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Umbrella Accountants

Discussion in 'Supply teaching' started by JeannieSimpson, Aug 24, 2015.

  1. JeannieSimpson

    JeannieSimpson New commenter

    Does anyone have any advice or recommendations re:umbrella companies please? The only thread I can find on here is pretty old and I'm wondering (hoping) if things have improved since then.
     
  2. pepper5

    pepper5 Star commenter

    Hi JS

    The last time I remember reading any threads on here about umbrella companies was about a couple of months before the summer term ended, so those are going to be recent. Perhaps you need to have a further search. Much has been posted on here about them.

    The legal issues are complex regarding the way umbrella companies operate and I won't write about those issues here; the main thing you need to know is that you will be worse off in connection with your pay since not only will you be paying income tax and national insurance contributions, you will also have to pay employer's national insurance contributions and an administration fee for the privilege of being paid.

    The long and short of it is to insist upon being paid PAYE and if the agency will not do that for you, politely take your business elsewhere and find and agency that will; or failing that, contact schools directly for work.

    Some may argue that they are in fact better off in terms of pay since they claim back certain expenses such as travelling and lunch against their tax liability, but that does not get around the issue of the legality of these companies, their methods and whether or not ultimately the tax man will come after you one day for unpaid tax.
     
  3. WaylonWu

    WaylonWu Established commenter

    What Pepper 5 has said is true. It's far better to be paid PAYE rather than through an umbrella company. There have been several threads on here about them and you will find that the majority of teachers advise steering clear of them. Many of the so-called 'benefits' such as claiming for traveling, transport etc are not strictly legal and will probably not be accepted by the taxman regardless of the claims of umbrella companies.

    I notice you call them accountants. They aren't accountants in the usual understanding of the word, only in the sense they will account for what your tax deductions are, and then not always accurately, i.e. there will be spaces on the timesheet for claiming for traveling etc, this will be deducted from your tax bill by the umbrella company but you may have to pay a bill from the taxman for these items. So in the end you are worse off when taking into account the payouts mentioned by Pepper 5. These companies exist only to make a profit for themselves out of supply teachers and other workers and to save agencies from paying Nat Insurance. They have no other purpose.
     
  4. Fraccy

    Fraccy New commenter

    [Can't delete this post!]
     
  5. Fraccy

    Fraccy New commenter

    The best supply agency (for jobs!) that I joined had no PAYE scheme, refused to pay me as a self-employed teacher, and insisted that I join an umbrella company. I did my due diligence and thoroughly investigated a bunch of umbrellas. Looking past all the slick advertising, each one seemed like a scam.

    The agency gave some ridiculous excuse about self-employed teachers no longer being allowed, by law, to work in secondary schools. Finding nothing of the sort in legislation or government guidelines, I challenged them, but they refused to budge.

    I've found other agencies also won't touch self-employed teachers.

    I tried contacting HMRC for clarification: three months later, no response. And nothing either when I complained to my MP.

    So - last resort - I formed my own limited company. It took less than half an hour on the Companies House website. I invoiced the agency and was paid immediately. (Accounting will be more convoluted, but I absolutely dare HMRC to try to fine me for any mistakes...)

    The reality is that it's almost anarchy out there - you have to look after yourself. There seems to be a huge cloud of uncertainty over the status of 'self-employed' teachers. But a limited company is your own 'umbrella' - one that you have full control over.
     

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