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Orange Genie News

Up until April 2016, there was a widely held belief that umbrella companies existed to allow the deduction of legitimate expenses in order to increase contractors’ net income.

We would argue that this was never really true, since less than half of our contractor employees ever claimed expenses, but in any case, it was a long time ago. Nineteen months after legislation severely restricted the value of claiming expenses, umbrella employment companies are still here and still thriving.

This is a common question and one which frustrates many contractors, you are not alone!

Recruiters have their own preferred supplier list (PSL) and when you start a new contract you can find yourself being asked to use their trusted suppliers. It’s perfectly reasonable for you to want to choose your own umbrella company, but this can cause tension with recruiters who feel a need to control their supply chain.

On the 29th September 2017, HMRC published this article regarding the court’s decision in the high-profile tax-avoidance case involving Rangers Football Club. In their article, HMRC state their intention to use the ruling to take action against other disguised remuneration schemes.

Recently, Orange Genie Umbrella have spoken to a number of nursing agencies who did not expect to pay VAT on our invoices. This is because the supply of nurses by agencies is usually covered by the Nursing Agencies Concession, and VAT is not usually due. These agencies have, quite reasonably, assumed that the concession would still apply when their nurses are employed by umbrella companies.

Back in early July, we reported that Mike Gibson, a contractor who instigated a crowd-funded legal challenge to the Public sector reform of IR35, had exceeded his target of £10,500 in donations. At the time Mr. Gibson was about to instruct tax barrister Michael Paulin to begin research into possible grounds for challenging the IR35 reforms.

It now seems that this research is not going all Mr. Gibson’s way. Addressing campaign donors, Mr Gibson admitted that the chances of success look “increasingly dubious” as “every possible angle has already been looked into by many others”.

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