working through an umbrella & paying employer's NIC

[lawnmower]

If you work through an umbrella company - should you have to pay employer's national insurance contributions (as well as employee's)?
Is that usual - it doesn't seem right.

[eek]

If you work through an umbrella company - should you have to pay employer's national insurance contributions (as well as employee's)?
Is that usual - it doesn't seem right.

It is right - the rate the agency advertised the contract at and pays your umbrella company is the umbrella rate (HMRC now recommend it's called the assignment rate).

From that assignment fee the umbrella fee and all the umbrella company's employment costs (holiday pay, pension, employer NI, apprenticeship levy) need to be deducted before you arrive at the Taxable pay / PAYE figure from which your take home pay is calculated.

The agency should have given you a Key Information Document before you began work (and ideally should have done so when you applied for the job). If they didn't you probably have a valid reason to claim the money back when you finish the contract via someone like umbrellareclaim*


* I'm at the point where agencies should be doing the basics - if they aren't (i.e. by not providing the appropriate legally required documents prior to someone beginning the contract) - it seems worthwhile trying to get the money back.

[northernladuk]

https://forums.contractoruk.com/umbr...loyers-ni.html

https://forums.contractoruk.com/busi...t-of-rate.html

We have an accounting section of the forum and we also have an Umbrella specific section where this should have gone. This has been covered a number of times in there.

You could have a browse or try a search by typing the following in to google umbrella employers ni site:contractoruk.com/forums

Give your brolly a ring and ask them to explain in detail what the situation is and don't let them go until you are 100% clear and happy with the answer. Do the same for the agency. Don't let them pull the wool over your eyes.

[lawnmower]

thank you. just gone over to this system and it looks a bit weird at first.


btw you know the current discussions in parliament re umbrellas, what's that about in a nutshell - is employee paying ENIC the type of thing they are trying to outlaw.

[eek]

thank you. just gone over to this system and it looks a bit weird at first.


btw you know the current discussions in parliament re umbrellas, what's that about in a nutshell - is employee paying ENIC the type of thing they are trying to outlaw.

Nope - they are trying to fix various problems with the market place.

Which include -

• tax schemes pretending to be umbrellas
• Outright tax fraud - while pretending to be umbrellas
• Umbrellas stealing unclaimed holiday pay (as a well paid contractor insist on rolled-up / paid immediately holiday pay)
• Umbrellas skimming a few quid within their employment costs
• Umbrelllas claiming apprenticeship levy when they aren't big enough to pay it
• "Mini-Umbrellas" intentionally creating multiple small firms to claim flat rate VAT allowances and the small employer £4000 employer NI allowance

What you won't notice is that a lot of the very large umbrella firms are doing absolutely nothing here (as are the FCSA) for they are guilty of a lot of the above.