IR35 - Employer NIC

[mudskipper]

See the FaQQer's FAQs here

[washed up contractor]

..

[eek]

For an inside ir35 contract it all boils down to how the agency advertise the contract.

Supply teaching is a prime example where it’s usually £140 a day with the agency paying you and £155 a day via an umbrella. Many people sign up for the latter option not knowing (or asking) what they have signed up to

[malvolio]

Umm, let's say we have a day rate £300 for a contractor who is working through an umbrella; then the PS org would pay the agency £300 + agent fee, the agent would pay the umbrella £300, the umbrella would deduct their fee plus Employer's NIC, then on what's left would deduct employee's NIC and Tax and then pay the contractor ... or am I misunderstanding something?

Yep, that's right. Like I said, simple...

[gables]

Inside IR35 and with a public sector client (which is one caught by the FoI legislation), they are liable for them, but they are actually paid by the intermediary, either your agency or your umbrella, unless you've signed something really silly in your contract (which is always possible).
In any event it has no direct effect on your day rate, although clearly you will need to cover the extra costs somehow, if they apply.

Umm, let's say we have a day rate £300 for a contractor who is working through an umbrella; then the PS org would pay the agency £300 + agent fee, the agent would pay the umbrella £300, the umbrella would deduct their fee plus Employer's NIC, then on what's left would deduct employee's NIC and Tax and then pay the contractor ... or am I misunderstanding something?

[eek]

It's really scary how many contactors cba to find out how their business works, isn't it...

Outside IR35 and through YourCo, you are liable for Employers NICs (ErNICs)
Outside or inside IR35 an through an Umbrella, the umbrella are liable but they will recover if from the client (probably via the agency but let's not confuse things)
Inside IR35 and through YourCo and with a private sector client, you are liable for ErNICs
Inside IR35 and with a public sector client (which is one caught by the FoI legislation), they are liable for them, but they are actually paid by the intermediary, either your agency or your umbrella, unless you've signed something really silly in your contract (which is always possible).
In any event it has no direct effect on your day rate, although clearly you will need to cover the extra costs somehow, if they apply.

Simple , isn't it...

And you wonder why I think a lot of people really aren’t contractors but just people who have either fallen into the market somehow or other for slightly more money

[malvolio]

Okay thats interesting. The rate needs to take into account for NIC?

It's really scary how many contactors cba to find out how their business works, isn't it...

Outside IR35 and through YourCo, you are liable for Employers NICs (ErNICs)
Outside or inside IR35 an through an Umbrella, the umbrella are liable but they will recover if from the client (probably via the agency but let's not confuse things)
Inside IR35 and through YourCo and with a private sector client, you are liable for ErNICs
Inside IR35 and with a public sector client (which is one caught by the FoI legislation), they are liable for them, but they are actually paid by the intermediary, either your agency or your umbrella, unless you've signed something really silly in your contract (which is always possible).
In any event it has no direct effect on your day rate, although clearly you will need to cover the extra costs somehow, if they apply.

Simple , isn't it...

[eek]

If the other contractors are not doing the exact same job as you, their role may have been determined as outside the IR35 regulations. They may also be lieing as well.

Even if you were inside IR35, you shouldnt be paying employer's NIC. You should only be paying tax and employee NIC.

Wrong it depends on what the OP negotiated with his agent and how much of a cowboy his agent is.

It’s common for teachers to be told that they can get £155 rather than £140 if they join agency x only to discover that the £140 was after employer ni deductions and the £155 wasn’t

[confuddled]

If the other contractors are not doing the exact same job as you, their role may have been determined as outside the IR35 regulations. They may also be lieing as well.

Even if you were inside IR35, you shouldnt be paying employer's NIC. You should only be paying tax and employee NIC.

Of course you could tell your agent \ umbrella \ employer to 'do one' if you arent happy but Id make sure you know what you're talking about and your facts first.

Okay thats interesting. The rate needs to take into account for NIC?

[washed up contractor]

Guys,

An interesting one here, where I work some of the contractors have had their rate not affected by Employer NIC being paid by the fee payer.

Myself I was via a different agency, there was no negotiation on my Rate and Employer NIC have been deducted since April.

I should have got rate xxx but have been given rate xxx and the agency still agrees what my that my rate is xxx the original. Where do I stand here do we think?

confuddled x

If the other contractors are not doing the exact same job as you, their role may have been determined as outside the IR35 regulations. They may also be lieing as well.

Even if you were inside IR35, you shouldnt be paying employer's NIC. You should only be paying tax and employee NIC.

Of course you could tell your agent \ umbrella \ employer to 'do one' if you arent happy but Id make sure you know what you're talking about and your facts first.

[cojak]

Guys,

An interesting one here, where I work some of the contractors have had their rate not affected by Employer NIC being paid by the fee payer.

Myself I was via a different agency, there was no negotiation on my Rate and Employer NIC have been deducted since April.

I should have got rate xxx but have been given rate xxx and the agency still agrees what my that my rate is xxx the original. Where do I stand here do we think?

confuddled x

You’re not the only one who’s confuddled.

Too many xxx’s there, my friend. I have no idea what you’re complaining about.

[confuddled]

Guys,

An interesting one here, where I work some of the contractors have had their rate not affected by Employer NIC being paid by the fee payer.

Myself I was via a different agency, there was no negotiation on my Rate and Employer NIC have been deducted since April.

Just wondering where I stand as - There was no change in rate discussions, the Employer NIC has just been deducted.

confuddled x