New contract inside IR35 via brolly

[philgo]

Lol

Multiple rate by 53% to find your take home

End of - stop dreaming


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I know thanks - not dreaming - just discovering the new contracting umbrella world ....

[northernladuk]

I know thanks - not dreaming - just discovering the new contracting umbrella world ....

Plenty of umbrella calculators around two or three came around the same, not for off tarbys cal and one was ridiculously off so do a few to be sure.

[eek]

I find that hard to believe.

Giant is one that do...

[philgo]

Plenty of umbrella calculators around two or three came around the same, not for off tarbys cal and one was ridiculously off so do a few to be sure.

Sure. The one provided by Sapphire the brolly is obviously way off..., no vacations, no pension contribution etc...

[psychocandy]

I've been through a brolly for years. yes this is how it works.....

£400 is what the agency pay to the brolly on your behalf. (of course agency get more from client as per normal).
Out of this the brolly produce the payslip. Out of this £400 come employers NI and the brolly fee (around £20-£30 a week). Whats left then is you're real salary.

This then gets processed as if you are an employee of the brolly. So NI, tax at the proper rate etc. They may even offer pension, childcare vouchers etc.

So YES its a shed load of tax and NI to be paid. BUT you should know this upfront BEFORE accepting the gig. I reckon take home for me is about 51% of the gross day rate.

I went from outside IR35 via limited with the usual expenses, low salary, split dividends with the mrs shannanigans to an inside IR35 public sector contract. Fortunately at the time, the client knew the score and hiked rates. I ended with same take home as previous outside IR35 gig.

I reckon you need an uplift of about 35% to cover the extra tax for an inside gig. i.e. You're £400 would equate to under £300 for a "normal" gig.

Alas, no-one is going to the employer NI for you. The client, as normal, wants to chuck a day rate at the agent as they've always done. The brolly arent going to pay it out of the £25 per week you give them. So wheres it come from?

I disagree with people who don't like inside gigs. If the figures for take home add up its actually LESS hassle.

[northernladuk]

I disagree with people who don't like inside gigs. If the figures for take home add up its actually LESS hassle.

I'd agree with this. The odd thing is I've never felt so wealthy when I was inside. Nice fat chunk appears every month, none of this scrimping around with divs to keep it low, constantly shifting money around, admin work etc. Was pretty refreshing to be fair. Need a rethink about a personal warchest rather than in the company but that was just a slight change. Enjoyed the gig and moved on.

[Lance]

I'd agree with this. The odd thing is I've never felt so wealthy when I was inside. Nice fat chunk appears every month, none of this scrimping around with divs to keep it low, constantly shifting money around, admin work etc. Was pretty refreshing to be fair. Need a rethink about a personal warchest rather than in the company but that was just a slight change. Enjoyed the gig and moved on.

indeed.
I've never done inside, but the idea of doubling my take home is not unattractive.
Not as good as having a hefty warchest, and knowing I can do no work for 3 years and still have the same take home cash though.

[northernladuk]

indeed.
I've never done inside, but the idea of doubling my take home is not unattractive.
Not as good as having a hefty warchest, and knowing I can do no work for 3 years and still have the same take home cash though.

You just put it in an ISA and call it savings instead.

[malvolio]

Just to clarify the ErNICs and Levy thing...

These are both the end client's liability . What actually happens is that the rate for the job that is passed on to teh agency is the total cost to the end client, so the £400 includes all the legal overheads (the agency's margin is separate, orf course). the various fees, taxes and levies come out of that at the umbrella and you get the balance - around 55% or so of the original.

So what you were offered was not a £400 a day contract but a roughly £325 a day one which is the amount including the taxes you are liable for (and we'll ignore holiday pay and pension provision for simplicity).

Basically the agency is advertising the rate at the full cost to the client's budget figure, knowing damn well that it is not the actual rate for the gig, but you wouldn't have accepted the real rate anyway. Deceptive but sadly legal unless you keep your wits about you. You're not paying the NICs and Levy costs, they were never in your fees.

[philgo]

I've been through a brolly for years. yes this is how it works.....

£400 is what the agency pay to the brolly on your behalf. (of course agency get more from client as per normal).
Out of this the brolly produce the payslip. Out of this £400 come employers NI and the brolly fee (around £20-£30 a week). Whats left then is you're real salary.

This then gets processed as if you are an employee of the brolly. So NI, tax at the proper rate etc. They may even offer pension, childcare vouchers etc.

So YES its a shed load of tax and NI to be paid. BUT you should know this upfront BEFORE accepting the gig. I reckon take home for me is about 51% of the gross day rate.

I went from outside IR35 via limited with the usual expenses, low salary, split dividends with the mrs shannanigans to an inside IR35 public sector contract. Fortunately at the time, the client knew the score and hiked rates. I ended with same take home as previous outside IR35 gig.

I reckon you need an uplift of about 35% to cover the extra tax for an inside gig. i.e. You're £400 would equate to under £300 for a "normal" gig.

Alas, no-one is going to the employer NI for you. The client, as normal, wants to chuck a day rate at the agent as they've always done. The brolly arent going to pay it out of the £25 per week you give them. So wheres it come from?

I disagree with people who don't like inside gigs. If the figures for take home add up its actually LESS hassle.

Thanks for your thoughts. I agree that the inside gigs is easier and can be nice. My issue right now is more that the rate hasn't been uplifted by the client to cover Employer's NI.
My second issue is that I discovered it myself by asking the agent. His response was "I don't know, I need to check if end client would cover Employer's NI and uplift the rate". he came back yesterday saying the client wouldn't uplift the rate but in the meantime wrote me an offer email mentioning day rate at "£400" so not mentioning it as an assignment rate => no upfront preparation at all
My third issue is that this agent forced me to work with a specific umbrella => very weird

The situation now :
I got an illustration from the umbrella where all taxes have been obviously deducted. I also got a contract from the umbrella that I need to sign. It came with a "drafted assignment schedule" so missing information like "Client: TBC by customer", no rate mentioned, no notice period mentioned etc...Is it the way it should work?
When I asked to get a copy of the assignment work to the Umbrella they said I should receive "a separate contract with my assignment schedule" from the agency - I haven't - should I receive that from the agent?

Thanks for helping out












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