Contracting / umbrella company switchover

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So i decided to have a look around at other umbrella companies, and i found one which offered a service, local to me in Bristol for £9.99 a week admin fee - went into their little shop to speak to them and find out more, sounded good, staff were nice, very genuine and they seemed interest in my business - and also it was alot better than paying £28 a week!

So i call my agency, and ask to switch provider to them instead of Parasol who i was with, and they said "No"

They only work with a select group of 6 umbrella companies, and they all charge £25 upwards per week as administration fee.

Does anyone else have this problem with contracting where the agency limit who they work with?

 

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I had this issue a few years ago, and ended up having to stick with an umbrella company which wasnt i didnt prefer (took weeks for them to pay me for no real reason), it would be worth checking your contract with the agency to see if they cover this as part of the contract, if not I would seek advice from maybe the CAB or one of the contracting message boards.

I personally believe that these agencies are receiving money or backhanders for this preferential treatment (something which an umbrella company worker said went on).

My advice is to either find a new role, ride it out this time with the umbrella company you have and then the next agency you deal with insist on using your own umbrella company (get it in writing) or move to full time employment.

 

Yep i agree i think they're receiving money for it too.

I'm ok to ride it out, contract ends this November, so a fair few months away yet, the pay I'm getting isn't so bad that the admin fee affects me, but it's just in principle the amount they charge, when a local small business who'd appreciate your business more charge alot less, and they limit as to where you can go

 

Hi All,

I work for Parasol so I am not impartial but I can say that we do not offer incentives for recruiters to include us on their PSLs. Some umbrella companies do but we do not.

And no one can force you to work with any particular umbrella company, you should be free to come and go as you please.

If you decide to move on (and we sincerely hope you don't!) please ensure that the umbrella you move to is offering you a full contract of employment. Otherwise you cannot legally claim to have your expenses offset against your tax bill. Also make sure that you have access to their HR support team and are offering you the full statutory employment rights.

I've pasted a link to an independent umbrella checklist below. This includes the types of questions you should as any umbrella company before you sign up to them.

Hope this helps.

http://www.contractorcalculator.co.uk/Umbrellas.aspx

 

Hi Steven, thankyou for these comments.
From what I remember parasol where quite a popular company 3 or so years ago, im not sure what the market is today, but appreciate your honest comment.

As a contractor in the past I was put in the same position (with a different umbrella company), and tbh the agency I worked for were insistant that they had this right, despite my regular company being fully compliant and could prove this, so maybe you should inform your clients that this isnt the case (Agencies should remember that contractors are also equally important in the equation, from my experiences this didnt seem to be the case).

Im sure this attitude of some of the agencies also could be classed as a restriction of trade which is against EU law, I was tempted to push this but it was for 3 days work, which took the umbrella company I didnt want nearly 4 months to pay.

That incident put me off contracting to be honest.

 

That incident put me off contracting to be honest.[/QUOTE]

I think this lack of transparency has cost the industry a lot of talent over the years. The last few years though have seen a step change in compliance etc. Plus, the forthcoming bribery act is going to put a stop to a lot of the bad practice that occurs when recruiters compile their PSLs (eg offering incentives for referrals)

A PSL is supposed to protect contractors and recruiters from dodgy umbrellas after all!

 

Agreed, might rejoin the industry in a few years, but am happy with the way full time work is going.

Apart from the extra taxes.

 

Thanks for the response Steven,

My gripe is more aimed at my agency rather than the umbrella providers themselves. out of all 6 the agency work with, fee's were £25 (at the lowest) where as a local shop near me offered the exact same service, for only £10 a week, it's a £780 a year saving, so it's not just a few quid here and there. Unfortunately i'm still stuck in the same position that i cannot support a local family business in my area, and my agency literally force me to pay these fee's - the other alternative is i find a new job under a new contract with a different agency basically, as i can't go full time in my current role just now.

 

Completely understand,

Just to play devils advocate, your agency might be pushing these companies in order to protect both you and them. So they may have taken into account the levels of insurance the umbrellas offer, how compliant they are with legislation, etc.


The fee you pay for an umbrella company also counts as a business expense so you can offset it against your tax as well.

So for example our fee is at the top end of the market but when the tax is deducted it comes in around £16.

 

So that'd mean the other company would only be like £6!!

lol only playing - nah i get where you're coming from, and the offsetting of expenses against tax is nice ( Working in germany at the moment, so not claiming a thing but company is paying for all )

But hey, i have a job, and in this current economic climate that's all i can ask for right now, so i can't grumble too much

 

I used Parasol for years and thought they were great, the only reason I am not using them now is that I have been a client of Paystream since 2005 (when I moved back to the UK, I stopped using Parasol back in 2002 when I left the UK) when I started working with a company that was closely linked to Paystream back then (Rullion I believe helped set up Paystream although I now believe that they are different companies).

Over all as long as you're happy with the service you're getting from them then they are doing the right thing for you.

As far as Agencies are concerned, it's actually up to you who and how you do this, as long as the umbrella is fully compliant with UK legislation then your agency really can't say no to you (after all they would work with you as a Ltd Company with no history, why not with an umbrella??).