Can you tell us about how and why Carrington was formed? 

“We started Carrington Corporate Services Ltd 13 years ago, this venture aimed at providing accounting advice and support to Limited Company directors. However early on it became apparent that there was a market for contractors that wouldn’t benefit from incorporating their own company and they would profit more from following the route of an Umbrella company.”

“We decided that there was a definite need for contractors to be provided with a more rounded and professional solution in this area, and so eight years ago we started Carrington Management Services Ltd.” 

“Our objective was to put something in place that would benefit the contractor but similarly would ensure their practices were compliant with UK legislation. Because we had experience in being a reputable accounting firm, we had the knowledge and expertise to develop an Umbrella Company that would meet these objectives.”   

“The market has changed over the last 12 months, we have noticed through dealing with clients who have had poor previous experiences that there appears to be far more dubious Umbrella solutions being offered by non compliant companies.”

“It is imperative that providers follow the HMRC guidance so that the benefits are passed onto the contractor, however many contractors naivety results in them not knowing to question certain procedures and so these companies will continue to exist and perhaps multiply until such time as rigorous checks are implemented by regulating authorities.”

“As we are fully compliant our clients are in a secure and transparent position. We hope to see the Government recognising the benefits contractors have made to the economy over the following years in an even greater way and that a more joined approach to the contracting industry will be the result e.g. Improved tax legislation.” 

As a long established company you have seen many new regulations introduced to the industry. In reality has any of these regulations had much impact on contractors? 

“The Working Time Directive has probably had most impact on the umbrella contractor but probably not in the way intended. The intention was to regulate working hours and ensure that holiday pay was given to employees. In reality, the main effect has been to bring in another level of complexity to pay calculations, which often confuses new umbrella contractors.”

“We suspect that most contractors really just want to keep things simple and are looking to umbrella companies to deal with regulations on their behalf so they do not need to worry about them, which is what we try to do for our contractors.”

With umbrelladetective.com now attracting many thousands of unique visitors every day, in search of ‘their perfect umbrella company’. What are the three top reasons that they should choose Carrington? 

“Qualified - Carrington was voted the UK’s No.1 contractor accountants in 2009, we aren’t just some flimsy payroll manager. Our accountants are PCG accredited and are always undergoing further studies. We mean business and by us understanding the contractor market so well and being up to date with all tax efficiency measures, we offer the best advice and service to our contractors.”

“Impartial - Because we offer both Umbrella services and Limited Company set up accountancy, we never push contractors in one specific direction and are completely unbiased! We listen to what they want, what they need, and then we offer our advice on what will best suit their circumstances, a very personal and individual experience for each new client.”

“Join the Community at the lowest rate - We charge only £9.20 net pw - all inclusive! Contractors have a sense of community when they join us, the first thing they get is access to our online discount employee benefits scheme PERKZ, and they can also join us on Facebook, Linked in and Twitter. Furthermore have a relevant and interesting blog where we are always sharing tax saving tips and industry news.”

Why is HMRC issuing new tax codes?

“Since January 2010 HMRC have been issuing changes of tax code to many taxpayers for two reasons:

1. Your tax return for 08/09 would have been processed and information from it, such as taxable benefits or income not taxed at the right tax rate, can now be included in your tax code.


2. HMRC has merged two databases to improve the quality of the system. Unfortunately, this is always a recipe for disaster in the short term. 

The second database has quite old data on it. I have heard of a number of instances where a new tax code has included combinations for two employments even though one of the employments had ceased many years ago.”

What potential errors could happen?

“HMRC have issued 25 million coding notices this year - last year it was half that. Anecdotal views were that 25% of old tax codes were wrong, so how many of the new ones are wrong?

HMRC have recognised that there is a problem and have issued guidance that taxpayers should carefully check the new tax codes. Again there are problems with this guidance:

It is on the HMRC website - probably not a place where many people regularly browse. When did you last visit it?

When most people get tax code changes, they assume it to be correct and ‘file it’ never to see the light of day again.

HMRC just do not have the resources to deal with queries if millions of people call them.”

So what can you do?

“Read the tax code notice carefully and if you don’t understand it, give us a call on 0207 324 6020. It is too late to change your tax code for 09/10 but if you think changes should be made this can be adjusted in your personal tax return, which needs to be filed by Jan 2011. Changes for tax codes now being issued for 2010/11 we can of course resolve.”

What are your plans for the remainder of 2010? 

“We aspire to be able to offer our clients an online portal within the next two months, thus making the Umbrella process with Carrington even more convenient and automated. We are also launching our vibrant, new community based website for all clients in the summer."

"We foresee to continue growing at a manageable and healthy rate, 30% increase in client base per annum. We believe in organic growth, not GM - the latter usually falls short in the end.”

“We see legislation developing in a positive way in 2010, leading to the enforcement of all Umbrella providers to operate in the same way and many will have to adapt to regulations. We believe these regulations will benefit the contractors e.g. Pension contributions to become mandatory in the future."

"Also, with the current economic environment, many people are beginning to go back to college to equip themselves with new skill sets to gain an advantage in the market place, coupling this we see the way businesses are run as becoming more flexible and working from home is becoming more appealing for both the employee as well as the employer (No office infrastructure), it is thus reasonable to assume the contactor and hence the Umbrella sector, will expand in 2010.”