Blog Layout

IR35 Tip #2 - Read The Contract

Paul Allman • Mar 13, 2020

So you've chosen your Umbrella Company, what are you getting yourself in to?

When we decided to offer Umbrella Employment Services we did so mainly due to an overwhelming feeling that there wasn't a great offering available to us as contractors.

Early in the research phase of setting up this company, and during our own journey to decide on an umbrella company, we reviewed a number of contracts.  

Here are some of the pitfalls we found:

Even though there was a standard termination clause in the contract (ie notice periods), there were multiple clauses that meant:
  • If you were not happy with an umbrella service and wanted to leave, you could - however, you would not be able to work with your current agency or end client for a period of 12 months.
  • If you ever did anything to bring the umbrella company into perceived disrepute, then you could have your contact terminated and any monies withheld.
  • If, should you be terminated and taken more holidays than the pro-rata'd amount, then this could be stopped on your final payment....
So, our advice, make sure you read carefully, you may be signing up to a little more than you bargained for!

AA Growth by Acquisition

By Paul Allman • 21 Mar, 2022
AA Umbrella open to acquisitions

AA Umbrella Proud to Sponsor Sport in the Community

21 Mar, 2022
AA signs 5 year sponsorship deal to promote sport in the local community

AA Umbrella & Coronavirus

By Paul Allman • 13 Mar, 2020
We are aware a number of our employees will be starting a work from home cycle from Monday 16th March. This unprecented action by our clients is welcomed by AA Umbrella to safeguard our employees and give greater flexibility for the support and care of loved ones through the coming weeks. No one knows what the virus will do in the near future, but we here at AA Umbrella are committed to the wellbeing of our team. We will make increased contact with our employees on assignment and where possible look to support the potentially sustained period of home working. This is very much an unknown path less travelled but my fellow Directors and I will support all employees fully during this time.

IR35 Tip #1 - beware the number 21.66

By Paul Allman • 17 Feb, 2020
This is the first of our 'top tips' to help contractors understand the move from a Ltd Company to an umbrella. First up are financial illustrations . If you are of a certain age, you will know the Ronseal advert - "does exactly what is says on the tin.." - then why do I get 3 different financial illustrations when I engage umbrella companies? The bigger question is - "is that bottom line figure what I am going to receive each month?" The answer almost certainly is 'no'! Here's why: Firstly, out of the three examples, one quoted 23 working days and 2 quoted a 'typical month' of 21.66 days - that's very exact, it must be right? Right? Well, let's do some maths: 21.66 working days for 12 months = 260 days. 260 days = working 5 days a week for 52 weeks of the year, Therefore: No holidays No Furloughs No Bank Holidays So, they are already over inflating your income by around 30 days - which on £650 a day is £19.5k gross. In 2020, these are the maximum working days, assuming no overtime: January - 22 February - 20 March - 22 April - 19 May - 19 June - 22 July - 23 August - 20 September - 21 October - 22 November - 21 December - 20 Second, if you earn over £100k a year, your tax code drops - £1 for every £2 earned over that threshold. Our advice, calculate your net daily rate (then try not to get too depressed!) and use that to model your cash flow. Giving you an example, on £650 earnings a day, a 21.66 illustration says £7,868 according to one Umbrella company. If in August, you go away for a 2 week holiday, then your income is going to be: (£7,868 / 21.66) * 10 days worked = £3,632.50 * * this illustration is based on a tax code of 1250L We know you may not be able to use our services due to you PSL / agent, but we do hope you use our advice - we are all contractors after all! If you do want an illustration from AAUmbrella UK, then please use the 'Request a Quote' button at the top of the page. Good luck!

AAUmbrella UK offer new product for ex Armed Forces Personel

10 Feb, 2020
In support of our Armed Forces, and veterans, AA Umbrella UK Ltd have announced that any ex-Service member can receive a £10pcm discount on our services. This is a lifetime offer and valid on presentation of a valid Armed Forces discount number.

HMRC Announce Delay to IR35

By Paul Allman • 07 Feb, 2020
Update on HMRC's Announcement to changes to IR35 for Private sector

Contractors Launch Ethical Umbrella Company

By Paul Allman • 07 Feb, 2020
AAUmbrella.UK was launched today by two experienced LTD company contractors, Paul Allman and Natalie Ashworth to give contractors moving to an Umbrella company due to IR35 an ethical employment option. Paul Allman states "after months of researching and trying to choose an umbrella company I realised that what I was looking for didn't exist - so the next logical decision was to create it" Natalie Ashworth added "we want our friends and colleagues in our industry to have simple, clear and accurate financial illustrations and an employer who both understands them and cares" AA Umbrella UK LTD offers two employment options AAUmbrella.99 and AAUmbrella.01 - including all the basic requirements of an umbrella but for a fixed monthly fee.
Share by: