Reply to: Danbro Umbrella including Employers NI in Gross taxable?? How???

[LisaContractorUmbrella]

Hi Guys

It's not that brollies believe their fees to be tax deductible, the fees are essentially the profit on the transaction for the umbrella, so in the same way Accenture will bill out an employee for say £1000 a day and pay the employee say £500 a day, the brolly will invoice £1000 a day and pay the employee say £900 a day - leaving the balance for profit and of course employers NI

HTH

[Bluebird]

I must admit to being surprised that a brolly believes it's fees to be tax deductible. Any idea on what basis they (in general) believe they are ?

I don't see it happens to pass wholly, necessarily and exclusively. I doubt they are on the prescribed list of "professional organizations" either.

yes, I see your point.

I was thinking from a Ltd Co point of view that the accountancy fees are tax deductable, however with a brolly it shoulsn't work that way should it ?

It could be that "Danbro" the accountants are a seperate entity from "Danbro" the employer...

[sidknows]

Income
Expenses



Employers NI 94.18
Employees NI 62.06
Employee Tax 170.37
Total All Tax 326.62
Fees 19.95
Total Net Income 590.93

here's the calc from contractor umbrella with the same criteria -- no expenses
Small difference in fee of 1.95 and a lower take home pay by 14.63

Danbros' is higher i guess because of the double calc of the fees
Perhaphs lisa can clarify this fo us as to which is correct way as this was my query as to whether they can do it --

if it is correct why are contractor umbrella not doing as well as their contractors will take home more ?

[ASB]

all it means is that their fees are a tax-deductable expense - which is what any business woud do.

I must admit to being surprised that a brolly believes it's fees to be tax deductible. Any idea on what basis they (in general) believe they are ?

I don't see it happens to pass wholly, necessarily and exclusively. I doubt they are on the prescribed list of "professional organizations" either.

[Bluebird]

all it means is that their fees are a tax-deductable expense - which is what any business woud do.

[NotAllThere]

i'm not really familiar with the umbrella company calculations ,so I just had a quick look at the danbro calculator out of curiousity


According to them the fees for their services are reimbursed to the contractor in full ie 18 a week charge is added back to the net pay

Am I missing something here ?

The reimbursement isn't coming out of their funds, it's coming out of yours.

[sidknows]

can they do this and do all umbrellas do this as it seems a bit weird?

is this allowed ?

[LisaContractorUmbrella]

thanks for that and I guess thats your way off saying I have'nt got a clue

Perhaps you can offer an explanation of the calculator



Danbro PAYE Umbrella illustration

Gross Weekly Income £937.5
Weekly Expenses £18 ____________
Gross Taxable Pay £919.5


Deductions
Income Tax £153.01
Employers NI £91.99
Employee's NI £68.94
Danbro Fee £18
Total deductions £331.94
____________
Net Pay £587.56
Expenses Reimbursed £18 ___________
Weekly Take home £605.56
Percentage Take Home 65

It looks as though their fees are deducted from the gross - the balance being subject to tax and then also adding the fee to the PAYE deductions which effectively means that their fee is deducted from your gross pay twice. The figure is then added at the end to correct.

HTH

[sidknows]

i deliberately did not input any expenses at all and this is the calculation that came out and the £18 is their weekly fee

[ASB]

thanks for that and I guess thats your way off saying I have'nt got a clue

Perhaps you can offer an explanation of the calculator



Danbro PAYE Umbrella illustration

Gross Weekly Income £937.5
Weekly Expenses £18 ____________
Gross Taxable Pay £919.5


Deductions
Income Tax £153.01
Employers NI £91.99
Employee's NI £68.94
Danbro Fee £18
Total deductions £331.94
____________
Net Pay £587.56
Expenses Reimbursed £18 ___________
Weekly Take home £605.56
Percentage Take Home 65

At a rough guess somebodys other expenses happen to be equal to the s fees.

[sidknows]

thanks for that and I guess thats your way off saying I have'nt got a clue

Perhaps you can offer an explanation of the calculator



Danbro PAYE Umbrella illustration

Gross Weekly Income £937.5
Weekly Expenses £18 ____________
Gross Taxable Pay £919.5


Deductions
Income Tax £153.01
Employers NI £91.99
Employee's NI £68.94
Danbro Fee £18
Total deductions £331.94
____________
Net Pay £587.56
Expenses Reimbursed £18 ___________
Weekly Take home £605.56
Percentage Take Home 65

[oracleslave]

Am I missing something here ?

Yes, a few marbles.

[sidknows]

i'm not really familiar with the umbrella company calculations ,so I just had a quick look at the danbro calculator out of curiousity


According to them the fees for their services are reimbursed to the contractor in full ie 18 a week charge is added back to the net pay

Am I missing something here ?

[NotAllThere]

Usually pre-tax turnover refers to company tax not "Salary and Dividends". I.e. company income.

As the VAT money is never yours to decide what to do with, you are merely the collector of the tax, it seems odd to include it in your turnover calculation. But then, if you're wanting to deceive a bank into lending you more money, that wouldn't bother you.

[Bluebird]

turnover including vat ... am i missing something here ?

If you are looking to "maximise" the £££ that you quote for say a mortgage, then if you inoive 100,000 + VAT your Turnover = £117,000.

If you just use your "income" as in salary & dividends, then the amount quoted is much less.

The OP needs the information for immigration purposes, and I guess the higher figure he can achieve the better, whether the people who he gives thefigures to will know how Turnover differs from "pre tax income" I don't know - but my guess is they won't.