What You Should Ask Umbrella Company Providers
If you have decided to go self employed or thinking of going self employed in the oil and gas industry and wondering which umbrella company to use or if indeed you want to go down the umbrella company route, there are lots of providers around who all claim to offer the best service for your needs.
Below we check out some essential points for you to consider when you are choosing a potential umbrella company service provider.
Only think about reputable PAYE umbrella businesses. Before you start, it is necessary to recognise that the only way PAYE umbrella firms can compete with each other is on rate (the regular weekly or regular monthly charge they charge as specialists), and also customer support.
And importantly, whatever advertising and marketing info you might read, they can all only reclaim the expenses of properly incurred costs (directly via the umbrella for things such as fuel mileage insurance claims, or via your yearly self-assessment income tax return).
Other non-PAYE umbrella-type systems might promise you huge returns on your contracting earnings such as 85% take home pay and sometimes more.
However signing up with one of these systems can open you up to a future HMRC investigation where you could incur severe penalties and significant backdated tax obligations, so we always recommend contractors to stay with just trusted PAYE umbrella schemes.
Please note that HMRC are really against contractors because of the high earnings but lesser TAX payments compared to being a full time staff employee.
In very short, the taxman likes chasing oil and gas workers as there are usually a lot of tax not being paid which makes oil and gas workers easy pickings from the tax man!
So, exactly how do you find the most effective umbrella provider
Below are several of the major questions you should bear in mind when evaluating umbrella companies:
- What is the umbrella company margin (ensure you evaluate like-for-like, i.e. what is the gross charge per week or month). Commonly umbrella companies show their costs on a post-tax basis, which might be misleading. Be careful of firms that bill a portion of the billing value, as you might find yourself significantly out of pocket!
- Discover as much history as you can about the company; when was it established, is the company a member of any industry bodies, what is the amount of contractors does it represent, and so on
- What type of technology does each company use to take care of invoices, payments and timesheets. Preferably you would certainly have access to an user-friendly online accountancy portal system to ensure that you can search for the condition of your timesheet entries and also expenses insurance claims in real time.
- Will you have a named account manager that will know your requirements? Will they be a trained accountant or just a customer service person? This is always preferable.
- Are there any kind of added fees, such as signing up or leaving costs?
- What has the umbrella system done to abide by the Company Employees Laws, which supply extra rights for temporary workers following 12 weeks on assignment.
- How are payments made, as well as what is the settlement schedule? Does the umbrella provider charge you for same-day transfers? Historically, some plans have billed extra for payments made via CHAPS, however the arrival of FP (Faster Payments) means that many major financial institutions can make and also receive repayments on the very same day, for no added cost and you should not pay extra for this service.
- The most important factor is….Will you be dealing with a trained accountant and or a customer service representative who reads from a script…
We hope this article helps you make an informed decision on picking a solid and reliable service provider to set up and run your umbrella company.
In our experience the most important factor for you to learn and understand when you are contracting in the oil and gas business is, never ever spend your tax money!
– This may sound logical but you will be surprised at how many people make this mistake and it will cost you greatly in the future. Always leave more in your account than you are told, always cover yourself and ensure there is money in your business account.