Employer's NI?

[SueEllen]

Hi Steve,

Just a quick question regarding the IR35. Do I need to worry about this if I use Parasol as my umbrella company? IR35 looks irrelevant to me if I pay the tax and ni fully (as stated in the Parasol calculator).

Regards,
Kevin

It's irrelevant if you work under an umbrella company. So you can stop worrying.

[LisaContractorUmbrella]

Hi Steve,

Just a quick question regarding the IR35. Do I need to worry about this if I use Parasol as my umbrella company? IR35 looks irrelevant to me if I pay the tax and ni fully (as stated in the Parasol calculator).

Regards,
Kevin

Hi Kevin

IR35 determines the way that you are paid - if you have your own limited company and are outside IR35 you are entitled to draw dividends from that company. If, however, you are inside IR35, whether you have your own company or not your earnings must be taxed via PAYE. Therefore, as an umbrella company will always pay you via PAYE IR35 becomes irrelevant.

HTH

[stek]

Sorry Lisa, I wasn't clear!

yes you are correct.

Surely what you mean is you will pass on the ERNI, deducting it from the contract rate, not pay it out of your fee?

[Steven@Parasol]

Hi Steve,

Just a quick question regarding the IR35. Do I need to worry about this if I use Parasol as my umbrella company? IR35 looks irrelevant to me if I pay the tax and ni fully (as stated in the Parasol calculator).

Regards,
Kevin

Morning Kevin

Just as everyone above has posted. IR35 does not apply if you are working via an umbrella company.

[Wanderer]

Surely what you mean is you will pass on the ERNI, deducting it from the contract rate, not pay it out of your fee?

There is no way their fee would cover the employer's NI.

What you get is contract income minus VAT (20%) minus Employer's NI (about 12.8%) minus Employee's NI (about 11%) minus PAYE (from 20% to 50%) = your money. Doesn't leave much when you look at it that way, does it!