Parasol Expenses Cover Sheet

Hello! Unfortunately I found this forum after I joined Parasol and started my assignment. I took a read of my expenses sheet and I'm quite concerned about what they want me to sign.

I understand the above assets will remain the property of Parasol on approval of the related claim.
I further agree to pay a security deposit equivalent to 10% of the purchase price.
I understand that I am able to purchase the above assets from Parasol after a qualifying period.

After a few complications from their side I'd rather ask for advice before I sign anything. Btw, is this a common practice among umbrella companies? Can someone please advise?


CUK Contractors Respond:
Legally speaking, you will be an employee of the umbrella and they will own the equipment purchased on your behalf. I believe the typical scenario, in practice, is that you pay a small fee as a security deposit and can then purchase back the equipment for a depreciated value (equal to the security deposit) upon leaving the umbrella if you so wish. It sounds like you may need to do a little more reading about this structure in order to avoid being surprised by other aspects (such as the "employer costs" you will be charged as part of the umbrella fee).


CUK Contractors Respond:
Maybe scanning the Umbrella forum will uncover some of these surprises....

Parasol Respond:
I work at Parasol head office, and would like to reassure you that the arrangement you have described above is an effective and legitimate way for us to ensure you have the right tools (eg electronic equipment) at your disposal to work on your assignment as a Parasol employee. As we’ve some 8,000 employees across the UK, it’s somewhat impractical for us to spec out, buy and then ship out any number of electronic devices on a daily basis.

The most sensible option for all concerned, therefore, is for employees to spec out an item, pay for it out of their own pocket and have the cost reimbursed through Parasol. The item remains the property of Parasol for the duration of your employment, so a security deposit is retained out of net pay. This can be refunded to you at the point you leave Parasol, should you wish to return the item to us in a usable condition.

Should you wish to retain the item, the security deposit will cover the residual value.


SJD Respond:
So what you are saying is that the "employee" has to buy their computer equip out of their own earnings, then give Parasol a deposit as well. When they leave Parasol they have to either give the equip back, or buy it back from you!!


CUK Contractors Respond:
Original Post: So what you are saying is that the "employee" has to buy their computer equip out of their own earnings, then give Parasol a deposit as well. When they leave Parasol they have to either give the equip back, or buy it back from you!!

I am guessing the contractor expenses the computer, and rather the whole amount being reimbursed, 90% is reimbursed, and the remaining 10% is returned when the computer is returned... but I do see your point. The computer should be the contractors, unless the umbrella co is going to buy it from the contractor.


ContractorUmbrella Respond:
I am sure I must be reading this wrong - it sounds as though the the contractor buys the equipment and is reimbursed 90% of the value but loses the other 10% unless they give whatever it is to the umbrella company to keep.


Parasol Respond:
As a founding member of the FCSA, and having been audited by both Ernst & Young and HMRC, we are keen to ensure that we follow legislation to the letter and enable our employees to claim for all their incurred legitimate business expenses through the most compliant means possible. We are pleased to be able to offer our employees the facility of claiming legitimate electronic equipment purchases as business expenses – particularly as some other umbrellas don’t offer this facility.


CUK Contractors Respond:
Original Post: As a founding member of the FCSA, and having been audited by both Ernst & Young and HMRC, we are keen to ensure that we follow legislation to the letter and enable our employees to claim for all their incurred legitimate business expenses through the most compliant means possible. We are pleased to be able to offer our employees the facility of claiming legitimate electronic equipment purchases as business expenses – particularly as some other umbrellas don’t offer this facility.
 
I am not surprised you allow them to claim these things - if you get to keep them..

ContractorUmbrella Respond:
Can you please explain Parasol how the cost is 'reimbursed' to the employee - at a conservative estimate if 10% of your employees are expending an average of £750 per annum on equipment you would have had to reimburse over £500,000 - where would this money come from - surely this is not a cost of business?


CUK Contractors Respond:
It's amazing how the Parasol reps always go quiet on these forums when the questions get too awkward ...


CUK Contractors Respond:
It looks to me that Parasols policy on equipment isn't much different to other umbrella companies policy on equipment apart from the 10% deposit:

Parasol: "The costs of hardware, software and personal protection equipment essential to your role can be claimed. There’s no limit to the amount that can be claimed, although you must complete the sundry letter provided detailing how each purchase supports your role, along with the original receipt. Claiming the full cost of any purchase requires a security deposit* equivalent to 10% of the purchase price to be paid. The equipment will become the property of Parasol, with the option to purchase it after a qualifying period at a second-hand value assumed to be equal to 10% of the purchase price.* The 10% deposit will deducted from your net pay following your authorisation."
ContractorUmbrella: "Claims for equipment must be supported by evidence that they are specifically required for your current contract and that the equipment is wholly necessary for you to perform the assignment. Any general pieces of equipment for your role as a contractor or ‘nice to haves’ are not permitted by HMR&C."


CUK Contractors Respond:
I would imagine the Contractor Umbrella deduct the full cost of any equipment from your earnings, otherwise the brolly would be funding loads of ipads etc. I think ContractorUmbrella was trying to ask Parasol how they funded such purchases of equipment etc, as apart from taking 10% from the contractor, there is no apparent way that such purchases are funded. It is a mystery and even more so that Parasol have gone quiet on here. Perhaps they should remember, "if you can't stand the heat, stay out of the kitchen."


CUK Contractors Respond:
I think we are aware of that. The HMRC policy on wholly and exclusively is well documented. The key argument is the 10%.