Umbrella Company Dispensations - dispelling the myths.
ContractEyewrote a great article on Umbrella Company Dispensations recentlydispelling the myths surrounding certain Umbrella Companies and theirpractice of marketing their services by way of so called specialarrangments with HMRC that allow contractors to massively increasetheir take home pay.
In conclusion ContractEye says stay well clear of Umbrella Companiesencoraging conractors to overclaim on their expenses to increase theirtake home pay.
We have written many times about the same subject, especially sinceHMRC have stated that this is an area that concerns them and they arelooking to take action against Umbrella Companies that are flouytingthe existing HMRC legislation.
In fact we believe that HMRC has a special team that plans to managecompliance for all Umbrella Companies ( that they know about ). MostUmbrella Companies that are trying to do the "right thing" think thisis a good idea as it should encourage a level playing field for all.
Inthe meantime we still believe that Professional Contracts andFreelancers looking for a career as a freelencer for more than 6 to 12months are better off in a Limited Company, but only if they truly wantto run their own business, not that its that complicated with the rightsupport.
If you are working alongside Umbrella Company Contractors you maywant to pass this onto them so they can consider their options. Werecently posted an article aboutwhy Professional Contractors and Feelancers will always be better offin their own company and you could also download our 2007/8 comparison spreadsheet so that you can weigh up the financial advnatges of running your own business.