Ltd. Co. inside IR35 - "Charge Rate" - Who pay's Employer's National Insurance?

[northernladuk]

As a contractor in a similar situation I think your options are go via Umbrella or not.

I went trhough an Umbrella and hating every minute of it, from the questionnaire, qualifications and reference taking like I was a permanent to having to pay the Employer contribution. What pisses me off is that for let's say Mortgage purposes my salary on paper is going to be - the employer contribution, so the rate quoted is bulltulip. Whatever rate you agree bear in mind that the employer contribution is probably another £10k to £20k a year.

I don't believe this is correct. I was going through a mortgage change with Freelancer Financials and we were still progressing in day rate with the lenders that deals with contractors. As it happens I wasn't it the gig long so by the time I got sorted I was back outside and ended up with the Halifax.

Speak to Freelancer and check what they can do for brolly contractors using the day rate.

[GhostofTarbera]

1. If I stayed as a Ltd. Co inside IR35, or asked the Agency to pay me directly through PAYE. If I do not sign a new contract with a change in rate, will it be the expectation that the Agency pays the me/ Ltd the rate minus employee's national insurance and tax.


No you will be terminated beforehand and new contact offered


2. If I stay with the Ltd. Co. or go PAYE to be paid to my personal account, can the Agency only deduct my Tax and my employee National insurance from the rate? Would they need to start a new contract or agree a new rate, if they want to deduct employee's NI too?


No you will be terminated beforehand and new contract offered


3. If also my contract is only 3 months from 6th April, what should deemed payment look like if paying to a Ltd. inside IR35 or directly to my personal account?


They will pay directly into your personal account

About 52% of your gross rate (remember no expenses either)



Has anyone had success getting the feepayers in the chain to pay the relevant employer's NI?


No one


Many Thanks

Answered


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[Drei]

As a contractor in a similar situation I think your options are go via Umbrella or not.

I went trhough an Umbrella and hating every minute of it, from the questionnaire, qualifications and reference taking like I was a permanent to having to pay the Employer contribution. What pisses me off is that for let's say Mortgage purposes my salary on paper is going to be - the employer contribution, so the rate quoted is bulltulip. Whatever rate you agree bear in mind that the employer contribution is probably another £10k to £20k a year.

[imKaz]

I have been stalking the forums for some time, and haven't seen a post that directly answers this question, so please bare with me. If it has been already been answered then apologies for the additional post.


My Current status is; Sole Director Ltd. Co. Contractor. Client is a large business. I deemed role as outside IR35. From 6th April 2020, Client deemed role inside IR35, have received SDS.

Current contract extended by 6 months in January. SDS inside IR35 came in March.

Contract with agency states, "Charge Rate" amount. All evidence indicates this is what the Ltd. Company would be paid.

Agency are pushing me to use an Umbrella, which seems to quote a monthly rate that deducts:
Employer's National Insurance 13.8%
Employee's National Insurance 12%
Personal Tax 20%
Umbrella fee about £20 per week / £1000 a year.
Current cost to run Ltd. Co is around £400 per year.

I'm don't immediately see this as a viable option mainly because of the employer's NI and Umbrella fee deduction.

I understand umbrellas make these deductions because it is assumed the rate quoted covers all deductions. However, with implementation of IR35. My understanding is that because of a role being inside IR35 it is for the Agency/Feepayer to pay Employeer's NI, the Agency/Fee payer and to deduct only Employees NI and Tax from my deemed salary to the my Ltd. Co. or my personal account. Whereas up until 5th April because of being outside IR35 it was my Ltd. Co that pays employees NI and me personally to pay Employer's NI and Tax.

1. If I stayed as a Ltd. Co inside IR35, or asked the Agency to pay me directly through PAYE. If I do not sign a new contract with a change in rate, will it be the expectation that the Agency pays the me/ Ltd the rate minus employee's national insurance and tax.

2. If I stay with the Ltd. Co. or go PAYE to be paid to my personal account, can the Agency only deduct my Tax and my employee National insurance from the rate? Would they need to start a new contract or agree a new rate, if they want to deduct employee's NI too?

3. If also my contract is only 3 months from 6th April, what should deemed payment look like if paying to a Ltd. inside IR35 or directly to my personal account?

Has anyone had success getting the feepayers in the chain to pay the relevant employer's NI?

Many Thanks