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So why is there so much variation between umbrella companies? Some will let you submit expenses online when some don't, others will let you join on the phone or charge you for CHAPS payments.

The main differences seem to stem from four factors; the legal advice a company has received, it's operational circumstances, financial decisions and lastly cultural differences.

When legal firms provide advice I'd like to say that all their clients receive identical advice, but speaking from experience we've seen that can differ quite surprisingly between companies depending on how each asked the question. The differences in advice can be something as simple as just recommendations, or extend down to the contractual level. Judging the legal security of an umbrella company is difficult especially as things have become so much more complicated over the last couple of years, I would love to be able to tell you a simple way of figuring it out, but there isn't one.

Expenses are a good example of how these differences can be so significant. Some companies will allow you to claim expenses online, and whilst I can't speak for the advice they've received, ours states that we need original receipts as evidence that an expense has been incurred, making online submission impossible.

Our primary concern is that we don't want you faced with a tax bill or legal issues over expenses that were not allowable, second is that by sticking tightly to the inland revenue guidelines we're legally in the clear (lets face it, claiming for expenses you haven't actually incurred is fraud), it keeps HMRC happy and substantially reduces risk, neither of which is a bad thing.

With regard to operational circumstances, companies may have affiliations that require them to have to do things differently to one another. For instance we are (to my knowledge, and feel free to correct me if I am wrong) the only umbrella company "Authorised and regulated by the Financial Services Authority", and while this is fantastic, it does mean that we have to apply a higher legal standard to the way we operate, otherwise we risk losing that status.

Financial decisions are easier to see than a lot of these differences due to the fact that most of the time they have a figure attached to them. Obviously there are different pricing models and you have to assess what sort of price and service you need, just make sure that you know up front the total you will be paying each week. I would like to add that in my opinion there is no reason to pay companies extra for weekly CHAPS payments there are plenty of companies who won't charge you for it and have you paid on the friday. Any reasonably sized company can usually set up an arrangement with banks for CHAPS payments bringing the usual price down significantly.

Cultural differences are the hardest to nail down of all the things I've mentioned, they reflect the hiring choices, management style and atmosphere in the office of the company in question. This may influence any aspect of the previous 3 either for better or for worse, and the results are very much a matter of what appeals to you as an individual. Hopefully you like friendly, efficient and capable staff at the end of a phone, as that's what we're aiming to provide.

Anyway, I hope this has explained some of the reasons there are such differences between the way umbrella companies work.

Thanks for listening if you would like to comment, get in touch, or correct me you can message me here.

Hugo
06/08/2008