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What are Umbrella Companies and IT Contractors? Business Articles | August 8 Wholesale Jerseys , 2011
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Nowadays a huge percentage of IT Contractors feed the money they earn from their IT Contracts via an Umbrella Company.

IR35 was set up because the Government believed that some IT Contractor s were just disguised employees. It was designed to catch those who finished as a permanent employee at a company on the Friday only to become a contractor at the same company on a Monday. As contractors they were able to claim all expenses including travelling costs.

Umbrella Company Net

Unfortunately the IR35 legislation affected a lot more than those contractors in that particular net and so Umbrella Companies came to the fore.

An Umbrella Company permits IT Contractor accountants to be able to claim some expenses from the business. A few more risky Umbrella Companies obtained set up called Managed Services Companies but the Government has now clamped down on that particular type of Umbrella Company.

Another type of Umbrella Company Cheap NFL Nike Jerseys , the EBT, has started up which puts the earnings from a contractor through an offshore trust but the Chancellor has promised to crack down on that in 2011.

Select Safer Umbrella Companies

It is clearly attractive to an IT Contractor if his Umbrella Company agree with him or her to keep more of his solid earned money but in the long period he is better with a safer type of Umbrella Company especially the Umbrella Companies who treat the contractor as a PAYE employee.

These Umbrella Companies do the whole thing for the contractor together with processing timesheets Cheap NFL Jerseys Online , invoices and the payroll and are still able to let him or her claim a few expenses.

How to selection of Umbrella Company

In the long term these type of Umbrella Companies will allow the IT Contractor to be able to sleep safely in his or her bed at night knowing that HMRC and the Chancellor are not going to introduce retrospective legislation which means they have to pay years of back tax.

The selection for IT Contractor accountants are Limited Companies if they think they are outer IR35, safe PAYE Umbrella Companies or the more risky type of Umbrella Company which will let them keep additional amounts of their money but may keep them at future risk of paying back tax.


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