Ok... This barely makes sense to me but I hope someone with experience of this sort of thing can help me out here.

So... I'm moving jobs and just secured my first contract through an agency. Now.. the agency is offering to pay me £7.25 / hour through the agency (PAYE), or £8.64 if I go through my own company or umbrella company. I don't want to be messin' about setting up my own company so I'm lookin' at the Umbrella option.

With the pay rates detailed above is it worth it? (37.5 hour week). What do the Umbrella companies charge? How easy are the Umbrella Co's to use? Is it gonna involve loads of messing about?

I'd also want about 20 days holiday and understand these wouldn't be paid by an Umbrella Co. I wouldn't have any expenses to reclaim tax.

Basically all I wanna know is which option; Agency PAYE or Umbrella Company, is gonna fill my wallet more?

Cheers:thumbsup:

P.S I know this might not be the best place to enquire about this kinda thing but to be honest I'm a bit stumped with it all.

Bloody hell what a nightmare :loopy:
Whatever happened to the days of straightforward employment :huh:

Unions may (arguably) have become a little too powerful/demanding in the 70s but it sounds like we need them back.....

why can't you be self employed?

If it's just you, and no stock to handle for instance, you'd probably be better off that way.

Ring the tax office and ask for a leaflet about it, before you sign up (but it's all probably online anyway) Edit: http://www.hmrc.gov.uk/selfemployed/

It cost me £60ish to give a heap of invoices and other junk to an accountant to do my tax return for the year, without me really keeping any of it in order. How does that compare to your umbrella company rates?

I've been told I can only be paid through either setting up my own Limited Company, or through an Umbrella Company. Doesn't look like I could be self-employed on this contract.

Can any of the daytime forumer's offer any advice?

Alarm bells ring in the Sheffield IR35 and Composite Service Company teams!!

I have PM'd the OP with a link to our pages re this sort of thing.

Alarm bells ring in the Sheffield IR35 and Composite Service Company teams!!

Some of the umbrella companies aren't actually trying to get past IR35, they just do the Tax/NI for the contractor in exchange for a fee, which is cheaper than setting up a company and paying an accountant. If he uses one of these then there shouldn't be an issue.

There are other such companies which claim to get round the issues with IR35. Some of these appear to manage it, but I would expect a bill at some point in the future when the revenue catch up with you. If you have been offered the choice of a job as an employee or as a contractor then you are exactly the sort of person that IR35 applies to, a textbook case in fact!

There's nothing dodgy about it. I'll come under IR35 as I'll be in the same place of work on the same contract everyday. The umbrella company is supposed to deduct all my tax and NIC's........ shouldn't they?

There's nothing dodgy about it. I'll come under IR35 as I'll be in the same place of work on the same contract everyday. The umbrella company is supposed to deduct all my tax and NIC's........ shouldn't they?

There are companies which operate in a way designed to get past IR35. If they are designed purely to avoid tax then they will eventually get stopped even if it takes a clause in a finance act. There are ways you can legally get around IR35 such as getting together with like minded people to offer your services to a number of companies in a way where the client might get a different person if you are off for the day. If you have multiple people who might attend a customer and you have multiple customers then you are not just a contractor. Some umbrella companies use this mechanism, artificially, to try to get past IR35 but the test is always whether you are only in that company in order to avoid tax rather than for other good commercial reasons. If your "employer" only wants to see you and won't accept a replacement then you are really an employee by another name.

There are companies which operate in a way designed to get past IR35. If they are designed purely to avoid tax then they will eventually get stopped even if it takes a clause in a finance act.

Aren't those composite companys rather than Umbrella company's?

I've been looking at this OrangeGenie. Looks to be pretty reputable. I'll give 'em a call and investigate properly.