Advice needed please.

[RSTurbo50]

Ok guys my first post.

I am just about to start a new job through an agency. I am being paid £10.50 an hour through this agency. The agency put me through to an umbrella company named paymatters. I am being paid on a limited company basis or so i think. When I signed up with paymatters they asked all the relevant questions. They indicated that I could claim expenses of 40p per mile (doing 300 miles a week commuting) equating to £120 per week and £10 a day food. They worked out that I would be taking home £310 a week after all tzxes taken out.

Now, this does not seem right to me and after speaking to other people, they have indicated I should be picking up much more and it doesnt seem as though I am taking advantage of tax. Now, I dont know much about PLC's, but does this sound as though this umbrella company are paying me through PAYE or as a limited company??

DO I need to set myself up as a limited company myself or would companies do this for me??

This is all new to me so any help would be appreciated.

Stuart

[NotAllThere]

Before making a second post, I suggest you follow some of the links on this site - first timers is probably a good one. You can also read some of the sticky posts.

You are not in a ltd co, you are in an umbrella company and are being paid PAYE. Importantly, out of your £10.50 you are paying umbrella fees, income tax, ernic, eenic and your expenses.

£10.50 an hour, so maybe £80 a day = £400 a week. £90 means you are taking 78% home. That's a good return.

[cojak]

Basically you need your next contract to pay you more than £10.50 an hour.

Ready the stickies first (both here and in Business/Contracts). Some people want to use brollies for their 1st contract, some Ltd + accountants.

Remember that accountants are going to cost you approx £70-80 pm, so it will cost you whatever.

Do your research.

[Gonzo]

RSTurbo50 - what line of work are you in?

£10.50.per hour is very low for contracting so I am curious to find out if you are really a contractor or someone who would normally expect to be an agency temp.

[worzelGummidge]

To be harsh but truthful.
Do not bother with contracting on that rate it is too low to make it economically viable.
Do yourself a favor in terms of time and money and either do some temping by performing work direct through an agency or look for a permy role.

[pmeswani]

Ok guys my first post.

I am just about to start a new job through an agency. I am being paid £10.50 an hour through this agency. The agency put me through to an umbrella company named paymatters. I am being paid on a limited company basis or so i think. When I signed up with paymatters they asked all the relevant questions. They indicated that I could claim expenses of 40p per mile (doing 300 miles a week commuting) equating to £120 per week and £10 a day food. They worked out that I would be taking home £310 a week after all tzxes taken out.

Now, this does not seem right to me and after speaking to other people, they have indicated I should be picking up much more and it doesnt seem as though I am taking advantage of tax. Now, I dont know much about PLC's, but does this sound as though this umbrella company are paying me through PAYE or as a limited company??

DO I need to set myself up as a limited company myself or would companies do this for me??

This is all new to me so any help would be appreciated.

Stuart

Your assessment of Ltd Companies and Umbrella companies is a common misconception from someone who hasn't been contracting before. I don't believe the rate you are on can justify going down the route of Ltd company.

The rate you are on, I would expect of an Office worker (e.g. Cleaner, Office Junior, etc) and would have expected to be a PAYE of that agency. However, saying this, an Umbrella solution may be most suitable to you.

You have to pay both employer and employee taxes through the income you generate and the Umbrella company pays this on your behalf. Not all Umbrella companies are upfront about this (sadly).

At the end of the day, the Umbrella Company wants your business, and won't tell you everything you need to hear.

[Fred Bloggs]

To be harsh but truthful.
Do not bother with contracting on that rate it is too low to make it economically viable.
Do yourself a favor in terms of time and money and either do some temping by performing work direct through an agency or look for a permy role.

Good advice.

[The Wikir Man]

Before making a second post, I suggest you follow some of the links on this site - first timers is probably a good one. You can also read some of the sticky posts.

You are not in a ltd co, you are in an umbrella company and are being paid PAYE. Importantly, out of your £10.50 you are paying umbrella fees, income tax, ernic, eenic and your expenses.

£10.50 an hour, so maybe £80 a day = £400 a week. £90 means you are taking 78% home. That's a good return.

78% return is practically impossible, unless there is something dodgy going on here - if it were, we'd all be doing it through an umbrella.

Remember, you need to keep receipts for the expenses that you incur, they need to be legitimate, and you can only claim for what you spend - anyone telling you to claim £10 a day just because that's their policy is not being completely honest with you.

[Paddy]

Ok guys my first post.

I am just about to start a new job through an agency. I am being paid £10.50 an hour through this agency. The agency put me through to an umbrella company named paymatters. I am being paid on a limited company basis or so i think. When I signed up with paymatters they asked all the relevant questions. They indicated that I could claim expenses of 40p per mile (doing 300 miles a week commuting) equating to £120 per week and £10 a day food. They worked out that I would be taking home £310 a week after all tzxes taken out.

Now, this does not seem right to me and after speaking to other people, they have indicated I should be picking up much more and it doesnt seem as though I am taking advantage of tax. Now, I dont know much about PLC's, but does this sound as though this umbrella company are paying me through PAYE or as a limited company??

DO I need to set myself up as a limited company myself or would companies do this for me??

This is all new to me so any help would be appreciated.

Stuart

You really need to think what you are doing and what the agent is up to. It is possible that your agent is charging the end client £30-£40 per hour.

Secondly, if you are claiming £10 a day for lunch, HMRC may smell a rat because why would you “spend” an hours earnings per day on lunch.

[Gonzo]

To be harsh but truthful.
Do not bother with contracting on that rate it is too low to make it economically viable.

I agree with this but that is why I would like to hear from the OP about what his/her line of work is, before we condemn them for what they are doing.

I have heard other people report that the response from temp agencies to the Government's drive to give temp workers increased rights has been that they have pushed temps over to the umbrella companies to avoid giving them those rights. In the long run this is in noone's interest.