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Umbrella Company

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I've been offered a 1-day contract (not ideal, but i'm currently unemployed, so i've said yes) however, to get paid, I need a PAYE or Ltd set up. I've been told an Umbrella company is the way to go. … Read More
in$anity Avatar
7m, 4d agoPosted 7 months, 4 days ago
I've been offered a 1-day contract (not ideal, but i'm currently unemployed, so i've said yes) however, to get paid, I need a PAYE or Ltd set up. I've been told an Umbrella company is the way to go.

I'm totally new to contracting, so how can I get an umbrella company sorted? And is it going to cost me anything? I'm only going to earn £100 for the day.

Thanks
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in$anity Avatar
7m, 4d agoPosted 7 months, 4 days ago
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It won't be worth it unless you can get more work. I think you can use another companies umbrella company as an accounting process that they take a cut of, I suspect it'll be far cheaper & far quicker than setting up your own

I suspect a stand Ltd company would do it these can cost under £20 to get setup make sure you get one that includes all the paperwork articles of association etc.

Check out the requirements of filing returns with companies house because if you kiss a deadline the fines are huge, you also have to pay to file too.

Edited By: Rich44 on Dec 15, 2016 17:51: more info

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#1
It won't be worth it unless you can get more work. I think you can use another companies umbrella company as an accounting process that they take a cut of, I suspect it'll be far cheaper & far quicker than setting up your own

I suspect a stand Ltd company would do it these can cost under £20 to get setup make sure you get one that includes all the paperwork articles of association etc.

Check out the requirements of filing returns with companies house because if you kiss a deadline the fines are huge, you also have to pay to file too.

Edited By: Rich44 on Dec 15, 2016 17:51: more info
#2
Umbrella Corporation...? Avoid as zombies!
#3
hirschpiotr
Umbrella Corporation...? Avoid as zombies!
their guard dogs are a bit vicious too
#4
For one days work its not worth the hassle of signing up to an Umbrella Company (and for the record, they're a totally legitimate option for many people, they're not all bad). Take the PAYE option. This means the agency (or whoever is paying you) will become your employer and will deduct 21% (or thereabouts) to cover NI and employers NI from the LTD Co rate of pay. You'll earn less but it'll be a very very simple contract.
#5
Tequila1
For one days work its not worth the hassle of signing up to an Umbrella Company (and for the record, they're a totally legitimate option for many people, they're not all bad). Take the PAYE option. This means the agency (or whoever is paying you) will become your employer and will deduct 21% (or thereabouts) to cover NI and employers NI from the LTD Co rate of pay. You'll earn less but it'll be a very very simple contract.

Thanks! So what details will the agency need from me in order to make the payment? Just bank details and that's it?
#6
in$anity
Tequila1
For one days work its not worth the hassle of signing up to an Umbrella Company (and for the record, they're a totally legitimate option for many people, they're not all bad). Take the PAYE option. This means the agency (or whoever is paying you) will become your employer and will deduct 21% (or thereabouts) to cover NI and employers NI from the LTD Co rate of pay. You'll earn less but it'll be a very very simple contract.
Thanks! So what details will the agency need from me in order to make the payment? Just bank details and that's it?

Yes, only bank details where they can pay you.
#7
You can set up your own LTD for less than £10 these days.
#8
https://www.gov.uk/register-employer/y/no/no/no/no

You don't need to do anything of the sorts as far as I can tell. If the person you're working for is answering yes to any of those then go on their own PAYE thing
#9
https://www.gov.uk/register-employer/y/no/no/no/no

You don't need to do anything of the sorts as far as I can tell. If the person you're working for is answering yes to any of those then go on their own PAYE thing
#10
figure you know what you will do (PAYE) but another reason not to go self employed is you will (probably - rules are being changed on Class 4 or 2 NI or whatever it is ) have to pay National Insurance. It used to be about £3 a week
#11
most agencies don't do PAYE for contractors they're finding work for....that's the job of the Umbrella company. As most people have said it's not really worth the hassle for one days work unless you're planning on contracting again (for anyone, through any agency). Just Google Umbrella companies if you do plan to go down the contract route. Can't recommend any, they're all as bad as each other.
#12
The idea of an umbrella company is so that you are effectively self employed, with all the benefits. It's a cost effective way of doing this. The better companies that do this pay a higher rate - you are effectively a self-employed contractor. This means they don't have to pay holiday pay etc so pass that on the extra to the contractor (you).
The umbrella company simply deducts tax and national insurance and pays this for you. You don't get a tax bill or have to worry about accountants.
I used this method for payment when self-employed van driver through an agency. My weekly take home went up by £120 pw.
#13
If you're looking at just doing it for this contract, or think you would earn less than £20-£25k in this way, then an Umbrella company is the way to go. An umbrella company will take you on as an employee and process your pay, as everyone else has explained. However it is simple and a lot of the responsibility lies with the Umbrella company. If this will be a complete one off, you may end up paying more than the usual £15-£20 as Umbrella companies are unlikely to make anything from a one off.

If you think your earnings will be higher, than a Limited Company is the more tax efficient option and you will work out better off using this, however the cost and responsibility of running one is significantly higher, which is why I mentioned your expected earnings level.
#14
Correct me if I'm wrong but if you're currently signed on/job seekers allowance, to do 1 days work do you not have to get a P45 from the job centre and then sign on again with the usual 2 week wait
#15
japes
Correct me if I'm wrong but if you're currently signed on/job seekers allowance, to do 1 days work do you not have to get a P45 from the job centre and then sign on again with the usual 2 week wait

I actually don't know the rules surrounding that. I will try to find out! Thanks for the heads up!

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