We recognise that most contractors looking to work via an umbrella company will now probably commence their assignment post-April, in which case if you are looking to gain more accurate figures, you will need to make sure that the calculation takes into account the Apprenticeship Levy and the new standard tax code (1150L).
Just so you are aware the Apprenticeship Levy is to be paid on all earnings subject to Class 1 secondary (Employer) National Insurance contributions and equates to 0.5% of the Umbrella Company or Public Sector organisation payroll figure. The responsibility for the tax lies with the business closest to the PSC in the chain or the umbrella company, as the one deducting the employment taxes. So let’s put this into perspective for you, a contractor earning £500.00 per day is going to attract an apprenticeship levy bill of around £50.00 per month. For Umbrella companies this means that the Apprenticeship Levy, as is Employer’s National Insurance Contributions, has to be made from the contract rate.
On the plus side, if any can be seen at the moment, the personal tax-free allowance has increased very slightly