Used Danbro in the past.
Basically they allow you to have things like expenses in the form of a daily allowance, for food and fuel mileage (up to a certain limit usually). They'll deduct your monthly/weekly expenses from your pay, you then pay tax on the amount left, then they deduct their fees (£20 per week in my case) from your expenses then you get those expenses back - they deal with all of your tax etc too. It sounds complicated, but if you're a contractor (basically temping) you loose out on the benefits of salaried work, so the trade-off is being able to claim deductible expenses - according to the last I looked at it you could be temping/contracting for up to 24 months on the same job before it would be classed as full-time salaried employment whereby tax/expenses would be different.
When I was doing it, I usually came out bout 200 quid a month better off due to getting about 50 quid a week in food and fuel allowance paid.
I used to fill in my time sheet for work and fax it over (it had to be signed by my boss back then), and my expenses forms online each week.
Generally speaking these type of accountancy firms can either do all the work for you, or guide you in setting yourself up as a limited company, or somewhere in-between. Worth while doing either way imo.