Reply to: CXC Global Umbrella + Tax Back?

[ronanm]

Wonder if Lisa will thank you for that gem in a few months time

If u can grasp it, how hard can it be??

[northernladuk]

Now time to try and change umbrella companies. May be the one who bothered to explain it on here is the way to go.

Wonder if Lisa will thank you for that gem in a few months time

[ronanm]

Now time to try and change umbrella companies. May be the one who bothered to explain it on here is the way to go.

Oh I noticed that alright !!

[SueEllen]

Now time to try and change umbrella companies. May be the one who bothered to explain it on here is the way to go.

[ronanm]

It seems to me that you're still not quite getting it. In effect your umbrella is not paying for the accomodation at all. If you were staying with a friend for free then all of your money would be used towards salary and you would get a larger amount as salary (although less overall as you would pay more tax). The less you pay for rent the more income you will have. The rent money comes out of the money which you bring in.

If they forgot to apply the £700 one week and then applied £1400 the next week then you are no worse off overall than if they'd applied the £700 to both weeks.

Not sure I can explain this to you without sitting next to you with a pen and paper and drawing diagrams!

Thanks - I do get it. What I didn't say was that the rental company charged me the £1400 not the umbrella. Lisa kindly enlightened me about the intracacies of offseting rent. Get it?!

[lje]

It seems to me that you're still not quite getting it. In effect your umbrella is not paying for the accomodation at all. If you were staying with a friend for free then all of your money would be used towards salary and you would get a larger amount as salary (although less overall as you would pay more tax). The less you pay for rent the more income you will have. The rent money comes out of the money which you bring in.

If they forgot to apply the £700 one week and then applied £1400 the next week then you are no worse off overall than if they'd applied the £700 to both weeks.

Not sure I can explain this to you without sitting next to you with a pen and paper and drawing diagrams!

[LisaContractorUmbrella]

Brilliantly descibed - thanks a lot

You're welcome ronanm

[ronanm]

Your actual income is £1750.00 per week. You pay £320 each week to your landlord for rent and, assuming you are continuing to pay for your permanent residence, this amount is allowable as an expense. This means that your umbrella company will process your expense claim for week 1 with your earnings for week1 - therefore your taxable pay for the week will be £1430.00. Once deductions have been made for tax and NI and your umbrella company's (high!) fees you will be left with £1222.69 in your pocket. From this £1222.69 you will pay your rent for week 2 but this will, in turn, be processed as an expense against your week 2 earnings.

Brilliantly descibed - thanks a lot

[ronanm]

Taking your £700 a week pad out of that would have left a pretty sick looking number

Tell me about it!!! They were taking out £700 a week and then they forgot to one of the weeks - imagine my delight when I got an e-mail to say they would be charging me £1400 for the week as they'd forgot to invoice me a couple of weeks previously - I can laugh about it now mad

[northernladuk]

I didn't know any contractors when I moved to the UK so just wanted something sorted asap - needless to say, I have not bothered my arse to find out much more since

You dont say lol....

[LisaContractorUmbrella]

So Net is £1222.69. I physically pay £320 each week to my landlord and they set aside £320 for next week's rent - it that right?

Your actual income is £1750.00 per week. You pay £320 each week to your landlord for rent and, assuming you are continuing to pay for your permanent residence, this amount is allowable as an expense. This means that your umbrella company will process your expense claim for week 1 with your earnings for week1 - therefore your taxable pay for the week will be £1430.00. Once deductions have been made for tax and NI and your umbrella company's (high!) fees you will be left with £1222.69 in your pocket. From this £1222.69 you will pay your rent for week 2 but this will, in turn, be processed as an expense against your week 2 earnings.

[northernladuk]

Your net is £1222.69 but from that you would have to pay your rent of £320 for the following week

Taking your £700 a week pad out of that would have left a pretty sick looking number

[ronanm]

also £87.50 for a weekly fee seems ridiculous, my umbrella company i use is a lot cheaper and i imagine Lisa above is a lot cheaper also

I didn't know any contractors when I moved to the UK so just wanted something sorted asap - needless to say, I have not bothered my arse to find out much more since

[MarkOD]

also £87.50 for a weekly fee seems ridiculous, my umbrella company i use is a lot cheaper and i imagine Lisa above is a lot cheaper also

[ronanm]

Your net is £1222.69 but from that you would have to pay your rent of £320 for the following week

So Net is £1222.69. I physically pay £320 each week to my landlord and they set aside £320 for next week's rent - it that right?