The only legitimate way umbrella companies can differentiate themselves from each other in terms of price is in the weekly or monthly fees they charge to their clients. So what should you bear in mind when comparing umbrella company fees?
You pay the same amount of tax regardless of the scheme you join
If you sign up to a PAYE umbrella scheme, you are taxed at source (Pay-As-You-Earn). Income tax and National Insurance Contributions are deducted from your gross pay according to standard HMRC rules.
Although a minority of umbrella schemes still imply that they can benefit their members with ?generous expenses allowances? and suchlike, umbrella companies can only reimburse contractors for expenses that have been legitimately incurred. And ?expenses dispensations? are provided by HMRC to help scheme administrators simplify their paperwork ? they do not provide financial benefits to scheme users.
As a result, the only way you can compare umbrella companies on a cost-basis, is by looking at their fee structure.
There are several things to bear in mind when weighing up costs ? are there any hidden costs, and are you comparing like with like?
Umbrella company fees ? gross or net?
With the headline weekly or monthly fees quoted on umbrella company websites, you should ensure that you are comparing the gross fees. Some companies quote the net fees to appear more competitive (i.e. how much it will cost you personally after tax relief has been claimed ? either at the basic or higher rate of tax). Find out more on how to work out your net take home pay from an umbrella scheme.
Even if you find a company with the lowest fees on the market, you should find out if any additional fees apply for entering or exiting the scheme, or for making CHAPS payments to your bank account. It would be a false economy to join the ?cheapest? scheme, only to end up paying in other ways.
The weekly fees quoted by some of the leading PAYE umbrella schemes vary between ?27 and ?30, and monthly fees between ?85 and ?120. A very small number of schemes will charge a fixed percentage of your invoice value each month, typically capped at a certain level.
Comparing umbrella companies
Finally, although cost is an important consideration when comparing umbrella companies, there are other equally important factors you should consider before signing up to a scheme ? such as firm reputation, how established it is, and what ?extras? the scheme provides. Read more in our guide to comparing umbrella companies, and find out where to find umbrella company reviews.
Try our growing umbrella company directory for some initial suggestions.
You should also seek recommendations from colleagues or friends, if possible.
Related posts:
- How to compare umbrella companies
- Umbrella companies and net take home pay
- How to choose an umbrella company ? 10 Tips
- How does a PAYE umbrella company work?
- How to join an umbrella company scheme
Source: http://www.companybug.co.uk/guide-to-umbrella-company-fees/
dancing with the stars season 14 david garrard bethenny frankel michael bay ninja turtles san antonio weather mike daisey nicollette sheridan
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.