I going to me working for a small company for a couple of month gross pay will be around 2.7k. The company are happy to either payroll me as a temp or for me to use a umbrella such as Parasol who charge 61.95 per month.
Ignoring any employment benefits, is it generally better to go for an Umbrella and use the 5% expense allowance or is going on the payroll more money efficient?
It's the IR35 5% and such advice is way beyond the scope of a newsgroup. The OP needs to browse extensively and make his own mind up. Here's a start picked at random:
How does it benefit the client (the ultimate "employer")? I can see how it would if they did not already have payroll machinery in place, since the umbrella would deal with it all, but if they have employees already, there seems to be no advantage to anyone.
Financially, there ought to be none and the only reason to use one is to 'payroll' a temporary job which the agency prefer not to do.
But over the last few years, umbrellas have been stretching the envelope wrt tax free expenses to make them seem a better deal than the are.
This has not gone un-noticed by HMG and you can expect some references to a clamp down next week.
I assumed that the 5% that the OP referred to was one of these 'scams' and if it works today it likely won't work next month.
Access to a "job". Historically this service has been provided directly by the agency, but more and more often they are expecting workers to use, and pay for, an umbrella company to pay-roll them.
No more than any other method of employing temps. Usually, clients just ask agents to supply them with workers for an agreed fee. They have no interest in how (or if) the worker is paid (until someone wins at an ET giving them an interest).
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.