Umbrella Companies??? Your thoughts

[Ivans]

Hi Guyz

I work through 3 teaching agencies, one of which, I get paid via an umbrella company called JSA (the other two, I do not)

I've been invited by one of the other agencies to have all my wages paid via Key Pay which means, in effect, I would be paid by Key pay via all 3 agencies.

I was wondering if this is a good thing to do and I would welcome any thoughts (positive or negative).

Ivan

[janeb]

Apologies in advance as I'm not very good at this financial stuff but my initial thoughts are...

Would you still get the same amount of money (i.e. no commission to pay)?
It sounds like it would make the tax part of working for 3 agencies less complicated - my tax returns take ages as I have a complicated week!

Sorry, that's all I've got!!!

[NuttySupplier]

If you're good at your own paperwork/tax, don't pay Key Pay to do it for you! I think that's what it boils down to...

[Mister]

Key Pay allows you to claim expenses for things like travel, food, & using your home as an office. But then they make you pay EMPLOYERS' National Insurance, which pretty much wipes out all the benefits of of those expenses. So it sounds like you're getting more, but what they give with one hand they take away with the other. And it's an extra job at the end of each week to claim those expenses.

I rather resent paying Employers' National Insurance. The agency takes a big enough cut from our wages as it is. The only saving grace is that so long as you claim your expenses you're not actually worse off.

[Ivans]

Thank you for your input

Ivans

[supply123x]

Ivans

Dont do it

This (in blue) is one of my posts on the TES forum:

Beware of third
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pay
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processors (known as umbrellas) - what they are telling you is illeagal regarding claiming travel expenses.
They are very, very good at convincing you - dont be fooled - thay claim to have authority from HMRC - they dont - they use generic terminogy(applies to everyone).

This is my initial post from an earlier thread:



As an accountant and supply teacher I have come across a number of supply teachers who are operating as a limited company/self employed/umbrella company and saving tax.

I have looked into to this in great detail and would strongly advise against it.

Re: claiming mileage/expenses to reduce your taxable income look here:

HMRCdotgovdotuk- EIM70755 in the seach box. You CANNOT claim expenses - read it carefully.

Re operating as a limited company (known as an intermediary) and paying dividiends (no nic) instead of salary look here:

HMRCdotgovdotuk/ir35/responsibilitesdothtm

Again - against regs/the law.

HMRC investigate people as and when they can. They are stretched - so a number of teachers are getting away with it at the moment. The current govt are keen to look into this sort of thing - this is tax evasion - breaking the law!

I can point you to other blogs/website etc... just let me know through here.

Being investigated would result in backtax, penalty. Not to mention the stress and cost (you will have to pay an accountant to help provide what HMRC demand of you - attending interviews, providing paperwork etc)

I have had clients in the past who have sufferd high blood pressure etc... Its not pleasant. HMRC are not pleasant to you if they feel you are trying to cheat them.

The accountant/provider/umbrella etc dont care , they wont tell you this - they are only after a fee. The buck will stop with you as far as HMRC are concerned.


My friendly/free advice - dont do it - be an employee on paye. You may be storing up trouble.
Dont believe a word of umbrella companies and the like - tell other teachers the same.



See this link to the whole thread on the TES website where I have been posting.


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prob - search 'umbrella corporations' on tes supply teachers forum)

Its exploitationa and a scam - beware.

If you would like to discuss further - let me know on here - spread the word to other teachers.

Rgds

[Offshore-teacher]

Thanks for the timely advice, which I've also seen on TES and which is the same as my union rep's advice.

However, I'm now left with a bit of a dilemma - one that could be quite costly.

I'm about to be made redundant from a permanent, full time job and was offered a few interviews by agencies who said they'd sort out expenses and accommodation for me to visit the UK for interview.

It was only when I got to London and met them that they told me about the umbrella company and the "receipts for expenses" I'd been told to keep, were so I could offset the tax from my wages, rather than have my costs re-imbursed - naughty! (They also expected me to "live" in a backpackers' hostel - fine if you're travelling, but totally impractical when working as a teacher!

I have refused to work through any umbrella company, so I have effectively turned down work, so could anyone tell me if there are any agencies that a) get teachers jobs and b) don't pay via umbrella companies?

I'm ideally looking for another full time, permanent post, but would consider a long term supply as I don't wish to be travelling to and from the UK for odd days - it's not financially viable.

Thanks.