how would an end user be in the clear if paying an umbrella gross ?

[rootsnall]

Apologies, I'm coming to this late and the numerous threads and stickys are not easy reading.

My end user has just gone with a blanket everyone is within IR35 from April 1st and they will be will be quote 'deducting from their day rate, employer/employee Tax and NI as advised'. I haven't seen the official letter yet but that appears to me as though you will effectively become an employee of the end user. I am happy to declare within IR35 and use pension contributions to limit my NI payments but to do that I need to get the end user to pay an umbrella my gross rate before any deductions.

How does the End User know how an umbrella ( or Ltd, or agency ) is treating the gross payments they make without looking into each individual case ? In other words they wouldn't off the hook for potential NI payments unless they deduct them themselves.

[GhostofTarbera]

They won’t let you use your pension to offset


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[craigy1874]

The fee payer is responsible for deducting the tax and nic so the end client won't care.

[JohntheBike]

The fee payer is responsible for deducting the tax and nic so the end client won't care.

By pushing anyone into an umbrella situation or PAYE, any client would be cleverly avoiding the issues associated with making an assessment. Policy changes are not subject to the rules.

[rootsnall]

The fee payer is responsible for deducting the tax and nic so the end client won't care.

So if you have chain of End Client > Agency > Umbrella > Me, is the Fee Payer the Umbrella Co ?

[rootsnall]

So if you have chain of End Client > Agency > Umbrella > Me, is the Fee Payer the Umbrella Co ?

Reading this the Fee Payer is the End Client.

Fee Payers - what are they in Terms of IR35, HMRC and Contractors / Freelancers

[DolanContractorGroup]

Hi

I think people are confusing the different types of supply, and how IR35 affects them.

If you are working through your limited company, the fee payer is the party that is closest to you, and essentially pays your company. This could be the end client if you're direct, or an agency if one is in the chain.

In an umbrella PAYE arrangement, any IR35 considerations are practically irrelevant as you're an employee. There is no fee payer, as the client/agency will pay the umbrella gross, and you will be paid subject to PAYE.

As for OP's question, that's why end clients will use Preferred Supplier Lists (PSLs) so they know they are working with trusted companies that will pay in accordance with the PAYE rules and not just run away with contractors monies.


Kind regards

Zeeshan