Originally posted by WTFH
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Agency charging 12.5% - Apprenticeship Levy
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Originally posted by OrangeJuice View PostTruth be told, I don't understand what the agency is telling me...
I'm unsure what to ask the agency to make this clearer, but will ask specifically about the breakdown of the 12.5% (which is in addion to the NIC and PAYE tax)
The 12.5% is made up of Employer NICs but not Employee NICs.
Employee NICs and PAYE tax are taken separately from Employer NICs
Perhaps ask them simply to provide a breakdown of the figures. Don't mention NIC, PAYE, tax, Apprentice Levy or anything else. Just ask them to give you the breakdown.…Maybe we ain’t that young anymoreComment
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Originally posted by OrangeJuice View PostTruth be told, I dont understand what the agency is telling me. Apologies if this is all bitty.
I've copied below a response from the agency :
The 12.5% deduction is the difference between the rate agreed in your contract and the higher rate on which we should be paying VAT (if applicable, i.e. your company is VAT registered).
The PAYE tax and NIC are the tax deductions we are required to make prior to making payment due to the new legislation for public sector contractors viewed as inside IR35.
The PAYE tax and NIC deductions are calculated on the pay rate agreed in your contract, and are based on tax information provided by yourself and HMRC.
I'm unsure what to ask the agency to make this clearer, but will ask specifically about the breakdown of the 12.5% (which is in addion to the NIC and PAYE tax)
Technically if the contract was advertised as inside IR35 the rate you receive should be the rate that was advertised - Employers NI should have been deducted by the agency out of what they are charging the customer, not out of your £430 a day. The amount you receive will however have employee NI and Income tax deducted and either paid by the agency to HMRC (if they have employed you) or paid on behalf of your limited company if you still have a limited company.Last edited by Contractor UK; 12 October 2018, 21:48.Comment
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Originally posted by WTFH View PostEr's NIC = Employers NIC
So, 12.5% is NOT Apprenticeship Levy. in fact, doing the calculations, you're not paying any Apprenticeship Levy at all.
£430 a day gross would be £94,600 on a 220 day year.
Employer NICs on that would be £11,892.29.
Divide that down and you get £54.06 per day in Employer NICs.
Take that off your £430 and you end up with £375.94
Hrs/Days Type Rate (£) Amount (£)
4.00 Daily Standard Rate 430.00 1,720.00
5.00 Daily Standard Rate 430.00 2,150.00
5.00 Daily Standard Rate 430.00 2,150.00
5.00 Daily Standard Rate 430.00 2,150.00
5.00 Daily Standard Rate 430.00 2,150.00
PAYE Tax -2,692.46
NIC Employee -474.00
12.5% Deduction -1,290.00
Total before VAT (£) 5,863.54Comment
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We need Lucy. She loves talking about Employers NIC.'CUK forum personality of 2011 - Winner - Yes really!!!!Comment
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Originally posted by OrangeJuice View PostBelow is a copy of one of the remittance notes, does the above tally ?
Hrs/Days Type Rate (£) Amount (£)
4.00 Daily Standard Rate 430.00 1,720.00
5.00 Daily Standard Rate 430.00 2,150.00
5.00 Daily Standard Rate 430.00 2,150.00
5.00 Daily Standard Rate 430.00 2,150.00
5.00 Daily Standard Rate 430.00 2,150.00
PAYE Tax -2,692.46
NIC Employee -474.00
12.5% Deduction -1,290.00
Total before VAT (£) 5,863.54
As I said above, perhaps ask them to provide you with a breakdown, do not tell them various things you think you want to hear, just ask them to give you a breakdown of your pay.…Maybe we ain’t that young anymoreComment
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Originally posted by OrangeJuice View PostWhat I dont understand is why the '12.5% Deduction -1,290.00 ?
They told you it was Employers NICs.
Please read posts 10, 11, 12 & 13
https://forums.contractoruk.com/acco...ml#post2567072…Maybe we ain’t that young anymoreComment
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Originally posted by WTFH View PostHave you ignored everything I've said?
They told you it was Employers NICs.
Please read posts 10, 11, 12 & 13
https://forums.contractoruk.com/acco...ml#post2567072
Anyway, I would be asking for breakdown of "deductions". It could be the OP's contribution to the agent's Jaguar for all he knows...Blog? What blog...?Comment
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Originally posted by OrangeJuice View PostWhat I dont understand is why the '12.5% Deduction -1,290.00 ?Comment
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