When Rob Crossland set up Parasol in 2000, he made a decision to go about doing things the right way and not the easy way.

So when, in April of that very year, a piece of tax legislation known as IR35 came into effect, he was ready to do the right thing by the contractors who were already signing on to this progressive, new PAYE umbrella company.

While other contractor management companies and accountancy firms were encouraging contractors and freelancers to join grouped company structures (known as composites) and set up as small single person companies to reduce the amount of tax paid to the government by using dividend payments, Rob was more cautious. He was well aware that the government potentially viewed this sort of scheme as ‘disguised employment’ and a way of being challenged by the Revenue over whether the contractor was truly in business.  

In effect, IR35 was set up to address this issue and tax contractors and workers who work under these grouped and single person company schemes as if they were employed by the end client themselves. Today, unlike Parasol, some providers still promote high returns without appearing to understand the contractors requirements first. But - and it’s a big but - contractors in these schemes are still at risk of having to pay back underpaid tax going back some six years. In our view, it’s just not worth it.

That’s why, when you join Parasol you become an employee of our company and pay your tax and NI contributions through the normal PAYE channels. Neither Parasol, nor our employees, is affected in any way by IR35 because our employment product is neither a disguised scheme nor a service that needs IR35 insurances. End of!

Leading by example

As the UK’s favourite PAYE umbrella company, doing the right thing by our employees is what we’re all about - and we’re committed to ensuring that the whole UK umbrella industry should behave in the same way. That’s why in summer 2008, Parasol became a founder member of Service providers Association (SPA) to protect legislation that works, address issues that don’t and protect the rights of contractors in the UK.

Part of the Parasol family