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Parasol = Thats a lot of deductions!

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    #31
    Originally posted by malvolio View Post
    Yes, I do actually understand that. I used to get the same effect when I worked for a company that paid you every four weeks regardless.

    But wouldn't it make the process a lot more comprehensible to your users (or, to be precise, Parasol's users) if the monthly payroll only ever sat inside one monthly tax period?
    Yes of course it would which is why we give our employees the choice to have a rolled-back payment or for us to hold the funds until the next pay period and why we explain the reasons for doing either. Not all umbrella companies make it complicated you know
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      #32
      Yeah I have to say Lisa is very upfront and honest about everything on this forum it's a pity other companies aren't so forthcoming
      In Scooter we trust

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        #33
        Originally posted by AnnaO View Post
        Well, I got a response if anyone want to bother reading it. Seems unfair that because the agency and parasol didnt pay me for Octobers pay until Nov 22nd - I get hit with high tax. Think I will go Ltd.

        Dear Anna ...
        No sure I really understand their explanation for higher-than-expected PAYE, but I'm not an expert in that area. Nevertheless, as this shouldn't impact your Employers NI, have you queried why this is higher than the amount you calculated?

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          #34
          Originally posted by Wary View Post
          No sure I really understand their explanation for higher-than-expected PAYE, but I'm not an expert in that area. Nevertheless, as this shouldn't impact your Employers NI, have you queried why this is higher than the amount you calculated?
          Tax is accumulative through the year - basically you use total tax due from earnings to date less tax paid to date equals tax owed.

          If you get two payments in one tax period (which will happen with lazy weekly-based payrolls paying monthly), the easiest way to work out the revised balance is to deduct the first gross payment from the accumulated total for the latest one. That way you get the correct deduction without having to recalcualte the first figures. Thas why the previous gross pay was shown as a deduction.

          Works for ErNICs as well. So it's the right answer, just not well expressed.
          Blog? What blog...?

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            #35
            Originally posted by The Spartan View Post
            Yeah I have to say Lisa is very upfront and honest about everything on this forum it's a pity other companies aren't so forthcoming
            Thanks Spartan
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              #36
              It seems that this deduction issue is quite widespread - we have been advised today that at least one umbrella company is deducting money to cover pay between assignments under the AWR - more worrying still is that they don't even operate a Swedish Derogation Contract and will not be making payment between assignments
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                #37
                Originally posted by malvolio View Post
                Works for ErNICs as well. So it's the right answer, just not well expressed.
                No it doesn't. Not unless you are a director.

                If you are not a director then you will "overpay" on ErNic since you do not get the "allowance" twice. However it can work in your favour with EeNic since although you do not get the allowance twice you will potentially pay less on any amount above the UEL since the two months payments received are, in effect, combined.

                Simple example. Assume you have an actual salary of 5,000 a month, normally you would receive a payment in Month 1 and Month 2 then both payments will be:-

                Gross 5,000
                EENi 381.76
                ErNi 608.71

                Total Ni over 2 months = EE 763.52 + ER = 1217.42, Total = 1,980.94

                Now, if you were for some reason paid nothing in month 1 and 10,000 in month 2:-

                Gross 10,000
                EENi 481.76
                ErNi 1298.71

                Total Ni over 2 months = 1,780.47.

                With tax it doesn't matter about pay periods since it is cumulative and it will get sorted out at the end of yer (or in the next pay packet). With NI it does matter since it is not cumulative.

                Irregular pay periods are a problem with NI.

                Edit: It can be worked out, and HMRC can expect it to be by using a payment period which accurate scales the period for which the pay is actually for. See chapter 3, starting from P37. http://www.hmrc.gov.uk/guidance/cwg2.pdf

                I doubt many would actually do this, instead just claim it is still monthly/weekly whatever and it just so happened the employee got paid more money.
                Last edited by ASB; 8 December 2011, 16:08.

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                  #38
                  Originally posted by LisaContractorUmbrella View Post
                  There aren't MASSIVE savings if you are inside IR35 - your salary still has to be processed through PAYE so the tax principals are identical. The only difference is that 95% of income is taken as salary with a Ltd Co with the other 5% being retained within the company
                  Assuming

                  1) the company is VAT registered
                  2) the company is on FRS

                  then there is some additional income that you can get from being Ltd over umbrella, regardless of IR35 status.
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                    #39
                    I give up with Parasol they must be one of the most expensive Umbrella's to use not to mention the fact they hide everything in employments costs yet insist it's all legal.
                    In Scooter we trust

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                      #40
                      Originally posted by The Spartan View Post
                      I give up with Parasol they must be one of the most expensive Umbrella's to use not to mention the fact they hide everything in employments costs yet insist it's all legal.
                      I realise they have failed to explain it to your satisfaction and you are entirely convinced you are being ripped off. But, in defence of parasol (who I have never used) and any umbrella out there.

                      1/ They charge a fee. about 120 quid I think in Parasols case.
                      2/ They raise invoices based on the amount of time you work at your clients. (What you presumably regard as "your money").

                      They have to pay:-

                      1/ Employers national insurance. Clearly this can only come out of "your money" or their fee. Obviously it is the former.
                      2/ Holiday pay. Assuming you are full time this is a statutory minimum of 28 days (which can include the 8 bank holidays - 9 this year and net). Again this can only come out of "your money" or their fee. Obviously it is the former. As a sanity check as a full time employee your maximum working year is likely to be 252 days, thus this is going to amount to about 8% (20/252). It is no longer permissible to "roll this up". So, you take paid holidays OR they pay it to you in some other way (perhaps at some point during the year as paid in lieu of holidays or between assignments)
                      3/ SSP/SMP. If this is due they have to pay it (of course if there is a scheme in place that is more generous than the legal requirement it's going to come from your money). If SSP is paid (which it must be at a minimum) then it is largely rebated by the Gov (92%). I would expect the modest difference to probably come from the fee - it's part of the risked cost of the business.
                      4/ Potentially pay between assignments. Again this has to be retained from "your money".

                      I certainly haven't seen what to me is a satisfactory explanation of this and details of how it is presented to the employee (but given I'm not a user of one it doesn't really matter).

                      What I would expect to see is:-

                      a) A legally compliant payslip. This should be simple and of the form:-

                      Salary x,xxxx (this being the actual amount of "wages" from the above)
                      Tax x,xxxx
                      EErs NI x,xxxx
                      EEs NI x,xxxx

                      However, I'm not sure this is allowed any more, HMRC have recently been suggesting more detail is required.

                      b) A simple subsiduary breakdown of how the billed amount got to salary. Some thing like:-

                      Invoiced x,xxxx
                      Expenses x,xxxx
                      Holiday Pay retained x,xxxx
                      Pay between assignments retained x,xxxx

                      Er's NI x,xxxx
                      Total Gross pay x,xxxx

                      Paid to you
                      - Net pay: x,xxxx
                      - Expenses x,xxxx

                      Stephen doesn't seem to have explained this effectively, he could do it by a simple worked example in my view. The same also applies to Lisa, I don't think she has really covered it either.

                      However, I do not expect that either of them are operating "hidden costs" in any way whatsoever. Anything retained above the agreed fee I am entirely certain is to provide the mandated benefits for their employees.

                      ---------------------------------

                      What seems to be unclear is that certain employment costs are retained "for your benefit". However it is unclear exactly what they are, and it's also unclear as to precisely how you benerift from them. In effect when you get them.

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