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need clarification about NIC's

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    need clarification about NIC's

    Hi I’ve had a good read through all the threads but can’t find an exact answer to my situation. Sorry in advance but I think it will be easier if I explain what and where I’ve been working for the past 2 years before asking your advice on my last 3 paragraphs.

    For the past 2 year I have been working away from home and living in lodgings and travelling home every 2nd weekend. I have worked for 2 different companies during this time.

    The first company told me I needed a UTR number and that I had to invoice them for the hours I worked and deducted 20% of my earnings I was paid the remainder. I paid my NIC’s twice a year when HMRC ? sent me my bill and completed an online tax return last year.
    The 2nd place also used my UTR number but I was employed through an agency. The agency advised me that I needed to register with (what I assume is an umbrella company) to cut a long story short, I registered with T and L contracting but this time I was sent a self bill with no deductions on it apart from their fee. I understand that I’ll need to complete and online tax return with my expenses and plan to do that soon.

    I am now back at home in Scotland and again working with an agency. I think I’m now classed as an “a contractor” Before the work commenced I had to provide my National Insurance number to them and I was advised that I could either go PAYE or continue being paid with the same company I used whilst working in London. I opted to stay with T and L contracting but I’m still getting self bills with no deductions at all being made. So ………. How do I go about paying my NIC’s now ? and do I need to pay T and L contractors NIC’s as well ? and if that is the case will HMRC bill me for the employers % and my own % (sorry I don’t even know what the %’s are ?) I know when I was in London the NIC’s were very small so getting billed twice a year was fine, but if my way of thinking is correct if I continue this way then I’ll end up with a massive bill?

    I’m on a better hourly rate than I would have been had I gone PAYE, but from reading some of the posts on here I think I might be better off being on the lower rate and letting the agency employ me rather than T and L ? My contract with them says “ I fall outside of35” and I also had to opt out of “conduct regulations 2003” My contract also says T and L will require a copy of my “certificate of Incorporation” and also asked that I supply a copy of my “VAT registration certificate” I don’t even know what these are or where I would get them.
    I know this is a bit long winded but I have a gut feeling that I’ve done everything wrong. I have been working for 6 weeks now and really need to get this addressed ASAP, sadly I get bamboozled easily over the phone so would really appreciate the advice from you guys. I find it much easier to read and digest things, rather than phone calls.

    Some of my work mates have told me to register with an umbrella company from Jersey and told me they get paid the minimum wage from them and the rest as a loan and that the company will take care of my NIC’s. This sounds to good to be true, so no doubt it can come back and bite you ?

    #2
    welcome

    Oh dear, you are in a bit of a pickle aren't you. First question - have you registered with HMRC as a sole trader or set up a Limited Company?
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      #3
      Wow, someone really needs to understand their situation better. I switched off at the point you said 'Employed though an agency'. I can't see how anyone can help you beyond that until you understand your own situation better.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

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        #4
        Originally posted by billyd View Post
        Some of my work mates have told me to register with an umbrella company from Jersey and told me they get paid the minimum wage from them and the rest as a loan and that the company will take care of my NIC’s. This sounds to good to be true, so no doubt it can come back and bite you ?
        Suicide...

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          #5
          Try emailing a specialist accountant, but tell them you're not available on the phone. It happens a lot as people are often at work and unable to sneak out, so they should be fine in answering any questions via email. Send a few firms a list of questions and you'll then have lots to compare, and cross check until you understand it all.
          ContractorUK Best Forum Adviser 2013

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            #6
            Originally posted by LisaContractorUmbrella View Post
            welcome

            Oh dear, you are in a bit of a pickle aren't you. First question - have you registered with HMRC as a sole trader or set up a Limited Company?
            When I worked in London, yes i registered with HMRC as a sole trader, and no I've never set up a Limited Company. To be honest I'm not too worried about all the London work, I'm more worried about the situation I'm in now that I'm back at home.
            Last edited by billyd; 18 November 2013, 14:48. Reason: typo

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              #7
              Originally posted by northernladuk View Post
              Wow, someone really needs to understand their situation better. I switched off at the point you said 'Employed though an agency'. I can't see how anyone can help you beyond that until you understand your own situation better.
              I would like to understand my own situation better, hence the reason for asking for help from you guys, OK I realise I've messed up somewhere along the line, would it be correct if I said I'm now employed through T and L contracting, seeing as it's them that is processing my wages ?

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                #8
                Originally posted by billyd View Post
                When I worked in London, yes i registered with HMRC as a sole trader, and no I've never set up a Limited Company. To be honest I'm not too worried about all the London work, I'm more worried about the situation I'm in now that I'm back at home.
                Then HMRC will be expecting you to submit a tax return for the work that you have done as a sole trader - this link will tell you what your responsibilities are https://www.gov.uk/set-up-sole-trader. Your current situation would appear to be that you are paying money to T & L and they are doing nothing other than taking money from you. Have you signed any sort of contract with this company? If not I would suggest that you declare this income on your self assessment as well and pay your taxes accordingly.

                With regard to the company in Jersey with the minimum wage and loans - have a look here HMRC Scheme Enquiries and I think you'll realise that it's not a great idea.
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                  #9
                  Originally posted by billyd View Post
                  I would like to understand my own situation better, hence the reason for asking for help from you guys, OK I realise I've messed up somewhere along the line, would it be correct if I said I'm now employed through T and L contracting, seeing as it's them that is processing my wages ?
                  Not unless you have signed a contract of employment - and they are not processing your wages as they are not applying PAYE - they just seem to be taking a fee for doing precisely squat
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                    #10
                    Hi Lisa, yes I have signed a contract with them, I think I've been very stupid. The last paragraph of my contract says this

                    This contract is entered into with your company on the understanding that you are operating in business on your own account, and that having considered your position and taken advice you are satisfied that you outside of the difiniton of a "worker" or "agency worker" as defined in Regulations 2 and 3 of the Agency Workers Regulations 2010, and that you fall outside of IR35. You are required to sign a declaration to this efect as part of the Contract Confirmation Documentation enclosed with this letter.

                    Is it possible that I have unwittingly set myself up as a LTD Company ? and that's the reason they have asked for VAT Registration Certificate.

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