Umbrella / payroll companies

i work , paye , for a medium sized decorating company. we have been struggling for the last year (who hasn't?) and the time has come for radical change. we have been told we have to go self employed but can still work for the company using a payroll agency/company. basically we put in our time sheet as normal , our company pays the "agency" who then pay us minus the usual self employed deductions. we loose our holiday pay but gain from less tax and ni and possibly get a rebate.
not too worried myself as i just want to work and continue earning.
anyone else using these companies ,in particular NoPalaver based in milton keynes?
cheers
phil

So what happens say in a months time if company goes bust what happens re redundancy payments etc is that all lost. I would be seeking proper industrial law advice

i used one briefly when doing agency work, i had to pay a "fee" to the umbrella company each week to manage my account, the tax benefits were quite good, ie £0.40 per mile for all work related travel, but as said by others, no work no pay, and no redundancy, so i would be very reluctant to give up being an employee to go self employed, if you have to be made redundant then so be it in this current climate, then go self employed, but if your boss wants you to go down this route to save him money then i cant see the benefit for you, how long have you worked there?

down sides
no holiday pay /no sick pay /reduced or no pension /no security /no redundancy
no hours contract/ no loyalty/management fees simmilar to reduced tax

up side

you choose which off the reduced hours you take off for nill pay



never ever sign a new contract without advice

never walk, always be pushed..
they can't get rid of you withour paying redundancy and cannot force you to go self employed..
if the works still there for them to be able to use you as self employed then te works still there to keep ypu employed.
they either make you redundant or keep paying you.. their choice..
the redundancy term is usually several weeks and then you get a notice period of several weeks ( dependant on how long you've been there.. )

it's a stupid move anyway as the will be paying more for you through an agency than they pay you now.. unless they expect you to take a pay cut as the agency won't do it for free and charge more than you get..

philomahony said:

less tax and ni and possibly get a rebate.

Click to expand...

it sounds to me like a trick to save them paying you redundancy pay when you get the push later. You will also not be paid on slow days when there's no work.

The amount you receive includes your holiday, sick pay, illness insurance, pension, training and also Employer's NI. You might not see it but it's there. The only difference is that you become the one who has to apportion it and put it aside. Assume minimum 10% of the gross that you will have to put aside for your pension, and PHI for long-term sick or injury might be £100 a month, I don't know now.

I used to reckon that an employee earning £30,000 needed to receive £300 gross per earning day to end up in the same position. Or £50,000 and £500, as the case may be. You will be lucky to get more than 200 earning days per year.

Working through an Umbrella company you are an Employee, not self-employed. Employer's NI was 12.8% of the gross pay including benefits last time I looked, and it will have to be paid out of your daily fee.