Brolly paying you early

**filthy1980** · 6 December 2010, 10:54

change your brolly

**LisaContractorUmbrella** · 6 December 2010, 13:31

Originally posted by Theonenonly View Post

First of all let me say I hate my umbrella.

I wont name it but if you search some of my earlier stuff you will get its name lol.

My pay date is set at the 1st, two month ago my agency didnt pay till the 2nd so I got my money on the 3rd.

The next month rolled around and being fairly new to the game I expected to be paid on the 1st. When the cash didnt come I phoned to enquire and was told that they couldnt pay me because the full financial month hadnt rolled over yet and it would mess my tax up, there is also a bank holiday so they couldnt get the money to me until the 8th (after bank holiday and weekend)

I again accepted this as it sounded right.

This month I was expecting to get paid on the 8/9th as this would be a full roll over month.......

They paid me on the first which caused me to be hit by double tax at the 40% bracket so I only ended up with about 49% of the gross of my pay

I spoke to the brolly who told me it was my fault for having my payment date set to the 1st (even though the month previous they explained they couldnt pay me due to the date being to early)

So I am now down hundreds of ££ because of this mix up and I have been told there is nothing that they can do.

I have asked for them to take back the payment and reissue it to me after the 9th but they say this is illegal and HMRC will hang them for it.

I have spoken to HMRC and they tell me that I will get it back when they do the end of year tax

So for now it looks as though i've lost it

Anyone elsse had a similar issue? What did you do?

You don't say who has determined your pay date as the 1st - if it is your umbrella company then they should be bound by it, unless they will only pay you when they have received funds themselves but it would then seem pointless having an appointed payment date. If your agency has determined your payment date as 1st then it is an issue you will need to discuss with them.

I would guess that the reason your umbrella company held your funds until 8th is so that it would not be necessary to roll your previous payment back. This becomes necessary when 2 payments are made in the same financial period. PAYE works in such a way that your tax free allowance (based on your tax code e.g. 647L means you can earn £6475 per annum before becoming liable for tax) can only be used once in any payroll month. A payroll month runs from the 6th of one month to the 5th of another.

From what you have said, your tax was high this month because your umbrella company did not hold onto your payment and processed it in the same payroll month as your previous payment. For instance:

Month 1 payment received £2000 tax free pay £539 = taxable pay £1461

If another payment is then received and has to be processed in the same payroll period, the original payment will be reversed and the following will happen:

Month 1 payment received £4000 (£2000+£2000) tax free pay £539 = taxable pay £3461

PAYE works on a cummulative basis so, in the original calculation, your taxable pay would be calculated as £17532.00 for the year (£1461 x 12). After the roll back has been done and the second scenario happens your taxable pay would be calculated as £41532.00 per year (£3461 x 12).

However, if your payments from the agency are regular there is a good chance that this problem will resolve itself. You have currently received 2 payments in one month - if you then have a gap of a month and receive payment again in month 3 you will have 3 tax free allowances applied to 3 payments which should sort your tax out.

Brolly paying you early