The Golden Rules (of Engagement)

Posted on 1 December 2007

4 Comments

My name is Rob Crossland and I'm the MD of Parasol, prior to that I worked as a Contractor in the IT and Finance sectors. I hope you might enjoy and contribute to my musings on contracting, employment, sport and tax!

Since the Managed Service Company (MSC) Legislation came about, there has been many reinventions of old Composite service providers, new Umbrella Companies and a re-emergence of some off shore schemes. It all adds up to a lot of confusion for Contractors, especially those coming into the market as first timers. So in an attempt to keep it simple, here are what I believe to be the golden rules:

• Stay away from Off-shore – last time I met with HMRC – they stated that they would be going after Contractors using those models. How they locate the Contractor working through an Isle of Man scheme is not known to me, but they seemed pretty adamant.
  
  
• It is legitimate to run a Limited Company but be prepared for more responsibility and more paper work. The MSC legislation means that an “Accountant” should not be selling you “85% take home – guaranteed” – they also cannot have control of your business banking.
  
  
• PAYE Umbrella – Many are new to this and do not truly understand what needs to happen. Be careful of being offered over inflated expense led quotes that are not based on reality. Mr HMRC is watching. An expense dispensation is not an excuse to claim for things you do not incur.

We (Parasol) have, of course, only ever provided a PAYE service and believe that our solution is the best on the market. I say that based on 8 years of defining a solution that offers more than simply timesheets and expenses. I predict that some of these new companies will fall by the wayside as legislation gets tougher and that the good ones will progress – an obvious statement in many ways but worth looking back on in a few months and years.

Category: Business Expenses, Industry comment, Tax

• Save to del.icio.us
• Digg this story