Employer's NIC

[beaker]

Why do I need to pay employer's NIC when contracting through an umbrella?

Surely the Umbrella company is my employer and is responsible for paying this...?

[beaker]

Oh I get it...

My client has offered to put me on the payroll. They've said they would pay employer's NIC.

Does this mean I could get paid directly by them without the need for a ltd/umbrella company (ie self-employed) and my take-home pay would increase?

Am I missing anything here?

[TheFaQQer]

Oh I get it...

My client has offered to put me on the payroll. They've said they would pay employer's NIC.

Does this mean I could get paid directly by them without the need for a ltd/umbrella company (ie self-employed) and my take-home pay would increase?

Am I missing anything here?

Not necessarily. If they are putting you on their payroll, then you just need to check what they are doing about expenses etc.

You're probably better off, though.

[SueEllen]

Oh I get it...

My client has offered to put me on the payroll. They've said they would pay employer's NIC.

Does this mean I could get paid directly by them without the need for a ltd/umbrella company (ie self-employed) and my take-home pay would increase?

Depends on the salarly they are offering. They may offer you a lower salarly to cover this and the other benefits you incur.

Am I missing anything here?

If client puts you on their pay roll then you would end up being a permanent employee with an employer and employment rights such as holiday pay and rights to join their pension scheme. This also means you won't be able to claim travel expenses as you now have a permanent place of work, your employers office.

[beaker]

If client puts you on their pay roll then you would end up being a permanent employee with an employer and employment rights such as holiday pay and rights to join their pension scheme. This also means you won't be able to claim travel expenses as you now have a permanent place of work, your employers office.

Thanks for this... I asked if this would mean I would become permanent, they said no... I actually don't care, as long as I get the same rate!

Could I be self-employed and on their payroll? Are there any other financial considerations of being self employed?

[SueEllen]

Thanks for this... I asked if this would mean I would become permanent, they said no... I actually don't care, as long as I get the same rate!

Could I be self-employed and on their payroll? Are there any other financial considerations of being self employed?

Sorry should have explained better.

Legally you would be seen as their employee not a self-employed person even if you are on a fixed term contract so employment legislation covering employees would kick in, and importantly for tax purposes you have a permanent place of work so you can't claim travel expenses to your place of work.

Different companies treat contractors and employees in different ways so for example in some companies only employees are made to go to health and safety meetings, there as in other companies both groups have to go to the meetings.

Lots of companies have different policies covering employment of different lengths so you likely to miss out on benefits like health insurance but could be in line for other benefits depending on how long your contract is for i.e. their pension scheme. You also should be able to take days of pro-rata and claim holiday pay for them.

Therefore you need to find out exactly what they are offering you, read the company's employment policies and benefits (have a look at their intranet if you can get access to it) and then calculate whether it's better to be on their payroll or not.

Read this for more information on your rights:
http://www.dti.gov.uk/employment/emp...page18475.html

BTW if you have low travel expenses and there are other benefits you would have access to and would take up then it would be worth going on their payroll especially if their HR people where on the ball to the fact that you were legally entitled to them.

[TheFaQQer]

Thanks for this... I asked if this would mean I would become permanent, they said no... I actually don't care, as long as I get the same rate!

Could I be self-employed and on their payroll? Are there any other financial considerations of being self employed?

I would think it's unlikely that they would do self employed and payroll - if you don't pay your taxes then they become liable for them, which is why agencies push you down the LTD or umbrella route.

See what they benefits are of being an employee before you make a decision.

[beaker]

I would think it's unlikely that they would do self employed and payroll - if you don't pay your taxes then they become liable for them, which is why agencies push you down the LTD or umbrella route.

See what they benefits are of being an employee before you make a decision.

Oh I get paid directly from the client, not an agent...

[SueEllen]

Oh I get paid directly from the client, not an agent...

Doesn't mean anything when you talking about the OP situation. In your case you have just cut out the middle man saving your client money and maybe earning you more.

[TheFaQQer]

Oh I get paid directly from the client, not an agent...

Yes, but if you are self employed, and don't pay your taxes, then HMRC can go after the client. Which is why they don't like to do it like that.