Originally posted by IR35 Avoider
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Reply to: Changing from company to Parasol
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Previously on "Changing from company to Parasol"
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Originally posted by IR35 Avoider View PostThe login was appropriate in 2000 - 2002.
Having said that, I've actually paid virtually nothing in tax on all my earnings since A-day in 2006, bunged huge amounts into a pension, hence semi-retiring now.
It's going to come as a shock to pay as much as 20%. The fact that it only amounts to the odd fiver is neither here nor there, it's the principle.
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I may be doing them a disservice - the email I got from their payroll people was fairly incomprehensible. Given that the agency pay them monthly, and therefore they pay me monthly, it's possible I will be treated as monthly paid for NI purposes. It doesn't really make sense that my NI earnings period would be determined by the idiosyncracies of their timesheet system.
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Well, having explored the Parasol timesheet system now, it appears that I can choose how much I want to pay in fees, i.e. it's not preset to monthly or weekly, it's simply the number of weeks you select for your timesheet multiplied by £27.50. So if I work one day and chose a one week range, they'll charge me for one week, if I choose a two week range, including a week I didn't actually work, they'll charge me £55. I'm guessing that I'll get an extra £110 NI allowance if I include the extra week, which will save me approximately as much as I paid extra in charges. i.e their charges are designed so it makes bugger all difference what you do; you just get to choose whether you want your money to go to them or the tax man.Last edited by IR35 Avoider; 28 January 2010, 18:33.
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Originally posted by cojak View PostPlan on dumping your login too?
How about Bendmeover?
Having said that, I've actually paid virtually nothing in tax on all my earnings since A-day in 2006, bunged huge amounts into a pension, hence semi-retiring now.
It's going to come as a shock to pay as much as 20%. The fact that it only amounts to the odd fiver is neither here nor there, it's the principle.Last edited by IR35 Avoider; 28 January 2010, 18:34.
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Changing from company to Parasol
Since I only expect to be working an average of one or two days a month, I've decided to wind up my company and use an umbrella.
Parasol's monthly charge is not very different to what my accountant charges to run the company, but the advantage is that I don't have to pay for months I don't work. Also, with the company, the "5%" allowed under IR35 is not enough to pay the accountant. Further, after interrogating their customer service, I possibly wrongly concluded that I would only be paying their weekly charge of £27.50 for weeks I worked, which would quarter my accountancy overheads.
However I overlooked that as an umbrella employee, I will no longer have an annual earnings period for NI purposes. As a company director I paid no NI until I've earned well over £5000 in a year. As a weekly paid employee I would pay aprox. 24% NI on anything over £110 earned in any given week. Alternatively, as a monthly paid employee I would pay the same rate on anything over £467 earned in any given month. Essentially, the NI system is designed on the premise that your earn more or less the same each week/month, so people like me who don't, who have an irregular pattern of work, pay much more NI for a given amount of annual earnings.
Let's assume that for both NI and Parasol charging purposes, I'm treated as either weekly or monthly paid. Then, if I work more than 1 day in the month, my take-home is actually always higher if I'm treated as monthly paid. The extra NI from being treated as weekly paid always more than offsets the lower Parasol fee from only paying for weeks in which I actually worked.
Parasol originally implied I would only pay £27.50 for each week containing days I actually worked, or the monthly fee if I worked in all weeks. I'm doubtful that this will turn out to be true, if I'm monthly-paid for NI purposes.Tags: None
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