Is it fair for contractors to pay Employer’s NI from his day rate?

[eek]

To HMRC the end client is trying to avoid paying employer NI by pretending that these people are not employees.

that is the reason behind this change and the consequences are going to take a while to complete.

and if you think IT has problems you should see other labour markets (oh boy there is fun there).

[IR35equalshateoflittleguy]

Umbrella companies deduct employer NI and employee NI from a contractor’s day rate agreed with the hiring manager. Is this fair? Is the umbrella companies just a facade for double NI collection from a contractor’s day rate? Most hiring managers are not even aware that employer’s NI is being paid by contractor’s day rate. I thought I’d raise this as a petition for government to consider if this is fair. Please support by signing this petition if you can.
https://petition.parliament.uk/petitions/582935

Fair to who? To HMRC their greedy little fingers it is very very fair. For you it is not fair and it is a big joke for HMRC.

[lucyclarityumbrella]

Something, somewhere is wrong or misrepresented...that’s all the petition is saying. My fight is not against the employer, it is just the way the rates are presented by agencies and the way this ir35 is implemented. But thanks for you time to read and comment.

It all comes back to the regulation in the industry - the government needs to step up and make sure that every umbrella company explains things properly so the contractor can then make the decision as to whether the rate is right for them.

[eek]

Something, somewhere is wrong or misrepresented...that’s all the petition is saying. My fight is not against the employer, it is just the way the rates are presented by agencies and the way this ir35 is implemented. But thanks for you time to read and comment.

But the petition isn't saying that - it is saying

"The Government should change the IR35 rules to ensure that the employer’s National Insurance (NI) is paid by the client/employer and not by the contractor or the umbrella company."

And it shows that whoever wrote the petition (I assume it was you) doesn't understand the finer details. Which is a shame as a more nuanced petition which highlighted the cause of the issue would have been very useful at the moment.

Sadly unless you bin this one, one with better phrasing would be removed as a duplicate.

[ContractorGC]

The hirer has the same budget as he ever did to get in a contractor. What happens to it after he gives it to the next entity in the chain is not his concern, so why would he bother with that petition.

It's the agencies that create the "smurf rate" issue, that and contractors that cba to keep up with reality.

So I'm with the others, that particular petition is wrong.

Something, somewhere is wrong or misrepresented...that’s all the petition is saying. My fight is not against the employer, it is just the way the rates are presented by agencies and the way this ir35 is implemented. But thanks for you time to read and comment.

[NotAllThere]

[QUOTE=malvolio;n4158604]The hirer has the same budget as he ever did to get in a contractor. What happens to it after he gives it to the next entity in the chain is not his concern, so why would he bother with that petition./QUOTE]

Darn. Ninjad.

[malvolio]

My aim is only to create this awareness amongst hiring manager and employer. When going permanent we are never told that employer NI is deducted from your overall pay package, so why do it for a contractor inside IR35? It just gives a impression that your day rate is good on paper but not in reality as 13.8% taken from your day rate to pay employer NI and then you also pay employee NI.

The hirer has the same budget as he ever did to get in a contractor. What happens to it after he gives it to the next entity in the chain is not his concern, so why would he bother with that petition.

It's the agencies that create the "smurf rate" issue, that and contractors that cba to keep up with reality.

So I'm with the others, that particular petition is wrong.

[ContractorGC]

Read this thread: https://forums.contractoruk.com/umbr...loyers-ni.html

Where will the money to pay the employers' NI come from, if not from the amount the agency pays to brolly? Let's say agents were obliged to quote the rate less ernic - all that means is instead of £400 a day, you'd be seeing (say) £350. At the end though, you'd get exactly the same amount of money in your pocket.

You're on a hiding to nothing here. I won't be signing.

My aim is only to create this awareness amongst hiring manager and employer. When going permanent we are never told that employer NI is deducted from your overall pay package, so why do it for a contractor inside IR35? It just gives a impression that your day rate is good on paper but not in reality as 13.8% taken from your day rate to pay employer NI and then you also pay employee NI.

[ladymuck]

It's still not double collection. It's a tax that needs to be paid and someone needs to pay it. As eek says, the issue is that this is not clearly communicated.

[pr1]

It's not double NI collection.

Who else in the chain do you think is collecting ErNIC?

I think OP means "double" as in collecting both Ee NIC and Er NIC "from" the contractor

[eek]

What LM says

and the entire petition is wrong as it’s approaching things the wrong way.

The issue is with the advertising standards agency that are not doing their job to police recruitment adverts and allow “umbrella” rates to be displayed when a PAYE rate should be used.

so nice idea but an unsuitable request - it really should have been checked by someone clueful before being launched

[ladymuck]

It's not double NI collection.

Who else in the chain do you think is collecting ErNIC?

[NotAllThere]

Read this thread: https://forums.contractoruk.com/umbr...loyers-ni.html

Where will the money to pay the employers' NI come from, if not from the amount the agency pays to brolly? Let's say agents were obliged to quote the rate less ernic - all that means is instead of £400 a day, you'd be seeing (say) £350. At the end though, you'd get exactly the same amount of money in your pocket.

You're on a hiding to nothing here. I won't be signing.

[ContractorGC]

Umbrella companies deduct employer NI and employee NI from a contractor’s day rate agreed with the hiring manager. Is this fair? Is the umbrella companies just a facade for double NI collection from a contractor’s day rate? Most hiring managers are not even aware that employer’s NI is being paid by contractor’s day rate. I thought I’d raise this as a petition for government to consider if this is fair. Please support by signing this petition if you can.
https://petition.parliament.uk/petitions/582935