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Hi, I'm currently using Parasol as an umbrella company but am thinking of changing for various reasons. Does anyone have any recommendations? I've been looking at Crystal Umbrella which is top of the league table according to freelancesupermarket.com but I'm not sure if they're any good or even reliable. Does anyone know?


CUK Contractors Respond:
All umbrellas are the same, I'd just check how long they've been around and that they won't go bust with your money still in their pockets.


ContractorUmbrella Responds:
All umbrella companies work in the same way which means you will be paid via PAYE; if one company promises you a higher take home than another they may be assuming expenses that you are not entitled to claim. The only variance in your take home pay should be the umbrella company's fees. Therefore you should consider the service guarantees that they offer and how long they have been in business; you can also ask to see testimonials or ask for recommendations from fellow contractors. The umbrella league tables are often a reflection of the level of advertising that companies pay for on the site rather than a genuinely objective opinion.


CUK Contractors Respond:
I just signed up with DROLE yesterday. Was going to go with Go Umbrella but couldn't get them to answer the phone, or call back (using their call back service). Got through to Drole no problem, and being there for many years gives me some confidence in them. So far so good - nice friendly and efficient service. Happy days.

I'm new to this game, so what do I know....


CUK Contractors Respond:
I am currently operating under an umbrella company that returns me around 84% after being with Parasol for a while. Prompt payers, which is all I look for in an Umbrella company


ContractorUmbrella Responds:
Are you saying that your take home pay has increased through your new umbrella company? On a contract value of £300 per day you would need to be claiming expenses to the value of 60% of your earnings to retain 85% - unlikely to say the least.


CUK Contractors Respond:
Always look for an umbrella company that has a good reputation, will answer the phone and is finnacially sound. Whatever mktg spin they put on it everyone adheres (or should do) to the same regulation. I have used Contractor Umbrella & Parasol in the past and always been pretty sound.


CUK Contractors Respond:
I can see why you're looking at changing umbrella's then! I changed umbrellas a while back after being mucked about by a previous umbrella called Paramount, oh the horror stories! Just let me say to any using or considering them, get out now while you can. I went with Excellium for an assignment, nice, professional, good rates (from £9 net pw), would recommend to anyone. When I spoke to GFK they were very nice as well, over £15 net pw, but the service seems excellent, although I never signed up to them, but they were the nicest umbrella out of about thirty that I spoke to. I’m considering them for in the future, if things don’t work out currently.

Anyway, recently, I have been calling around umbrella companies again, as one contract specifies "preferred umbrellas".

Quite frankly, it doesn’t matter how good or bad Parasol is, quite frankly, they are a deceitful company I wouldn’t touch with a bargepole. I called Parasol. When asked if they had a geographic number they refused to provide one, quite essential if I need to call them from my mobile for instance. They seemed very sketchy and I didn’t get a good feeling from them whatsoever. There is NO reason at all for an umbrella to have an NGN and insulting to contractors not to offer a geographic number.

My advice when looking at an umbrella:
- If the have an NGN (0800, 0845, 0870), ask if they have a geographic number, if not why not? If they refuse to give you one then that isn’t a helpful or open company. Do you really want exorbitant mobile charges, if you need to contact them while out in the field, or struggle to get a 3G connection and go through the palaver of going on the website to request a call-back?
- Be weary of ones that promise to let you claim every expense under the sun. Keep in mind that an umbrella should always tell you to submit AND keep receipts, just because you use an umbrella, doesn’t mean you'll never get audited/quizzed by the taxman.
- Does the umbrella understand very basic concepts and terms. You won’t believe it, but two umbrellas out of a list of sixteen preferred ones on an agencies list got flummoxed at the difference between gross and net and couldn’t give me a simple straight up figure. I had to explain to them how tax relief worked. Not encouraging at all.
- Although you might not always speak to the same person, do they seem professional, helpful? They should, that's what you pay them for! They are there to take the hassle of a LTD company away. Your only responsibility with them should be, getting timesheets signed and expenses submitted.
- The easier they make it to submit expenses, the better.
- What are their terms for payment? What if the client doesn’t pay, do they pursue payments?
- Do they offer advance services? Do they charge a reasonable amount (under £10 for it)? If not, why not?

There are a lot of other questions you may have, but my final recommendation is the best isn’t always the cheapest.


Parasol Respond:
There are other good umbrella companies who will be adopting the same model as us post AWR and do things in what we would deem the correct way. These are the employment led umbrellas as opposed to those who sell themselves on tax or take home pay. I would say that the swedish derogation model post AWR is the way to go though.

Always do your research when shopping for an umbrella. There are some really useful guides on this site and other contracting websites.

Do take the league tables with a pinch of salt though. They are not impartial, often owned by umbrellas, and most you have to pay to be included on..... which we won't.


CUK Contractors Respond:
Parasol, can you explain why my employment costs are so high, I have tried to get an answer out of 5 or so parasol employees who all seem to just circle jerk me with a different answer. justify employment costs of £819 a month when already paying NI & Income tax - you may be able to save parasols face here.

where is this £200+ a week going on - give me the breakdown.


CUK Contractors Respond:
The only question you should be asking is why am i paying a third party money for them to pay me normal PAYE, whilst i appreciate some people find umbrella service useful the best option is to go limited, so why come on here slagging off umbrella companies and getting them to justify their charges, you might as well stay permie or is it just a case of being to lazy to investigate other options.


Parasol Respond:
Employment costs consist mainly of Employers’ National Insurance Contributions (NIC) but they also include amounts to cover your insurance costs, as well as enough funds in order to pay you should you be on sick leave or maternity leave etc.

The rate of Employer’s NIC is currently 13.8% of earnings above £136 per week.

At Parasol we calculate employment costs to be 13.8% of the invoice value we raise for your work, minus our margin and the NIC free amount of £136 per week. For example, if we raise an invoice for your work of £1,000 a week, the employment cost will be calculated as follows:

£1,000 - £27.50 Parasol margin - £136 NIC free allowance = £836.50

So in the example above the employment cost is £101.44

You can see the amounts we retain outlined in the ‘Pay in Detail’ section of your payslip. For anyone that was with us before we introduced the new payslips this would have been listed as Employers’ National Insurance on the actually slip.


CUK Contractors Respond:
sorry to say i have had that before, it still doesnt really tell me why the costs have suddenly started coming in? never paid these before why am I getting slammed with them now?


ContractorUmbrella Responds:
I can't give you a more detailed explanation about Parasols' procedures because I don't work for them but, basically, all umbrella companies should work in exactly the same way. A contract value will be arranged between the umbrella company and your agency of say £300 per day. From this rate your umbrella company is obliged to make payments to you and HMR&C - what is left is retained as the umbrella company's profit (usually referred to for simplicity sake as a fee). Because an umbrella company is an employer they also have to pay holiday pay - this is dealt with by making a weekly/monthly deduction and then repaying the amount when you are on holiday; this is the accepted way of dealing with holiday pay (when the EC Working Time Directives came in I contacted HMR&C, ACAS, BIS and the legislative office in Brussels to confirm that there was no alternative). There should be no other mandatory deductions from your earnings as things like SSP, SMP, SSP etc and payments between assignment, under the AWR, are all statutory payments i.e. a legal requirement.


CUK Contractors Respond:
Are you saying then that you don't deduct Employers NI from contractors ? How very generous where do I sign ?


ContractorUmbrella Responds:
Nope. I said that from the rate we make payments to the individual, HMR&C and retain a profit - to clarify the payment made to HMR&C includes income tax, employee's national insurance, employer's national insurance


CUK Contractors Respond:
So you provide holiday pay, sick pay and SMP free to contractors or is it all wrapped in your " fee " ?


ContractorUmbrella Responds:
Our fee is £27.50 per week and there are no additional deductions of any sort for SMP and SSP which are made in the same way as any other employer. 92% of SMP is recoverable from HMR&C, again as with any other employer, but the remaining 8% is taken as a cost of business.


CUK Contractors Respond:
Forgive my ignorance but Parasol are publishing their "fee" then charging for SSP and SMP ect. regardless of whether you are a man or woman then reclaiming 92% of these costs IF they incur them from HMRC anyway ?


ContractorUmbrella Responds:
Don't work for Parasol so can't comment sorry


CUK Contractors Respond:
thats what they are doing with me, still havent got that breakdown yet, the circle jerking continues, all you pay is 1 fee ++++ all the other deductions, no mention of that on the site!


Parasol Respond:
I have published how we calculate employment costs on this and other threads on this forum as per the below. We also have a payslip payslip explanation that is available with each payslip and is published on the MyParasol portal. Everyone who joins us informed that they also pay Employers' NIC just like anyother true umbrella company.

Skillmaster has understandably been asking for more detail and I have been chasing this up for him myself along with senior memebers of our operations team but I won't be publishing details that are personal to one of our employees on this or any other forum. As I explained in an email exchange yesterday I hadn't had the chance to speak to everyone I needed to yesterday and with apologies it was likely to be today that I could get back to him.

As mentioned earlier though I have published the following:

Parasol keeps part of the invoice value it receives from the agency which is used in two ways. Firstly we retain our margin which is £27.50 per week or £119.50 per month. The second part is retained to cover employment costs.

Employment costs consist mainly of Employers’ National Insurance Contributions (NIC) but they also include amounts to cover your insurance costs, as well as enough funds in order to pay you should you be on sick leave or maternity leave etc for example.

The rate of Employer’s NIC is currently 13.8% of earnings above £136 per week.

At Parasol we calculate employment costs to be 13.8% of the invoice value we raise for your work, minus our margin and the NIC free amount of £136 per week. For example, if we raise an invoice for your work of £1,000 a week, the employment cost will be calculated as follows:

£1,000 - £27.50 Parasol margin - £136 NIC free allowance = £836.50

£836.50 x (13.8/113.8) = £101.44

So in the example above the employment cost is £101.44

You can see the amounts we retain outlined in the ‘Pay in Detail’ section of your payslip. For anyone that was with us before we introduced the new payslips this would have been listed as Employers’ National Insurance on the actually slip.


CUK Contractors Respond:
So if I am calculating this correctly your "FEE" is actually 50.07 a week or 216.97 per month or 2603.64 per year ?eek: That covers a hell of a lot of maternity pay for male contractors especially when you get 92% back from HMRC ! Just done another quick calculation - for a contractor earning 500 Per Day and paid monthly Parasol's effective "FEE" is 241.71eek


Parasol Respond:
are you using the monthly NI free allowance in your calculation? I'm not getting the same figures as you?


CUK Contractors Respond:
Has anybody raised the thorny issue of ridiculous bank charges yet?


CUK Contractors Respond:
The umbrella company that I am going with have explained that people are losing out in net pay since 1st October because companies such as Parasol are "rolling up" (don't quite understand the term) any money that would be paid out between contracts, and therefore due to minimum wage they can't claim the expenses as before. They said that the pay between assignment is a right under the rules not that we should have to have pay held back to cover it.

Would this explain the increase in the fees charged or retained (not quite sure) by Parasol?
...and if so, surely this is getting around the whole point of what the new rules intended, to be paid for 4 weeks if not on contract


CUK Contractors Respond:
Sorry, I should add, that before deciding on who to go with today, after speaking to 4 companies, non of them will hold back pay to cover between contracts.

Parasol Respond:
How is your umbrella funding the PBA? either your end client has agreed to cover the cost, your agency has agreed to take a hit on their margin, or the umbrella is paying it out of their own funds?


CUK Contractors Respond:
If Parasol are not performing a scam, then why did they try to hide all this in "employment costs". No other company is doing this. I am still being robbed and it is illegal not to give the amount and purpose of any monies on a payslip. This is a scam. Every other contractor I have spoken too has no trouble, only Parasol. So....


CUK Contractors Respond:
Parasol, can you clarify for me , maybe I am calculating wrong but do you calculate employment costs at 13.8 % of invoice value OR 13.8 % of the balance after deducting your fee and the 136 LEL for NI contributions ?

If the fee and LEL deductions are made first then surely is is only employers NI the contractors are paying with nothing else included for PBA , SSP , SMP , HP ect ?


Parasol Respond:
The margin we take is £27.50 a month. Using an example of a £500 a day contractor working 20 days in a single month the employment costs would be £1,126.60.


ContractorUmbrella Responds:
Ok now I'm confused - Parasol, can you confirm - are the only deductions you make for your fee of £27.50 per week and an amount which will be repaid as holiday pay? It is a given that there are employment costs equivalent to Eer's NIC's but previously you had stated that you also make deductions for SMP, SPP, SSP and AWR payments but now you seem to be saying that is not the case.


Parasol Respond:
we do make those deductions yes but I asked our payroll team to make a calculation based on the example above and that is the figure for employment costs that they came back with.

It does vary on a case by case basis so if anyone is confused or concerned we are encouraging them to give us a call or they can contact me with their contact details and I'll arrange for them to have a conversation with the team here and we will go through it with them based on their individual circumstances.


CUK Contractors Respond:
You have me lost too , if people who work in accountancy are struggling to figure it out how is a contractor expected to ?

And by my calculations the employement costs you have listed as being for 10 K PM as listed above don't seem to even cover employers NI let alone anything else ?


ContractorUmbrella Responds:
But the calculation provided is not then accurate surely?? I can only assume that deductions for SMP, SSP, AWR etc are calculated as a percentage of gross pay so presumably if you know the gross you should be able to calculate the deductions???


CUK Contractors Respond:
The silence is deafening !


CUK Contractors Respond:
I have read this thread with great interest.
I use Parasol and had to call them today in the hope of clarifying a new deduction on my parslip.
At first I thought it was another mistake.
In August, i raised 2 timesheets because i changed contracts and the first/second half of the month were with different companies.
In short, the combined 'Parasol Margin' for these 2 added up to over £350.
When i emailed to query this i learned 2 things:
- There had been a 'technical error' and my account had been credited to adjust this down to the usual £112 (no explanation just a credit)
- That the 'Parasol Margin' was used to cover things like sick pay and holiday pay.

Now... after the call today, i can (sort of) confirm that this Parasol Margin is just the old 27.50/week and that the new other amount (over £400 but i only worked 9 days last month!) is there to cover sick + hols etc.
Clear? well not really - why the swapping of names for charges within a month.
I asked if this was a fixed amount. Yes came the reply. So, to confirm i said that when i work a 25 day month, it will still be £405... err well no it is a percentage. (and not a fixed amount).
I asked if i could get some holiday pay for my break last month and the rep said that Parasol do not hold it, they just pay it straight back. I was left wondering why they charge me for something and then repay me all in one slight of hand.
Anyway, it turns out that if i do a full month of 20 days, i could get charged well over a grand.
I have never been paid for when i am sick or when i am on holiday.
Actually, i'm a pretty good saver so i could take care of this all myself.

In summary, i have used Parasol for years now, and they have been no bother at all.
But... if i am still confused after calling, then what's going on.
I am left feeling like I've just seen a card trick but cannot work out how they did it.
Trust is very important to me.
I do not want something for nothing but nor do i want to be mislead.

You are certainly not alone in this.


CUK Contractors Respond:
I am with Parasol at the moment. I noticed that the new "Employment Costs" amount on my payslip was higher than the employers NI due. After reading around it seems that Parasol have a standard explanation, such as "most of it is employers NI". While speaking to a senior advisor, my cynical mind kept telling me that something was not being said, until she mentioned that Parasol had to change something to cover their increased costs. Suddenly all became clear, and she admitted that they were indeed simply pocketing more money.

The employment cost is calculated at 13.8% of (invoice amount - Parasol margin - NI threshold).
Out of this, NI is paid to HMRC as 13.8% of taxable pay.
So while the number 13.8 is (cunningly) applied in both cases, they are actually applying it to a larger number, creaming off their own "tax" on any difference between invoice value and taxable pay. i.e. All expenses.
In one month I have been stung for over 200 quid, on top of the Parasol margin.

To be fair to the company I posted this discovery on their (privately controlled) LinkedIn forum two days ago in the hope of some explanation. Strangely they have not yet approved the posting, though other messages have since been approved. If any Parasol person would like to comment or correct me, feel free to do it here rather than offer to call me.


Parasol Respond:
apologies but we can't comment in on open forum on the personal circumstances of our employees and in relation to employment costs as not everyone is affected. Those who are are not affected in the same way, we do need to speak to you individually. It’s important to remember that the bulk of employment costs is Employer’s National Insurance, which you have always paid with Parasol.

Whilst we don’t want to appear vague and we are certainly not avoiding the question, there is simply not a one size fits all response which is why we are asking you to contact us directly to discuss your individual circumstances.


CUK Contractors Respond:
In the interest of balance I should point out that my previously mentioned post to the Parasol forum has since been published. I'm glad to say it wasn't censored.

Unfortunately your reply is not very helpful. I didn't ask you to give a "one size fits all" response - "one size fits me" will be just fine. As I mentioned I have already spoken to your senior advisor. I understand what has happened - you have taken extra money from me and are not willing to justify it. What I would have hoped for is some transparency here.

I have lost all faith in Parasol as my employer, and was holding out some hope of regaining it. Are you willing to say anything here which might do that?


CUK Contractors Respond:
So the employment costs stated on the pay slip received from Parasol are just another way of them making more money, Shocking!

Looks like I'll be looking for a new umbrella company too


CUK Contractors Respond:
I'm rather curious about these additional "employment costs". Surely these would be just Employers NI & the agreed up-front fees? Why else would it vary unless you're providing additional services, which again should be clearly agreed up-front, and which I would expect to be clearly detailed on the payslip to ensure transparency?

I think you can answer this generally without referring to any specific case or individual. Might it be the case that you'd charge extra "employment costs" that weren't agreed up-front, with the reason for which not being explained on the payslip? Here's your opportunity to confirm or deny it.

I'm not with Parasol but with a different umbrella. All deductions are clearly listed on their payslip and there's no hint of them taking any additional "employment costs", despite charging only a low weekly fee (£9.99). They do also charge £10 for a pension contribution, but that was agreed up-front & is stated on the payslip.


CUK Contractors Respond:
[B]I'm not with Parasol but with a different umbrella. All deductions are clearly listed on their payslip and there's no hint of them taking any additional "employment costs", despite charging only a low weekly fee (£9.99). They do also charge £10 for a pension contribution, but that was agreed up-front & is stated on the payslip.[/QUOTE]
[/B]

That sounds brilliant, what company is that? Parasols shady employment costs, we really must cost them a fortune to employ us

I have been asking for a breakdown on why my pay has changed dramatically over 3 months for no apparent reason. all you get from parasol is something their agents copy and paste out of a document. posted my original query on the 8th of november and I still know nothing. Steven is the PR manager so he will come on here and defend parasol but when he says he is going to get someone to look at your query dont believe him, I did, then took my foot off the gas and its got me nowhere. low and behold this months payslip is even lower than the months before and before, be careful people and ask for a proper breakdown of "how much it will costs to go with you" as parasols Fee @£110 + mystery employment costs are costing me dearly with no explanation.


CUK Contractors Respond:
I recently joined parasol under the pretense that the only fees would be the 120 odd quid a month. Boy did i get a shock yesterday when my first payslip came with £994 worth of "employment costs". they have taken more than 50% of my wage in tax and fees. I have had the same, seemingly standard response as many here in terms of how it is calculated, but that has not helped me.

have been trying to get a breakdown but it seems that noone can provide me one. I have to admit this is heading in the direction of the financial services ombudsman at this point.


CUK Contractors Respond:
Do other umbrella companies charge NIC? if so how much, it might be good to get some comparisons?


CUK Contractors Respond:
My advice for anyone using an Umbrella is be aware of how the calculations SHOULD be performed and independently cross-check them. If things appear not to tally, at least give them the chance to explain before posting here. A competent and honest company should have no issue with transparency & explaining their calculations/deductions. If they won’t or can’t to your satisfaction, take your custom elsewhere!


CUK Contractors Respond:
There is a recent thread on the main contractor forum for how to calculate Employers NI. It should presumably be the same for all umbrellas; it’s how much they subtract from the gross income for their fees etc before applying the calculation that will vary.


ContractorUmbrella Responds:
All companies have to pay employer's national insurance contributions which are calculated at a rate of 13.8% for earnings over £7072 p.a. and umbrella companies are no different