Working Under An Umbrella Payroll Company, Nightmare

[beezaneez]

i was recently working under an umbrella pay company through my agency, i am a scaffolder. this umbrella company called asset services wanted all my reciepts for petrol, accomadation , food etc etc etc . i was working 12 hour shifts but left work yesterday as collecting reciepts and faxing timesheets, faxing reciepts was all getting too much for me, i have worked through various companies before but this comapany just wanted everything and i had to forward all reciepts to them or i would lose out on wages.

i asked another payroll company ( IQ contracts ) to take me on , this companie IQ told me i didbt need to send in reciepts etc and that i was guaranteed 83 % of my earnings back after tax and ni deductions. though when asked what my job was ( scaffolder ) they said they couldnt take me on as it came under construction ? even though i was a scaffolder offshore last year and IQ were paying me then. so question is can anyone explain how umbrella compaies work ? they told me that in order for me to get a full decent amount on my wage after tax i would have to put loads of expenses down eg hotel , petrol, food bills .

[factor-fiction]

Yes- the only people who make money out of an umbrella company is the umbrella company. In theory you may save a pound or two each week- in fact some guarantee to make up a shortfall if you are not a £ better off than you would otherwise have been) but even that can be smoke and mirrors.
If you submit valid claims for HMRC- approved types of expenses these are deducted from your income before tax and NI are due (so you pay less tax/NI) and then the expenses are added back. It can reduce your tax/NI bill considerably - eg if you reduce your taxable income of £500pw by £200 pw expenses your tax bill will be much lower.

But- you will also have to pay around 5% commission to the umbrella company- and you will have to pay employers' NI on behalf of teh umbrella company.

And you have to be able to produce full records of all journeys and expenses for an audit and maybe submit copies each week by post/fax/email.

Also, you may end up incurring costs you wouldn't incur just to get your tax bill down. My umbrella company encourages me to eat £10 lunches so I can claim £2 tax back, but really I'm happier with a 50p home made sandwich and a bottle of water which can't be claimed against tax

[kash1]

Do check the umbrella company tax calculator at http://iknowtax.com where it shows you a detailed breakdown of calculations (including calculations after expenses).
Umbrella companies can charge admin fee of £25 - £30 per week (the fee can be taken off as expense)