Originally posted by eek
View Post
- Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
- Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!
Collapse
You are not logged in or you do not have permission to access this page. This could be due to one of several reasons:
- You are not logged in. If you are already registered, fill in the form below to log in, or follow the "Sign Up" link to register a new account.
- You may not have sufficient privileges to access this page. Are you trying to edit someone else's post, access administrative features or some other privileged system?
- If you are trying to post, the administrator may have disabled your account, or it may be awaiting activation.
Logging in...
Previously on "Letter from HMRC about umbrella company used in the past"
Collapse
-
-
While the high earners - well yes, it's crap. But the low earners getting shafted by these total tossers. I have to say I get very ticked off about that.
So I propose the following tax law. Bring back the death penalty for people who promote schemes that exploit tax loopholes. Even amnesty would agree with that.
Leave a comment:
-
Originally posted by eek View PostAssuming weekly based on the hourly earnings (minimum wage is £8.70 so it can't be for longer than a week).
That doesn't look right to me. - NIC is right but the PAYE Tax doesn't - it's about £100 too low but that depends on tax code.
Leave a comment:
-
I've previously written here about some of the bigger umbrellas to whom we sent the same data and received different "net" answers.
The creative use of expenses and application of "emergency" codes was prevalent.
Not a mention that a tax return submission would see more tax due.
Perhaps the most worrying was the NIC treatment.
There are some difficulties in working out the correct amount of employee and employer NIC where a job does not last a whole tax year. In particular giving effect to what is essentially the "nil NIC" value can be tricky.
At least three of the umbrellas we tested solved that problem by ignoring the NIC free part and applying the rates the everything.
I don't know if their subsequent returns to HMRC included the NIC free allowance (allowing them to pocket some of the NIC) or whether all the NIC was paid over.
I do know that individuals were not advised that they should check their NIC position post year end and make a claim for a refund.
Leave a comment:
-
Originally posted by webberg View PostYep - agreed.
So the tax deduction is between £60 and £100 a week less than it might be.
That might be accounted for by expenses - but very doubtful.
There is no tax code via PAYE that gives a personal allowance and then taxes everything else at basic rate.
Something quite odd here.
Leave a comment:
-
Originally posted by eek View Post£1506 per week gives me a annual gross wage of £69,000 or so (as holiday pay is included so I will assume 4 weeks holiday and 8 bank holidays) - which is well over the basic rate - we are looking at £19,000 which should be being taxed at 40% not 20%.
Now we have seen umbrellas in the past using emergency tax at 20% for a long period of time to pay an employee which may well be the case here and that didn't end up well (the person was presented with a £20k bill to pay) which is why I said the tax really should be £300 or so (yes my £360 was high I forgot about the holiday bit but it's still quite enough).
So the tax deduction is between £60 and £100 a week less than it might be.
That might be accounted for by expenses - but very doubtful.
There is no tax code via PAYE that gives a personal allowance and then taxes everything else at basic rate.
Something quite odd here.
Leave a comment:
-
Originally posted by webberg View PostGross pay is £1,506.
PA - assuming not used elsewhere - is £12,500 a year or around £240 a week.
Taxable pay therefore £1,266.
Basic Rate Tax is £253.60.
Not a million miles away?
Now we have seen umbrellas in the past using emergency tax at 20% for a long period of time to pay an employee which may well be the case here and that didn't end up well (the person was presented with a £20k bill to pay) which is why I said the tax doesn't seem right - on my redone calculation it's £50 out rather than £100 though.Last edited by eek; 18 November 2020, 17:47. Reason: screwed up how holidays were being done - it's better but I'm still not sure the tax being paid is correct
Leave a comment:
-
Originally posted by eek View PostAssuming weekly based on the hourly earnings (minimum wage is £8.70 so it can't be for longer than a week).
That doesn't look right to me. - NIC is right but the PAYE Tax doesn't - it's about £100 too low but that depends on tax code.
PA - assuming not used elsewhere - is £12,500 a year or around £240 a week.
Taxable pay therefore £1,266.
Basic Rate Tax is £253.60.
Not a million miles away?
Leave a comment:
-
Originally posted by eek View PostEven if they do have a PSL - given the agencies she's currently using a don't think the rest of the list is going to be much better.
If you have a choice Orca are also very good, Adam Holby of Fair pay services is also very careful doing things correctly.
Leave a comment:
-
Originally posted by Taxissues View PostPayslip summary for current umbrella
Earnings(hourly) 501.40
Holiday pay: 162.27
Bonus(Dpsg): 843.09
Total earnings: 1506.76
Deductions
Employees NIC: 104.37
Paye: 252.60
Total deductions: 356.97
Net pay 1149.79
That doesn't look right to me. - NIC is right but the PAYE Tax doesn't - it's about £100 too low but that depends on tax code.Last edited by eek; 18 November 2020, 17:14.
Leave a comment:
-
Originally posted by webberg View PostWe offer a free 30 minute initial call.
Contact our main number and one of my colleagues will arrange a conversation.
Ask for a date/time with Graham
Leave a comment:
-
Originally posted by Taxissues View PostPayslip summary for current umbrella
Earnings(hourly) 501.40
Holiday pay: 162.27
Bonus(Dpsg): 843.09
Total earnings: 1506.76
Deductions
Employees NIC: 104.37
Paye: 252.60
Total deductions: 356.97
Net pay 1149.79
Weekly, fortnightly, monthly?
Leave a comment:
- Home
- News & Features
- First Timers
- IR35 / S660 / BN66
- Employee Benefit Trusts
- Agency Workers Regulations
- MSC Legislation
- Limited Companies
- Dividends
- Umbrella Company
- VAT / Flat Rate VAT
- Job News & Guides
- Money News & Guides
- Guide to Contracts
- Successful Contracting
- Contracting Overseas
- Contractor Calculators
- MVL
- Contractor Expenses
Advertisers
Contractor Services
CUK News
- Streamline Your Retirement with iSIPP: A Solution for Contractor Pensions Sep 1 09:13
- Making the most of pension lump sums: overview for contractors Sep 1 08:36
- Umbrella company tribunal cases are opening up; are your wages subject to unlawful deductions, too? Aug 31 08:38
- Contractors, relabelling 'labour' as 'services' to appear 'fully contracted out' won't dupe IR35 inspectors Aug 31 08:30
- How often does HMRC check tax returns? Aug 30 08:27
- Work-life balance as an IT contractor: 5 top tips from a tech recruiter Aug 30 08:20
- Autumn Statement 2023 tipped to prioritise mental health, in a boost for UK workplaces Aug 29 08:33
- Final reminder for contractors to respond to the umbrella consultation (closing today) Aug 29 08:09
- Top 5 most in demand cyber security contract roles Aug 25 08:38
- Changes to the right to request flexible working are incoming, but how will contractors be affected? Aug 24 08:25
Leave a comment: