‘We will stop employment intermediaries exploiting the tax system,’ explained Chancellor George Osbourne during his 2015 budget speech, explaining that he’ll be, ‘clamping down on the agencies and umbrella companies who abuse tax reliefs on travel and subsistence.’
While the measures don’t come into effect until 2016, they essentially call time on many of the disguised employment schemes that contractors currently work through. And with the restrictions on travel and subsistence claims, umbrella schemes are fast becoming the most inefficient tax structures in the UK.
The future certainly doesn’t look stable for anyone unlucky enough to be caught up in all of this, and clients are responding in a hurry. There has been a mass exodus of umbrella users, leaving the providers with a huge cash flow crisis and many in the midst of closure. If you’re a contractor using an umbrella company, then your hard-earned money may well be going down with them.
In fact, one of the tell-tale signs when an umbrella company finds itself in trouble is its inability to pay you. If your payments seem to be getting later and later, then it’s probably time you reviewed your situation. The obvious choice is to close the umbrella and open up a limited company, but so often people avoid doing this because of worries over administrative difficulties – most of which are easily dealt with, especially when you’ve got someone watching your stall for you.
At MAF, we have designed a fully inclusive service to counteract the financial legislations, help you with the niggles of forming your own company, and keep you tax-alert so that you never miss a deadline again.
Not that we’ve set this up in the wake of the umbrella scheme crisis. We’ve been helping contractors and freelancers for years, and many keen umbrella users have already made the transition. We don’t really like to blow our own trumpet too loudly… not when our clients do it so readily for us! You can check out our testimonials here, and get in touch if you think you need a bit of help.
Now is the perfect time to move, and move quickly. We can have you set up in hours. By next week you could be home and dry, invoicing from your own limited company.
You don’t want to be the one left holding the umbrella, do you?