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Umbrella Companies - what's the current position?

Discussion in 'Supply teaching' started by MathMan1, Aug 12, 2020.

  1. MathMan1

    MathMan1 New commenter

    I've been looking into registering with some agencies and I've seen on here various comments to the effect that many (all?) agencies mandate workers to go down the umbrella company route for wage payments.

    AIUI that's going to mean at the least a reduction in net income, along with more admin and form checking and will also make it more difficult to accurately calculate estimated net income per week.

    With that being so, what success has anyone had in saying 'no' to UC's and to require PAYE payment if working through the agency?

    The general consensus appears to be 'stay away from a UC', with the alternative that a workaround appears to be that if one's forced to take the UC route, then to hold out for an extra £20 or so per day to counteract the additional fines, whoops I mean, fees (am terrible with my keyboard sometimes!) charged via the UC procedure.

    Regarding subjects and locations, I'd be looking to take on Cover Supervisor or maths one-to-one/tutoring support roles in the Peterborough area.

    I'll read back on here to get the gist of what's been said previously, but if anyone's got any 2020 information I'd be pleased to hear it.

    Thx all.
  2. alex_teccy

    alex_teccy Star commenter

    Try to get your supply agency to employ you via PAYE. An umbrella company basically allows the agency to offload the cost of their payroll at your expense.

    Have you thought about approaching schools directly with your CV and covering letter? They can give short (3 month) contracts or longer!
    Happyregardless, blazer and MathMan1 like this.
  3. MathMan1

    MathMan1 New commenter

    alex_teccy likes this.
  4. MathMan1

    MathMan1 New commenter

    Yes, I'd looked at the numbers on their website and the deductions aren't good. That along with the fee they levy to provide this 'service' plus the suggested 'allowances' that temporary/contracting staff are allowed to deduct in their tax submissions suggest it's a good deal for you.

    Also, FWIW if anyone else is thinking about Umbrella Companies, if you check the agency's information that should state which UC they have a relationship with - a quick google of "review +name of Umbrella Company" will provide interesting reading... well it did for me with this one!
  5. alex_teccy

    alex_teccy Star commenter

    Yes. My memory of it is a bit sketchy but I looked into it and your much better off on PAYE. Something about being due for two lots of tax I think. It was a lot of hassle for no gain and benefitted the agency only.
    MathMan1 likes this.
  6. alex_teccy

    alex_teccy Star commenter

    That’s how I got out of supply. I sent my CV and covering letter to about 40 schools in my range.
    MathMan1 likes this.
  7. ajc89

    ajc89 Occasional commenter

    I used to lose £10 in wages when with an agency that used an umbrella company.... and because it was a second agency is double taxed... and the wage was less money for an afternoon slot over morning slot... never again!
    MathMan1 and alex_teccy like this.
  8. steviepal

    steviepal Occasional commenter

    I refuse to work with agencies that don't do PAYE. That's the first question I ask when approaching a new agency. Some phone conversations have been very short.
    MathMan1 and alex_teccy like this.
  9. steviepal

    steviepal Occasional commenter

    In quite capable of doing a tax return too. UCs are pointless for supply teachers.
    MathMan1 and alex_teccy like this.
  10. MathMan1

    MathMan1 New commenter

    Thx @alex_teccy - that sounds like that'll a sensible next-step, especially since I've already started a dialogue with a few from earlier this year, plus I've now got some actual in-school experience since first talking to them.

    @steviepal I'll still speak to the agency I've sent my details through to, just to 'clarify' what the adv/disadv of being paid via a UC will be for me. I've seen the T's & C's they require workers to sign which alerted me to this. In there they state I'll be deducted:

    * Employers NICs
    * Employer’s pension
    * Apprenticeship Levy
    * Holiday Pay (that I can have back, nice!?)
    * Umbrella Company Margin

    BTW just to confuse the issue somewhat, they dress up what they offer by calling it PAYE via a UC, but it's not PAYE in any way that the rest of the population would call it.

    Utter BS!

    = =

    As an aside, frankly, the benefits to the actual worker of needing to use UC's is fatuous at the least and total BS at the most. I've worked as a temp in the past in a variety of roles and I've only ever been paid through the simple PAYE weekly model - if it aint broke why try to fix it?

    UC's might perhaps be advantageous for high dayrate contractors or consultants, although judging from what I've read on forums they too have had numerous problems.
  11. catbefriender

    catbefriender Lead commenter

    Some agencies also get some of the commission on the fee you are paying the UC for sending their staff to UCs, so they could be getting paid three times: via the End Client, the Supply Worker and the UC.

    UCs always state that the benefit of having them, as a supply teacher is that if you are working for different agencies, you can use just one and save being emergency taxed. That's if the agency agrees. Remember, with some UCs, each contract you work requires a fee and this is where it gets tricky. A contract could be, all the work you do for one agency in one time period or a contract could mean in different schools/End clients. So if you do 2 x 1 day bookings, you pay 2 lots of fees whereas if you do 2 days in one school, one lot of fees. Fees varies from UCs to UCs.

    Always ask for the detailed, details. Whatever they tell you you will get eventually, deduct another £20 just to get a clear idea.
    MathMan1 likes this.
  12. catbefriender

    catbefriender Lead commenter

    But they are really useful to agencies and schools because they move the supply teachers even further away from their employment rights and schools and agencies from their statutory employers' liabilities. I mean if something goes seriously wrong in a school, who was the employer? The school? No. The agency? No. The UC? 'We've never met them! We just do their payroll!'

    As far as tax liability goes, UCs are deemed the employer by HMRC. But in every other aspect, the school and the agency can act as your employer when it suits them.
    Last edited: Aug 13, 2020
    MathMan1 likes this.
  13. MathMan1

    MathMan1 New commenter

    A 'trick' some contractors were hit by was that each day was invoiced individually, leading to 5 or 6 invoice fees per week, rather than one!
    alex_teccy and catbefriender like this.
  14. MathMan1

    MathMan1 New commenter

    Yes, that showed up in this agencies T&C's - too many ltd coys in the who does what for whom' section.
    catbefriender likes this.
  15. catbefriender

    catbefriender Lead commenter

    Good luck in getting direct employment from a school. :)
    MathMan1 likes this.
  16. MathMan1

    MathMan1 New commenter

    Straight quote from https://www.orangegenie.com/umbrella/refer-friend ...

    "Earn a £150 bonus for each referral!

    We know, the chance to rescue your friends from that shark-infested Google search is reward enough for a hero like you, but we want to thank you anyway.

    That’s why we’ll pay you a bonus of £150, once your friend has worked for us for 3 months.

    This applies to every referral – there are no limits!"

    That's for a one-off deal - for an agency, who could consider mandating all new workers to use another UC, well, I'd assume there's going to be a regular sweetener coming there way.

    If it's like most other industries it's going to be geared upon net billings or suchlike or days or headcount - afterall, agencies don't do anything out of a good heart, do they?
  17. MathMan1

    MathMan1 New commenter

    I honestly don't know whether your comment's meant positively, doubtingly or sarcastically - so I'll simply say, "thanks for that".
  18. catbefriender

    catbefriender Lead commenter

    That's for referrals made by supply teachers to other supply teachers. Some agencies get a percentage of the fee/commission UC's get i.e. the the supply teacher pays, and it's a lot more than £150 over 3 months. Notice they haven't explained what 3 months actually means in working days or hours. UCs are absolute Masters of Vagueness.
    MathMan1 likes this.
  19. catbefriender

    catbefriender Lead commenter

    I genuinely mean good luck. You may get beyond the idiot who opens the post/email, and your CV and covering letter may actually get to the Head of Maths or the HT! There are a lot of speculative applications that simply get deleted or binned which neither ever see.:(
    MathMan1 likes this.
  20. MathMan1

    MathMan1 New commenter

    - thx for that - subtleties are lost on here sometimes - IKWYM re the hoops to be jumped through.
    catbefriender likes this.

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