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Tax Saving Umbrella Companies

Tax Saving Umbrella Companies

There are organisations advertising as disguised umbrella companies that claim to net you 85% or even more of your contract rate, while these sound attractive on the surface they should be avoided.

All umbrella companies are held to the same PAYE calculation for tax as you would in normal permanent employment, basic rate 20% on £0 – £37,400 and higher rate 40% above £37,401 (until April 2011).

The one factor that should affect your net take home pay is the umbrella company’s fee.
The expenses you can claim for are governed by HMRC and not the umbrella company so these should not be sold to you. The only way they can claim to net you a higher pay is to put simulated expenses through. These companies use terms and phrases such “approved dispensation”, “take home more of your income”, these tax saving umbrella companies can put you at risk of investigation and if challenged you could face a hefty tax bill and a fine if you can’t prove their validity.

If you have any questions please call one of our experts on 08456118017.