Tier 2 sponsorship & Umbrella companies / contracting

This is a new thread to explore an old issue.

My objective here is to help people avoid fraudsters and to allow you to sort the good companies from the bad. On a technicality, you should note that a 'pure' umbrella company can not sponsor anyone; they must act as a consultancy to comply with a sponsor's obligations.

1. Don't pay an up front fee to anyone to sponsor you.

2. Be very suspicious of any company that offers to sponsor you before at least your first assignment is identified. (Sometimes this can be legitimate for example if they are assembling a team to bid for work).

3. Be very alert to the deal offered. Remember that any employing company faces a 13.8% payroll tax (employer's National Insurance) on what they pay you. Several companies will work to a margin of c25%, from which they meet the 13.8% employer's NI cost. A few companies quote superficially attractuive rates (eg 18% or less) but then try to charge-back the employer's NI to you.

4. Sponsoring you involves the company taking on a raft on onging obligations, including a duty to notify UKBA within 10 working days if you are AWOL, or change work address, or gain a new status. For this reason you will have to have a much closer relationship with your sponsor than a UK national might have with an 'umbrella company'. It may seem like annoying form-filling, but if they are not making you jump through the hoops, then they are probably neglecting their duties and thereby endangering your visa. (letting you drive without a seatbelt is not necessarily doing you a favour...)

workpermit.com can help suitable people find sponsorship. If you are interested, send your CV to Tier2jobs@workpermit.com If you have been offered an assigment already, do mention the day rate in your mail as it will be to your advantage.

If you are currently on a Tier 1 post study work visa, you could use the Tier1psw@workpermit.com for your mail. Again, remember to attach your CV and mention anyything you have alreday been offered.

Happy job hunting

James Dunlop

Hi

This is a re-post of the same question elsewhere (which you have not yet replied to!)

Can you confirm which fields this applies to? I understood the following could work

- IT
- Engineering
- Finance / actuarial
- Healthcare delivered by Doctors and some high level specialists such as Radiographers / Sonographers

Can you confirm if this is correct and add any others of relevance?

Actually I paid a deposit to the umbrella company of almost GBP 1000 when I initially got sponsored. They said it was to cover the work permit fees & then I got it back after I had contracted for 6 months. Just my experience mind you!

Hi

OK a few things

1. In most circumstances you should not pay a deposit to an employer. It is reasonable for them to expect you to pay your own application cost, but not to pay a bond. Some disreputable companies use a bond to discourage sponsored staff from switching jobs. I have seen cases where there are large penalties of several thousand pounds for leaving in under 3 years.
6 months and £1000 is better than some but you should look for an employer that does not do this. They do exist

2. You are right the NI cost is never 13.8%.
Typically from a project yielding a 23.5% margin the underlying margin going to Head Office is c12.5% and ER'NI is c11% (13.8% of 76.5%)
Employer's do save NI on tax free expenses, but they have the risk that an HMRC audit will disallow an expense in which case they would have a bill to pay. Expenses are thus a win-win, all parties benefit from tax efficiency.
Further, as there are many businesses that have underlying margins of 60%+, I don't think you should see a 12.5% profit margin as bad, the head office costs are not going to be zero! Having said that, if a salesman says 'because of 13.8% NI, a 23.5% profit margin equates to 9.7% for the company', then they are not to be trusted.

I hope this helps

James

Hi

The audit would be by HMRC not the Home Office. It could occur years after the employment ended, so 'recover next month' is not an option.

More importantly, what you are suggesting is that you negotiate a margin exclusive of employer's NI, and that you pay the employer's NI from 'your share'.

Charging employer's NI to an employee is not acceptable. Of course the employer must fund the NI cost and, for an employee in a fee-generating role, it is ultimately the client's payment of fees that funds your pay and benefits, but it is important to remember that

1. You are not a contractor

2. You are not freelance

3. You are an employee

4. If you are sponsored, you are employed on a base salary of not less that required by the SOC guidance. You may also have a bonus or performance-pay element of your package, this is something you can negotiate, but do not pretend that they are not an employer or you are not an employee

I think your issue is that you would like higer pay because of the work you do, not only IT work on the projects, but finding new projects. By all means ask for a higher salary or more generous terms (although you are probably on good terms already), but do not try to play games with employer's NI costs. Those costs are properly the costs of the employer, and they should have a business model that gives them enough margin to afford them.

However, if an employer pretends to you that their NI cost is 13.8% of invoiced fee income, they are being dishonest. You should look for a more honest company. They will not necessarily pay you any more, but they should be better people to have as your employers.

All the best

Hi All,

I have been speaking to a company called Metamorfs they are looking to sponser my visa, they are initially charging me
3600 pounds till assigning the COS . I would need to bear the cost of my visa.

Do anyone know about the company how the company is. the company website is http://metamorfs.com/
the address listed there is a virtual address so i am not sure how they are.

Please advice if i should go with them or not.
I am short for ILR for only 5 months and my current company is not extending my visa. I am on Tier -2 ICT as of now.

Any help or advice will be great

Hello,

I'm also currently on Tier 2 sponsorship with a permanent role. I'm looking to get into more flexible roles (contracts) that will be both UK based and sometimes international. I'm an experienced Electrical Power Engineer so somewhat confident I can easily get contract roles nationally and internationally. Can I get a company that will sponsor me and allow me these flexibilities of contracting nationally and internationally? Most importantly, and getting my ILR in future will not be affected? I'm just one year on the tier 2 (4 years to go)


Any advise will be much appreciated.

Contracting is not permitted on Tier 2, even via an Umbrella, as you will be under the direction and control of an intermediary, not the end client.

Hello,

Please does anyone know if i can start a second job while while i'm being sponsored on tier 2 for my first (current) job? If i can, must this be paye or it can be contracting or self employed. Thanks for your help

Hi,
Any umbrella company's sponsoring electrical power engineer . Experienced persons please advice .

MarcusB wrote:Actually I paid a deposit to the umbrella company of almost GBP 1000 when I initially got sponsored. They said it was to cover the work permit fees & then I got it back after I had contracted for 6 months. Just my experience mind you!

Hi Marcus,
I am on a Tier 2 general visa & my current employer is going to cancel my COS by end of this month. I am looking for some umbrella company who can sponsor me. As you have mentioned you got a sponsorship from umbrella company by paying some amount. Could you please help me in giving the company name. if you don't wish to put the company name is this site please mail me the company details to my mail address Removed Thanks a lot for you help in advance.

chandruv81 wrote:

MarcusB wrote:Actually I paid a deposit to the umbrella company of almost GBP 1000 when I initially got sponsored. They said it was to cover the work permit fees & then I got it back after I had contracted for 6 months. Just my experience mind you!

Hi Marcus,
I am on a Tier 2 general visa & my current employer is going to cancel my COS by end of this month. I am looking for some umbrella company who can sponsor me. As you have mentioned you got a sponsorship from umbrella company by paying some amount. Could you please help me in giving the company name. if you don't wish to put the company name is this site please mail me the company details to my mail address Removed. Thanks a lot for you help in advance.

Hi Chandruv,

Could you please share the sponsor details if you have received from marcus. to my email Removed

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