Originally posted by Old Greg
View Post
- Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
- Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!
Reply to: I am paying employers NI contributions
Collapse
You are not logged in or you do not have permission to access this page. This could be due to one of several reasons:
- You are not logged in. If you are already registered, fill in the form below to log in, or follow the "Sign Up" link to register a new account.
- You may not have sufficient privileges to access this page. Are you trying to edit someone else's post, access administrative features or some other privileged system?
- If you are trying to post, the administrator may have disabled your account, or it may be awaiting activation.
Logging in...
Previously on "I am paying employers NI contributions"
Collapse
-
-
Originally posted by dx4100 View PostYou can always trust northernladuk not be far away to throw his balls in your face
Leave a comment:
-
Originally posted by Old Greg View PostI think it's a helpful reinforcement of the sound and courteous advice we have shared with a new contractor.
Its also a matter of replying without checking whats already been said...
You can always trust northernladuk not be far away to throw his balls in your face
Leave a comment:
-
Originally posted by dx4100 View PostMake sure you read up on IR35 first and everything that goes with it...
Leave a comment:
-
Originally posted by HarryCodLife View PostThanks for your help, I understand the process better now thanks. At least I can see that it is normal practice and that I am not being ripped off. Next time I will go Ltd, and pay for an accountant . . . - Cheers.
Leave a comment:
-
Originally posted by HarryCodLife View PostThanks for your help, I understand the process better now thanks. At least I can see that it is normal practice and that I am not being ripped off. Next time I will go Ltd, and pay for an accountant . . . - Cheers.
Read up on IR35, as the main tax advantage to Ltd over brolly stems from being outside IR35.
Leave a comment:
-
Originally posted by HarryCodLife View PostThanks for your help, I understand the process better now thanks. At least I can see that it is normal practice and that I am not being ripped off. Next time I will go Ltd, and pay for an accountant . . . - Cheers.
Leave a comment:
-
Thanks for your help, I understand the process better now thanks. At least I can see that it is normal practice and that I am not being ripped off. Next time I will go Ltd, and pay for an accountant . . . - Cheers.
Leave a comment:
-
Let's say you have agreed a rate of £300 pd from your client. This is the total sm the client will pay for your work. They are not your employer so they do not pay Employers' NIC. As Employer's NIC must be paid, it must come out of that £300 pd. So your daily rate must cover Employer's NIC and the Umbrella fee, and after that Employee's NIC and Income tax will be deducted in the normal way. And remember that you don't get paid when you don't work, so holidays and sickness need to be covered as well.
If you've come from direct employment, it takes a little getting used to - Read up as much as you can. Start with the CUK Guides, e.g. Umbrella Company - Guides and Tips : Contractor UK
Leave a comment:
-
Originally posted by HarryCodLife View PostCan anyone shed any light on this for me or clarify exactly what is going on here - Cheers.
Your employer needs to make enough money to pay the employers national insurance.
Therefore, your employer takes that money from the amount you invoice the client, and pays it to HMRC.
The alternative model (and no-one ever does this) would be for the umbrella to have a huge charge to you and pay it out of that instead. The effect is the same (ie you are paying for it), the amount you take home is the same (because the sums are the same) but no-one does this because they you'd moan about how high the margin is without realising that the vast majority of this is national insurance.
What you are experiencing is how the business works - someone has to pay the NI.
Leave a comment:
-
You are employed by your umbrella. They have to pay employers NIC. Where did you expect this to come from?
Leave a comment:
-
Yeah. Am sure Lucy who is the MD at CU can. Give them a bell and ask for her and I am sure they will go through it with you.
Leave a comment:
-
Originally posted by HarryCodLife View PostHi there - My Umbrella Co is ContractorUmbrella and it would appear that I am paying Employers NI contributions as well as Employees NI Contributions. On my weekly payslip under deductions is listed 'Employers NIContributions'. When I queried this with them I got the following reply: 'We have a contract in place between your Agency and Contractor Umbrella Ltd and when the funds arrive we are legally obliged to make a payment to HMRC from those money toward ERS National Insurance. As you can imagine we deduct just a small margin at the end of each week/month and if we would have to pay every contractors ERS NI we would be out of business. Once we receive the funds from the Agency the following are deducted from your Contract Value in order to lower your Tax and NI liability:
Contract Value
- Holiday
- (Expenses)
- CU Margin
- Ers (Employer National Insurance)
= Gross For Tax
I hope this makes sense however if you have any further queries please me know,
Etc, etc
Can anyone shed any light on this for me or clarify exactly what is going on here - Cheers.
Leave a comment:
-
I am paying employers NI contributions
Hi there - My Umbrella Co is ContractorUmbrella and it would appear that I am paying Employers NI contributions as well as Employees NI Contributions. On my weekly payslip under deductions is listed 'Employers NIContributions'. When I queried this with them I got the following reply: 'We have a contract in place between your Agency and Contractor Umbrella Ltd and when the funds arrive we are legally obliged to make a payment to HMRC from those money toward ERS National Insurance. As you can imagine we deduct just a small margin at the end of each week/month and if we would have to pay every contractors ERS NI we would be out of business. Once we receive the funds from the Agency the following are deducted from your Contract Value in order to lower your Tax and NI liability:
Contract Value
- Holiday
- (Expenses)
- CU Margin
- Ers (Employer National Insurance)
= Gross For Tax
I hope this makes sense however if you have any further queries please me know,
Etc, etc
Can anyone shed any light on this for me or clarify exactly what is going on here - Cheers.Tags: None
- Home
- News & Features
- First Timers
- IR35 / S660 / BN66
- Employee Benefit Trusts
- Agency Workers Regulations
- MSC Legislation
- Limited Companies
- Dividends
- Umbrella Company
- VAT / Flat Rate VAT
- Job News & Guides
- Money News & Guides
- Guide to Contracts
- Successful Contracting
- Contracting Overseas
- Contractor Calculators
- MVL
- Contractor Expenses
Advertisers
Contractor Services
CUK News
- Streamline Your Retirement with iSIPP: A Solution for Contractor Pensions Sep 1 09:13
- Making the most of pension lump sums: overview for contractors Sep 1 08:36
- Umbrella company tribunal cases are opening up; are your wages subject to unlawful deductions, too? Aug 31 08:38
- Contractors, relabelling 'labour' as 'services' to appear 'fully contracted out' won't dupe IR35 inspectors Aug 31 08:30
- How often does HMRC check tax returns? Aug 30 08:27
- Work-life balance as an IT contractor: 5 top tips from a tech recruiter Aug 30 08:20
- Autumn Statement 2023 tipped to prioritise mental health, in a boost for UK workplaces Aug 29 08:33
- Final reminder for contractors to respond to the umbrella consultation (closing today) Aug 29 08:09
- Top 5 most in demand cyber security contract roles Aug 25 08:38
- Changes to the right to request flexible working are incoming, but how will contractors be affected? Aug 24 08:25
Leave a comment: