or they would have been put out of business.
We all know that HGV drivers, weather self employed, limited co or using an umbrella company are the ones breaking tax laws, not the accountants or umbrella companies.
We all like to think that we can at some point pull a fast one on the robbing government, we may get caught doing it, but have nothing to complain about if we are, it’s a risk in life.
weeto:
You seem to be making out all umbrella companies are breaking some sort of law!
No, I’m telling you ALL umbrella companies are breaking the law.
HMRC changed the regulations in regards to agencies and intermediaries in 2014. If the worker is supervised, directed or under control of the client then the position does not fall under self employment, the worker is deemed to be employed by the agency and all expenses claimed are being falsely claimed.
This is the particular part that screws everyone working via an umbrella company.
hmrc.gov.uk/manuals/esmmanual/ESM2055.htm
And from this
Where a worker is engaged by or through an agency, there will be a presumption that there is (or there is the right of) supervision, direction, or control over the worker. This means it is the responsibility of the agency that contracts with the client to whom the worker provides their services to operate PAYE (see ESM2039) and act as the secondary contributor for NICs (see ESM2040).
And then the killer:
hmrc.gov.uk/manuals/esmmanual/ESM2039.htm
From 6 April 2014, the agency legislation at Chapter 7 of Pt 2 of ITEPA 2003 and the PAYE legislation at Chapter 3 of Pt 11 ITEPA 2003 have been amended to determine who should operate PAYE where more than one party is involved in the provision of a worker’s services.
For income tax purposes, where the conditions in s44(1) ITEPA 2003 apply, the worker is treated as holding an employment with the agency. The remuneration they receive in consequence of entering into the arrangements is treated for income tax purposes as earnings from that employment. In these circumstances, s688(1) and (1A) of ITEPA 2003 prescribe that the agency is the employer who must deduct income tax, operate PAYE, and remit the payment to HMRC via RTI.
Where there is more than one UK agency involved in the arrangements all based in the UK, section 44 of ITEPA 2003 deems the worker to have an employment with the agency which directly contracts with the client to provide their services and the provisions of section 688 (1A) apply to make that agency the liable employer who must operate PAYE. Where an intermediary of the agency makes the payment, the provisions of s687 will require the agency to operate PAYE if this is not done by the intermediary (see EIM11810 et seq). Where the payment is made by someone other than the agency or the intermediary, s688 (1B) treats that person as an intermediary of the agency. This again brings the requirements of s687 into operation with the effect that the agency must operate PAYE if this is not done by the other person. This will only apply where the worker is not already an employee of another company. Where they are an employee, the PAYE regulations will apply in the usual way to prescribe the employer.
You really need to go to the pages and follow all the links and it does take a lot of time to go through it all but the end result is that everyone who is currently involved in working for agencies via umbrella companies from the agency “employing” the driver to the umbrella company running the scheme to the end driver themselves are all currently engaging in tax evasion. Same applies to much of the work being done direct to the agency by drivers working as a Ltd Company.
You may get caught, you may not. You may end up with a big bill, you may not. But ultimately with every umbrella company they go after such as that one in Lincoln, they get the full client list and that gives them plenty of people to go after complete with all the evidence they need. Shooting fish in a barrel.
The fact the one you used in 2002 is still running is neither here nor there. All that means is they’ve not yet currently had HMRC knock on the door.
Conor:
weeto:
You seem to be making out all umbrella companies are breaking some sort of law!No, I’m telling you ALL umbrella companies are breaking the law.
HMRC changed the regulations in regards to agencies and intermediaries in 2014. If the worker is supervised, directed or under control of the client then the position does not fall under self employment, the worker is deemed to be employed by the agency and all expenses claimed are being falsely claimed.
This is the particular part that screws everyone working via an umbrella company.
hmrc.gov.uk/manuals/esmmanual/ESM2055.htm
And from this
Where a worker is engaged by or through an agency, there will be a presumption that there is (or there is the right of) supervision, direction, or control over the worker. This means it is the responsibility of the agency that contracts with the client to whom the worker provides their services to operate PAYE (see ESM2039) and act as the secondary contributor for NICs (see ESM2040).
And then the killer:
hmrc.gov.uk/manuals/esmmanual/ESM2039.htm
From 6 April 2014, the agency legislation at Chapter 7 of Pt 2 of ITEPA 2003 and the PAYE legislation at Chapter 3 of Pt 11 ITEPA 2003 have been amended to determine who should operate PAYE where more than one party is involved in the provision of a worker’s services.
For income tax purposes, where the conditions in s44(1) ITEPA 2003 apply, the worker is treated as holding an employment with the agency. The remuneration they receive in consequence of entering into the arrangements is treated for income tax purposes as earnings from that employment. In these circumstances, s688(1) and (1A) of ITEPA 2003 prescribe that the agency is the employer who must deduct income tax, operate PAYE, and remit the payment to HMRC via RTI.
Where there is more than one UK agency involved in the arrangements all based in the UK, section 44 of ITEPA 2003 deems the worker to have an employment with the agency which directly contracts with the client to provide their services and the provisions of section 688 (1A) apply to make that agency the liable employer who must operate PAYE. Where an intermediary of the agency makes the payment, the provisions of s687 will require the agency to operate PAYE if this is not done by the intermediary (see EIM11810 et seq). Where the payment is made by someone other than the agency or the intermediary, s688 (1B) treats that person as an intermediary of the agency. This again brings the requirements of s687 into operation with the effect that the agency must operate PAYE if this is not done by the other person. This will only apply where the worker is not already an employee of another company. Where they are an employee, the PAYE regulations will apply in the usual way to prescribe the employer.
You really need to go to the pages and follow all the links and it does take a lot of time to go through it all but the end result is that everyone who is currently involved in working for agencies via umbrella companies from the agency “employing” the driver to the umbrella company running the scheme to the end driver themselves are all currently engaging in tax evasion. Same applies to much of the work being done direct to the agency by drivers working as a Ltd Company.
You may get caught, you may not. You may end up with a big bill, you may not. But ultimately with every umbrella company they go after such as that one in Lincoln, they get the full client list and that gives them plenty of people to go after complete with all the evidence they need. Shooting fish in a barrel.
The fact the one you used in 2002 is still running is neither here nor there. All that means is they’ve not yet currently had HMRC knock on the door.
So a driver signs a contract with the umbrella company to deal with his accounts declaring he/she is self employed, at that point the only person who is now breaking tax law is the driver, all the umbrella company is doing is taking his/her word that they are.
Like I posted earlier, umbrella companies don’t just deal with HGV drivers, some IT workers also use them perfectly legally!
Think accounting is a fly by night outfit, ran by a director who is probably the only person being investigated by HMRC, do a company check on him and then see how many umbrella companies this 1 person has run in the past, and wound up, then started again under a different name! They will be after him for all the tax his companies haven’t paid.
I worked for an agency for a week recently which told me i would be paid properly via PAYE .
I was soon bored and left for proper employment , and was surprised the following week to find my weeks wages had not been paid !
I conracted agency thinking simple mistake
They replied ’ oh no we dont pay you . you need to ring this company in essex . i rang them and they said we need masses of personal information about you and £15 to process your wages .
I was thinking of using small claims court , when a letter arrived from HMRC saying that ‘d
eltrotterpayrolls’ had been appointed as my representative on taxation
I rang HMRC ( took 4 attempts and an hour in queue) and told them i had never heard of these representatives and they dont have my permission . the nice civil servant gave me some dates and it became clear that it was all relating to that single weeks work
The tax man told me that the tax methods used by these persons would result in me being given a punative tax code of 40% !!! And it would be up to these representatives to claim back
Happily the nice taxman sorted it all out and furnished new employer with correct tax code
I have been paid now for weeks work at basic rate minus £16
Beware of umbrella companies . you have to pay tax . get used to it .
I finished with umbrella companies last year when my accountant told me it was all a con. I told my brother and 4 other drivers about it but they all ignored it! I am on paye now. I know a few drivers who are running limited companies and disguising the driving as “courier services” then invoicing the agency. I will tell you now that is pure fraud and do that to the taxman you will get locked up nevermind about fines.
thanks for your input chaps