As per title. I need intel. Any directions or links to get such information?
Are you looking to go into manufacturing them, or just selling? It’s certainly the right time of year to be getting into this!
I don’t understand the question.
Basically I need to understand how they operate and what they do.
Do they contribute to their employees NIC? Since an umbrella company is classed as an employer, do they give paid vacations etc? I think not but need to know their limitation.
I don’t think I know what an “umbrella company” is?
Googling the name just shows a bunch of companies. Nothing useful to me.
By “umbrella company” do you mean like Alphabet Inc., the company which holds all the smaller companies under it (such as Google, Nest, Firebase, etc…)
Did you look at?
That’s it. Let me have a read to see if it answers my question.
@LimeBlast Ive had a short scan through and it does answer my question. Thanks.
I’ve used OrangeGenie in the past (as an umbrella). There’s plenty of info on their site.
The reason why I ask is, I’m secretly building a webapp for an umbrella company. I’m in the field myself and would like to have other things in place. This is just a “toy project” at the moment but may become something meaningful.
What bothers me was that companies claiming 90% retention of salary which I found to be bulls**t. Unless they claim un-receipt expenses. But I’m working on something. My NIC calc is not 100% accurate. I have code to make it accurate but Im waiting on HMRC to confirm my figures using their formula.
Don’t forget employers’ NICs. I presume the 90% figure is post fee and employers’ NIC. Looking at my old figures, 90% is about right. (i.e. Slush, below.)
Basic umbrella co. calc is: Gross - Fee* - Employer NIC = Slush
Set aside expenses from Slush, so: Taxable = Slush - Expenses
Calculate Employee NICs + PAYE from Taxable.
Payable = Taxable - NICs - PAYE + Expenses.
- There are some tax free deductions that can be made here that they may or may not offer. Tax rules are complex.
You’ve probably seen it, but this site is useful for a quick view of the PAYE side of things: http://www.thesalarycalculator.co.uk/salary.php
WOW! Hold up! An umbrella company also contributes to the contractor’s NIC? Seriously?
My values are correct but the link with the formula, on page 8, step three, that is not included and Im asking HMRC why companies not adding step 3 but in their example (step 6) they’ve added step 3.
No, they don’t contribute. It’s a deduction against receipts. The umbrella company issues invoices on your instructions and therefore receive the payments. Since you are an employee of the umbrella company, then to pay you, they must abide by the usual taxation rules.
I remember umbrella companies becoming visible when IR changes made the advantages of running a Ltd. Co. less attractive, so contractors became employees of UCs. They were paid a salary related to the fees they earned, with the UC handling company stuff in return for a percentage.
Yes, they became more important with IR35. They don’t take a %age, though. Just a fixed fee. Well, I guess there might be some chancers out there. More fool anyone using them. Last time I used OG, the fee was £27.50 per week. Basically, per invoice.
For short term gigs (and for various tax reasons), it can be a cost-effective method. Heck, if you simply don’t want to deal with the admin of a limited company and the risks of the IR35 nonsense, then it’s pretty much hassle free self-employment. Kinda heroku vs VMs for tax
I did a bunch of work for 4 months with the NHS through Danbro. Submitted weekly worksheets, added on some subsistence costs and got paid by them. They took £20pw and paid Eer NI.
Seemed like a big pain to me.
Guess that’s what I wanna do.
Guess I’ll turn this into a questionnaire. How was the process in filling out the timesheet? Was it online? Anything you wanted to see?
Yes, everything was online. Timesheet and exs was simple enough. A bit of work (10 mins) for week one, as you’d expect, but thereafter it was just a click for “same as last week”.
For tech work, I’d say it would be too much, Contracts are generally complete weeks. That looks more like a timesheet system, which is a separate tool, imo. And geez, I’d hate to be clocking in and out. Depends on the business, I guess. For tech work, you just need a hours per day on a weekly basis.