Umbrella Companies...Info needed!

Skinfull

This might be the wrong place...

A job offer has been made, but the hiring company asked that I be self employed, either my own Ltd company, or work under and Umbrella Company. I've been self employed in the past for about 8 years and I don't want to go down that road again, as I am still feeling the ramifications of the effect it has had on my tax status and stamps etc. SO I'm leaning towards an Umbrella Company, which is basically, as I understand it, a company that do all the work for you in relation to being a Ltd Company, and you can be an "employee" of that company so you retain your full tax status.

So I'm looking for voices from people who have worked with Umbrella companies. What's your experience like? Not just while working with the company but after it, P45, P60 etc.

CompanyBureau

I haven't done it personally, but it seems to work quite well from what I've heard. My brother did it in the UK. It's a strange concept though being a director and shareholder of a company with complete strangers!

srsly78

Sit down and do the maths. You will pay more tax with an umbrella company, they will make you pay employers prsi contribution as well. Note UK law is COMPLETELY DIFFERENT - do not pay any attention to what goes on there (IR35 etc). I actually work in the UK through my Irish company, and the uk guys I work with say I have big advantages over them. If you use an Irish umbrella company you will NOT be a director. Also do not get tricked into using an "offshore off-the-shelf" company, you will either a) get robbed, or b) get done for fraud.

As for stamps, these run out in about a year. You can get dole without stamps anyway, it's just means-tested then. "Self-employed people can't get dole" = misleading... you just gotta stop trading then you can get it.

Best (most tax efficient) solution = set up ltd company. Pay accountant to sort stuff out.

If you aren't earning much money, or won't be contracting for long then it's not worth setting up company. If you earn > e50k then setup an ltd company I would say.

Fuctifino

If you are employed in Ireland, and earn 60k p.a.; You pay almost 50% in tax.

What are the downsides (if any) to setting up a LTD company, and invoicing your employer at the same rate, and paying only corporate tax on your earnings?

If not, why don't more people do it?

srsly78

Loads of people do it, you would be nuts not to.

You don't pay any corporation tax, coz the company doesn't make any profit - you pay it all as salary. It's more efficient coz directors don't pay extra prsi. Also as a contractor you get paid more anyway. Also you can avail of an executive pension/health scheme of your own choice (pension is what can make things extremely tax efficient, nevermind the actual performance of pension funds etc). I use a room at home for an office, thus my company can legally pay a cut of the rent and bills ( = expenses = more tax efficiency).

I worked internationally for a few years, as a normal employee in different countries. My tax situation was a complete mess afterwards... Never gonna do that again. I only operate through my own company now, and I sort my own tax out.

The downsides are the initial annoyance of getting it started, and having to file VAT returns and P30s and so on. This is actually really easy once you know how, with the ROS system and so on. Good accountant helps a lot.

TheCostumeShop.ie: Ronan

I think this is a common thing with Pilots in certain airlines. The advantage is an employer can let go a contractor much easier than an employee. The subcontractors have their own business and as such can run corporate expenses but are responsible for all tax and legalities. As such I would strongly recommend seeking professional advise on the matter. Usually companies who recruit like this wont give you the opportunity to become a PAYE employee on their books, so it may be a take it or leave it situation but dont go into it with your eyes closed.

srsly78

Yep. My housemate is Ryanair pilot who operates like this. Also very common amongst software developers.

Fuctifino

I genuinely don't know who was talking to me there lol!

Gonna start a new thread

Skinfull

srsly78 wrote: »

Loads of people do it, you would be nuts not to.

You don't pay any corporation tax, coz the company doesn't make any profit - you pay it all as salary. It's more efficient coz directors don't pay extra prsi. Also as a contractor you get paid more anyway. Also you can avail of an executive pension/health scheme of your own choice (pension is what can make things extremely tax efficient, nevermind the actual performance of pension funds etc). I use a room at home for an office, thus my company can legally pay a cut of the rent and bills ( = expenses = more tax efficiency).

I worked internationally for a few years, as a normal employee in different countries. My tax situation was a complete mess afterwards... Never gonna do that again. I only operate through my own company now, and I sort my own tax out.

The downsides are the initial annoyance of getting it started, and having to file VAT returns and P30s and so on. This is actually really easy once you know how, with the ROS system and so on. Good accountant helps a lot.

Great, thanks for all this. I was leaning towards an umbrella company but I might do some research with an accountant beforehand. Thanks a million.

mullanp2

Hi,
Hope this is the right room.
I recently came across www.unifiedsolutions.us who claim to be legit.
Just wondering if anyone came across them before or their methods of retaining 85% of your contractor rate.

thanks

Lombardo86

Would anybody care to share companies they have used that were ok? Looking to do something similar to the above..