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Which umbrella company are you with?

Discussion in 'Supply teaching' started by MathSci, Dec 7, 2015.

  1. MathSci

    MathSci New commenter

    Giant? RACS? My Key Pay? Nasa? Any other? Are they all rip off companies? How do they process your pay? How can I get the maximum net pay? Please help!!
  2. Twinklefoottoe

    Twinklefoottoe Senior commenter

    Set up your own Ltd company and contact schools directly. Never use agencies, unless you are happy being ripped off by snotty, spotty twenty something graduates, who think they are God's gift. Search the supply forum. It's been discussed many times.
  3. pepper5

    pepper5 Star commenter

    Hi MathSci

    If you don't get any response by contacting schools directly and you find yourself having to use agencies, only use ones that pay PAYE. Insist upon it and if the agency won't pay you PAYE find an agency that will.
    PizzoCalabro likes this.
  4. teacha

    teacha Occasional commenter

    You get the maximum net pay by NOT going with an UC and being paid PAYE. UCs take out two lots of NI contributions ( employer AND employee) and THEN they charge you a fee for doing so!
  5. PizzoCalabro

    PizzoCalabro Established commenter

    Well said Pepper - is very naïve to think that agencies would have schemes in place that benefit you - is all for them.
    Was at a large school today that uses lots of supply teachers from several agencies - and chatting to another supply teacher from another agency, but who like me, is an 'older person' who regularly gets asked back to this same school so we often see each other. We were cackling together in a corner about agency tricks. We do not get scammed into umbrella companies.
  6. Fraccy

    Fraccy New commenter

    We (some software developers and I) are working on a system that will solve this problem once and for all. Like: no more agencies or UCs. More news hopefully soon!
    Pippapee likes this.
  7. lanokia

    lanokia Star commenter

    Sorry, probably a bit of a stupid question but...

    OK, I've signed up with two supply agencies. One uses an umbrella company, the other doesn't.

    What's the difference?
  8. lilly100

    lilly100 New commenter

    What can anyone tell me about RACS?? I'm new to supply and my agency use this as their UC.
    RACS told me I claim for my travel expenses. Is this true? After reading the posts on here I'm beginning to think I've made a mistake.
  9. GLsghost

    GLsghost Star commenter

    Encouraging workers to claim travel and subsistence was / is still a strategy used by some umbrella companies to reduce their employers' NI contribution liability. What they are doing is getting you to claim travel / subsistence (to the HMRC max of £5 a day) and then effectively dividing your daily pay into (say) 90% for your teaching and 10% travel and subsistence. It is not lawful to claim this unless you actually spend that each day.

    The Chancellor's Autumn Statement has (rightly IMO) outlawed this from April 2016. Because of the nature of their work, agency teachers are almost certainly covered by IR35 ("supervision, direction, control") and will no longer be able to claim. If an umbrella company proposes it, it is a simple matter to be a jump ahead and decline, telling the company that you know it will not be lawful after April anyway!

    Here I have reproduced comment from the Professional Contractors' Group on this matter:

    "Tax relief for travel and subsistence expenses

    Another widely anticipated change was regarding umbrella company employees and limited company contractor’s eligibility to claim tax relief on travel and subsistence expenses.

    Whilst the Chancellor did not make reference to this in today’s speech, the Autumn Statement documents confirm that from 6 April 2016 the government will legislate to restrict tax relief for travel and subsistence expenses for workers engaged through umbrella companies. The details we have today do not confirm what criteria will be used to restrict the relief nor where the liability for non-compliance lies. We expect further details on 9th December when draft legislation is published. We would however expect that expenses will be restricted for umbrella employees who are under the supervision, direction or control of anyone in the supply chain.

    HMRC’s original proposals were to extend the restriction to claim travel and subsistence expenses to limited company contractors. Following feedback received during the consultation period, relief will only be restricted for limited company contractors who are captured by IR35. As a result, the majority of Brookson’s limited company customers will not be impacted by any restrictions on their ability to claim tax relief on travel and subsistence expenses. We are again pleased that HMRC have listened to ours and many other parties’ concerns regarding their original proposals."
  10. snowyhead

    snowyhead Lead commenter

    @lanokia. Now that your confidence has returned I would contact schools directly, cutting out the agencies. I plan to do this from January as I shall be LEAVING my current post at Christmas, a move which was long overdue!

    I plan to create an @TheoGriff style Executive Summary of my teaching experience and achievements covering the past tens years. I will post this to prospective schools within a certain radius of home (haven't decided quite how far I want to travel yet) together with a breakdown of the costs I will charge schools for daily or longer term assignments (a 'Terms & Conditions' if you like) - I envisage becoming self-employed, but will also entertain the possibility of being employed by schools too. I registered for the DBS up-date service when it was first set up a few years ago and fortunately have kept up the subscription, so that's another string to my bow.

    Go for it!
  11. lanokia

    lanokia Star commenter

    Interesting concept @snowyhead and one I've seen mention of elsewhere. Definitely one to think on.
    snowyhead likes this.
  12. Alan11475

    Alan11475 New commenter

    My agency has secured me a long term placement starting Jan. I'm not keen on the percentage my agency, key portfolo, take so I asked about going on PAYE with the agency. I was told it was possible but they say I get 5% extra wages to cover the umbrella fee and thefore would lose 5%. This does seem accurate as I do get far above the MPS but does anyone have any companies that charge a lower percentage? thanks!
  13. PizzoCalabro

    PizzoCalabro Established commenter

    Just insist on PAYE, or walk.
    I work directly for schools and they pay me PAYE, no quibble.
    You do NOT need to set up a company to work directly with schools.
  14. Jolly_Roger1

    Jolly_Roger1 Star commenter

    Sometimes, I wonder if I live in 'alternative world' to some people on here. I tried sending a @TheoGriff -style executive summary to all the secondary schools within a ten miles radius and got only two replies, both negative. The only 'jobs' agencies ask me about are either miserably paid, or unpaid.
  15. TheoGriff

    TheoGriff Star commenter

  16. SARAHC3

    SARAHC3 New commenter

    I've heard that from the new tax year in April people who are employed by umbrella companies will no longer be able to claim travel expenses. This will impact on supply teachers.

    This change is being introduced from the new tax year. Can anyone confirm this?
    GLsghost likes this.
  17. GLsghost

    GLsghost Star commenter

    I can confirm this is the case.

    The travel expenses thing is a currently lawful but slippery scam operated by some umbrella companies that enables them to pay less employers NI contributions than they should - a loophole that enables them to deprive HMRC of money that should be paid to them.

    The umbrella company encourages you to claim travel expenses and subsistence to the HMRC threshold of £5 per day so that, effectively, you are being paid (say) 90% of your daily rate for the actual job of teaching, with the rest made up of expenses. They then only have to pay HMRC employers' NI on the 90%.

    Somewhere, if I can find it, I have an article on this. I may even have posted it on the Supply forum of WD before - a month or so ago. I can't remember whether I did or whether I emailed it to someone.
  18. GLsghost

    GLsghost Star commenter

    :D DOH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    I can see the article is posted a little higher up the thread!!! :D
    Yoda- likes this.
  19. nearmiss

    nearmiss Lead commenter

    If you can bear to slog through the HMRC consultation document from September 2015, you will notice that no mention is made of agencies in the education sector but we assume that sui generis the new restrictions could well apply to them.

    What we don't yet know is if the new regulations will be implemented with immediate effect after the April Budget or will require a change to legislation which could take years.
    I would advise caution here.
    If you are being paid via UC and you suspect that you would be paid more via PAYE, a precedent now exists under law for a union to act on behalf of an individual member to sue the UC. http://www.ucatt.org.uk/ucatt-umbrella-company-tribunal-victory
    This was in the building trade sector but the principle of law is the same.
    Don't wait for the Chancellor's statement.
    The aim of the changes is to reduce tax evasion. For consultants in some business sectors, UC payroll is greatly to their advantage as they work away from home, living in hotels and travelling thousands of miles over the course of a year so the tax offsets run into five figures. I suspect that the reforms will be stalled by appeals from these much more highly paid sectors.
    Supply teachers do not incur anywhere near that level of expense and would in most cases be better off with PAYE. Send your payslips to your union and ask them to calculate the difference in the mean time.
    Teachers are not this Government's priority.
    The teaching unions cannot issue any guidelines as yet as the exact wording of the new regulations and the time frame for their implementation have not been announced.
    lou5357 likes this.
  20. Yoda-

    Yoda- Lead commenter

    This seems to confirm the change.

    • Autumn Statement 2014 announced that the government would review the growing use ofoverarching contracts of employment that allow some temporary workers and their employers to benefit from tax relief for home-to-work travel expenses, relief not generally available to other workers. This is unfair.
    • As a result of the review, the government will change the rules to restrict travel and subsistence relief for workers engaged through an employment intermediary, such as an umbrella company or apersonal service company, and under the supervision, direction and control of the end-user. This will take effect from April 2016 following a consultation on the detail of the changes. It will level the playing field between employment businesses that seek to lower their costs by using these arrangements and those that do not.


    Will it happen on time in April?
    No one really seems to know...

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