Newbie need helped please..Do I need to be on W1 Tax code- Umbrella

[Lootoo]

Hi

Having got a letter a very small bill from HMRC about not being about collect underpaid tax through my tax code, I thought hmmmm. (This underpayment was something to do with health care benefits on a job I got made redundant from.)

As it goes I had thought my current take home pay seems less since contracting than expected, but I do know there are some additional costs on umbrella, but now looking into the above I see I am on a W1 tax code.

I'm on a hourly rate, putting in the same hours each week (unless I take the day off, which I don't ) so normally 40 hours a week. I get paid weekly through an umbrella.

Been contracting through an umbrella since July 2014, this contract since mid october 2014 and looking at my pay slips have been on a W1 since I started with them. Both contracts through same place.

Do I need to be on a W1 code? Who should I contact if this is wrong the Umbrella or HMRC?

Thanks in advance Lo

[Batcher]

Hi

Having got a letter a very small bill from HMRC about not being about collect underpaid tax through my tax code, I thought hmmmm. (This underpayment was something to do with health care benefits on a job I got made redundant from.)

As it goes I had thought my current take home pay seems less since contracting than expected, but I do know there are some additional costs on umbrella, but now looking into the above I see I am on a W1 tax code.

I'm on a hourly rate, putting in the same hours each week (unless I take the day off, which I don't ) so normally 40 hours a week. I get paid weekly through an umbrella.

Been contracting through an umbrella since July 2014, this contract since mid october 2014 and looking at my pay slips have been on a W1 since I started with them. Both contracts through same place.

Do I need to be on a W1 code? Who should I contact if this is wrong the Umbrella or HMRC?

Thanks in advance Lo

Call HMRC, give them all your details and ask them if your tax code is correct.

[malvolio]

Call HMRC, give them all your details and ask them if your tax code is correct.

Or, since you are paying the umbrella to manage your salary and PAYE/NICs and expenses, get them to sort it out.

[VelcroPower]

Or, since you are paying the umbrella to manage your salary and PAYE/NICs and expenses, get them to sort it out.

HMRC won't speak to the Umbrella company about an individual's tax affairs.

The Week 1 indicator shouldn't affect your normal take home unless the numbers before it are below 1000 (which it sounds like it is due to them recovering tax). It would only really effect a couple of payrolls as the cumulative allowances sort themselves out.

Your take home will be lower to what was given to you initially on your sales call (or if you have used any on-line calcs) as just about all of the calculators assume a 1000L tax code.

Did you tick box B on a P46 when you joined the Umbrella or did you have a P45 with a week 1 tax code on it?

Either way just call HMRC and they should be able to send a revised notice of coding without the W1 flag to your Umbrella. Depending on your previous earnings you may see a dip/rise in your take home pay and then it settle back own to what you have previously been experiencing.

[malvolio]

HMRC won't speak to the Umbrella company about an individual's tax affairs.

Maybe not. But they can explain to their customer why their pay is what it is and what they need to do about it.

[VelcroPower]

Maybe not. But they can explain to their customer why their pay is what it is and what they need to do about it.

I believe the OP's question was "Do I need to be on a W1 code? Who should I contact if this is wrong the Umbrella or HMRC?"

So I thought I would answer that and then give some (hopefully) helpful additional information based on the info in the original post. The Umbrella company will answer that specific question with "Contact HMRC regarding your tax code"

[Lootoo]

HMRC won't speak to the Umbrella company about an individual's tax affairs.

The Week 1 indicator shouldn't affect your normal take home unless the numbers before it are below 1000 (which it sounds like it is due to them recovering tax). It would only really effect a couple of payrolls as the cumulative allowances sort themselves out.

Your take home will be lower to what was given to you initially on your sales call (or if you have used any on-line calcs) as just about all of the calculators assume a 1000L tax code.

Did you tick box B on a P46 when you joined the Umbrella or did you have a P45 with a week 1 tax code on it?

Either way just call HMRC and they should be able to send a revised notice of coding without the W1 flag to your Umbrella. Depending on your previous earnings you may see a dip/rise in your take home pay and then it settle back own to what you have previously been experiencing.

Ok so I don't need to be on W1 coding, but it won't make much difference? I will call them now... I am on 970LW1 if that means anything to anyone, problem was from something to do with medical insurance apparently ... I had a p45 without a W1 code when I joined umbrella... thanks everyone

[tractor]

...

HMRC won't speak to the Umbrella company about an individual's tax affairs.

The Week 1 indicator shouldn't affect your normal take home unless the numbers before it are below 1000 (which it sounds like it is due to them recovering tax). It would only really effect a couple of payrolls as the cumulative allowances sort themselves out.

Your take home will be lower to what was given to you initially on your sales call (or if you have used any on-line calcs) as just about all of the calculators assume a 1000L tax code.

Did you tick box B on a P46 when you joined the Umbrella or did you have a P45 with a week 1 tax code on it?

Either way just call HMRC and they should be able to send a revised notice of coding without the W1 flag to your Umbrella. Depending on your previous earnings you may see a dip/rise in your take home pay and then it settle back own to what you have previously been experiencing.

When you are on W1/M1 there are no cumulative allowances. That is the whole point of the code. Cumulative allowances only come into play when the tax office issues you with a proper cumulative code. If you are still on W1/M1 code at the end of the tax year, your employer/umbrella must put you on the appropriate cumulative code automatically as soon as the year starts e.g. next 6th April.

If the tax office issues you with a proper cumulative code during the current tax year, your employer/umbrella must begin operating that tax code at the next payroll run and cumulative allowances along with any rebate will be calculated and paid to you providing any rebate is not above the limit (which I cannot remember but you will be able to look it up). If any rebate is above the limit, the tax office will refund it to you directly.

[VelcroPower]

umm yeah the point I was making was that cumulative vs W1 won't affect take home pay over a period of time which is what the OP thought could happen -more the period during which the cumulative code comes into affect compared to the W1 tax code used previously.

Also if the OP has a cumulative tax code issued via P6 that may well have previous earnings on there (based on them starting July 2014) therefore possibly making tax payable rather than generating a refund.

But thanks for explaining cumulative allowance to someone that's worked with payroll for >25 years

[tractor]

umm yeah the point I was making was that cumulative vs W1 won't affect take home pay over a period of time which is what the OP thought could happen -more the period during which the cumulative code comes into affect compared to the W1 tax code used previously.

Also if the OP has a cumulative tax code issued via P6 that may well have previous earnings on there (based on them starting July 2014) therefore possibly making tax payable rather than generating a refund.

But thanks for explaining cumulative allowance to someone that's worked with payroll for >25 years

I wasn't explaining it to you, it was for the OP who would have been confused by your claim which you repeat above. Of course cumulative vs W1 would affect take home over a period of time dependant upon your previous earnings and any non-earning period during the same tax year. That is the whole point of it