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  1. #21

    More time posting than coding

    lucycontractorumbrella's Avatar
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    Which makes it equally frustrating when we offer a calculator that makes only an assumption of the tax code, and people won't use us because they are being offered higher take home elsewhere

    Let's reiterate NO umbrella can offer a higher take home than any other - only difference is the margin and the ability to be able to explain things transparently and honestly.
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  2. #22

    Still gathering requirements...


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    Lucy is absolutely right. The take home pay for every umbrella company should be almost identical. The only variations in umbrella company costs should be the administration fee, whether the company has reached its staging date for pension auto-enrolment and whether the company’s payroll bill is likely to exceed the apprenticeship levy threshold. The costs the agency would pay on PAYE would include all of these, with an additional amount for the actual cost of employing someone to administer the payroll. The uplift should be commensurate with their PAYE costs, but the specific level is entirely at the agency’s discretion.

    Our illustrator uses 15% as a relatively common amount that agencies we engage with choose. We are currently seeing an increasing number with significantly higher uplifts than that, which is absolutely fantastic for their contractors. A generic calculator needs to include some assumptions and we attempt to make those assumptions as explicit as possible. For the avoidance of doubt Eek, you are absolutely correct – where there is insufficient uplift, the worker will be worse off. This is something Unions have, quite rightly, been most vociferous about.

    Interestingly, the very Unions that were baying for umbrella company blood pre April 15 were also livid at the resultant restrictions to travel and subsistence and hence reduction in the take home pay of their members. It is now a stated pledge within Labour’s manifesto (page 51) that they will ban umbrella companies should they come to power. The result would be every contractor going onto agency PAYE and having to move their employment every time they changed agency. Contractors working for multiple agencies at one time will have multiple employments.

    For the avoidance of doubt our basic website calculator is only intended as a rough guide and every contractor who works with us receives a personalised illustration based on their specific circumstances and their own agency’s uplift before they get paid for the first time. As with most umbrella companies there is no barrier to exit. There is no charge or penalty if the contractor feels they are better off on their agency’s own PAYE.

  3. #23
    eek
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    Quote Originally Posted by Matt FPSGroup View Post
    Our illustrator uses 15% as a relatively common amount that agencies we engage with choose. We are currently seeing an increasing number with significantly higher uplifts than that, which is absolutely fantastic for their contractors. A generic calculator needs to include some assumptions and we attempt to make those assumptions as explicit as possible. For the avoidance of doubt Eek, you are absolutely correct – where there is insufficient uplift, the worker will be worse off. This is something Unions have, quite rightly, been most vociferous about.
    Given that I work in a slightly different industry I'm not aware of what lower end agencies do but I have never seen an agency that offers an uplift compared to going direct - most agencies avoid doing payroll full stop. I'll have a chat with my union and CAB mates and see if they've heard of such a thing... The one's I've usually seen are £140 payroll £160 via umbrella (for supply teachers). That £20 is of course eaten up by the Employers NI that then needs to be deducted..

    Lucy, have you ever encountered an recruitment agency that does payroll and offers an actual uplift over and beyond the Employer NI and holiday pay differentials to encourage people to use an umbrella instead?
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  4. #24

    More time posting than coding

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    Quote Originally Posted by eek View Post
    Lucy, have you ever encountered an recruitment agency that does payroll and offers an actual uplift over and beyond the Employer NI and holiday pay differentials to encourage people to use an umbrella instead?
    The uplift is nothing to do with the umbrella really and is not something that a calculator is actually using in the calculation, it just makes it look confusing and like they are benefitting from something that isn't really there.

    In simple terms, it is a case of asking what their daily or hourly rate is and then making sure that this is thoroughly explained to be their contract rate and not their taxable salary.

    The uplift is something the agency should be offering as a difference between PAYE to umbrella to cover exactly as you say. Not sure it is something that is applied as "standard" talking to some contractors recently and the 15% is a sweeping assumption, as some contractors are now looking to up their rates to cover the expenses they can no longer claim, so this may vary dramatically dependent on the contractors circumstances.
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  5. #25

    More time posting than coding

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    Matt - so what's the difference between your Flex option and Agency option, which provide 2 differing take home figures? Or sorry, is this assuming that there is no uplift if they opt to go on the same rate via Agency PAYE?
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  6. #26

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    Quote Originally Posted by lucycontractorumbrella View Post
    Matt - so what's the difference between your Flex option and Agency option, which provide 2 differing take home figures? Or sorry, is this assuming that there is no uplift if they opt to go on the same rate via Agency PAYE?
    Hi Lucy, the assumptions used for our basic online calculator state that a 15% uplift is used (see assumptions section under our calculator). The uplift therefore accounts for the differing take home values.

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