Originally posted by Hallowitch
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!
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 "Help to understand just about everything wages /tax/expenses /NI umberela company"
Collapse
-
Originally posted by LisaContractorUmbrella View PostIn all seriousness - if your umbrella company can't give you an explanation of your payslip that you can fully understand, you need a new umbrella company.
ive got a better understanding of it now thanks to this site thank you both for replying
Leave a comment:
-
Originally posted by Hallowitch View Postthis is where my confusion may come in I think I assumed that the main contractor would be claiming for this through his tax allowance
Leave a comment:
-
Originally posted by Hallowitch View Postwe have only been with this umbrella company 2 weeks and to be honest I couldn't understand his wage slip (didn't understand the last one properly but thought I could see what was what now I know I didn't )
With the last umbrella I only claimed for evening meals and Mileage and provided receipts I didn't claim the £10 a day substance because their is no canteen on site that you cant buy meals from but their is cooking facility's for the men to use so he buys bread milk tea bags pies ect for day time from the supermarket
I didn't claim lodge because I thought you couldn't claim tax back from an allowance that was not subject to tax and no one told me different or ask for receipts for lodge
Many thanks for your help
Leave a comment:
-
Originally posted by LisaContractorUmbrella View PostAs TheFaqqer says - the employer probably had an HMRC dispensation to allow for this in which case the amount would have been non-taxable; if the umbrella company does not have a corresponding dispensation or the amount being paid by the agency is not to cover actual incurred costs then it will be taxable
this is where my confusion may come in I think I assumed that the main contractor would be claiming for this through his tax allowance
Leave a comment:
-
Originally posted by TheFaQQer View PostAs a guess...
The previous employer had a scale rate agreement which meant that rather than paying the exact money to cover the accommodation expense, they can pay a lump sum for each day. When I was a permie, we could claim £40 for accommodation and £25 for food as a per diem and pay no tax on it - great when working on a project where I could live in a shoebox in't middle o' road.
spot on with your Guess work and I believe he has lived in few dumps over the years
However, the umbrella doesn't have such an arrangement with HMRC, so they either need to pay that money out as salary or pay out the exact expense incurred.
Is your husband putting his expenses through for the amount that he is actually spending? If so, then the only additional tax / NI that will be due would be based on the difference between the lump sum being paid by the client and the amount actually incurred by the contractor. If it's the same, then there is nothing extra; if there is a difference then either the umbrella pockets the difference (not what you want!) or pays it out as salary (and you pay the extra tax).
With the last umbrella I only claimed for evening meals and Mileage and provided receipts I didn't claim the £10 a day substance because their is no canteen on site that you cant buy meals from but their is cooking facility's for the men to use so he buys bread milk tea bags pies ect for day time from the supermarket
I didn't claim lodge because I thought you couldn't claim tax back from an allowance that was not subject to tax and no one told me different or ask for receipts for lodge
Many thanks for your helpLast edited by Hallowitch; 30 January 2015, 15:19.
Leave a comment:
-
Originally posted by Hallowitch View Posthe was employed direct by the construction company
this is the first time he has worked away and been paid by umbrella company
when the agency asked him to (first time he has worked for this agency ) work away there was no lodge included the agency went back to the client and they agreed to give him £x per night to cover accommodation this is paid as a non taxable expense by the client to the agency then passed to the umbrella company
Thank you for time and help
Leave a comment:
-
As a guess...
The previous employer had a scale rate agreement which meant that rather than paying the exact money to cover the accommodation expense, they can pay a lump sum for each day. When I was a permie, we could claim £40 for accommodation and £25 for food as a per diem and pay no tax on it - great when working on a project where I could live in a shoebox in't middle o' road.
However, the umbrella doesn't have such an arrangement with HMRC, so they either need to pay that money out as salary or pay out the exact expense incurred.
Is your husband putting his expenses through for the amount that he is actually spending? If so, then the only additional tax / NI that will be due would be based on the difference between the lump sum being paid by the client and the amount actually incurred by the contractor. If it's the same, then there is nothing extra; if there is a difference then either the umbrella pockets the difference (not what you want!) or pays it out as salary (and you pay the extra tax).
Leave a comment:
-
Originally posted by LisaContractorUmbrella View PostWas your husband employed by the construction company or was he working through the CIS scheme and registered as a sole trader? To answer your question - the tax treatment of the £200 will depend on the dispensation granted to the umbrella company by HMRC.
this is the first time he has worked away and been paid by umbrella company
when the agency asked him to (first time he has worked for this agency ) work away there was no lodge included the agency went back to the client and they agreed to give him £x per night to cover accommodation this is paid as a non taxable expense by the client to the agency then passed to the umbrella company
Thank you for time and help
Leave a comment:
-
Originally posted by Hallowitch View Postthanks Lisa I will at some point be speaking the umbrella company but I just wanted to get my head round how it all works first
I simply don't understand how when he was employed by ABC construction if a job was away from home the lodge money paid to him was (on his wage slip) lodge non taxable £xxx and no tax and NI was paid on this lodge money (because it wasn't wages ) but with the umbrella company it is charged on their NI his NI and Tax
Thanks
Leave a comment:
-
Originally posted by LisaContractorUmbrella View PostYou're welcome Although I should say that your husband's umbrella company should really be able to answer your questions
If an amount is added to the invoice each week regardless of any costs incurred then it should be considered taxable pay; only actual costs which have been incurred wholly and exclusively as a result of the contract can be claimed for tax relief as expenses.
I simply don't understand how when he was employed by ABC construction if a job was away from home the lodge money paid to him was (on his wage slip) lodge non taxable £xxx and no tax and NI was paid on this lodge money (because it wasn't wages ) but with the umbrella company it is charged on their NI his NI and Tax
Thanks
Leave a comment:
-
You're welcome Although I should say that your husband's umbrella company should really be able to answer your questions
If an amount is added to the invoice each week regardless of any costs incurred then it should be considered taxable pay; only actual costs which have been incurred wholly and exclusively as a result of the contract can be claimed for tax relief as expenses.
Leave a comment:
-
Lisa thanks for the reply very much appreciated
when my hubby works away from home he receives a non taxable amount of lodge money per night to pay for his accommodation example
wages for hours worked £1,300 lodge non-taxable £200 total invoiced to the umbrella company £1,500
should they deduct their NI from the full amount paid or should the lodge money (£200) be deducted first before their NI contribution is calculated
I also don't understand why if his wages are less this week than last week the NI paid to the umbrella company is more
Thanks
Leave a comment:
-
An umbrella company employs you under a Contract of Employment; in turn it has a business to business contract with the agency/client. They will raise an invoice at the contract rate multiplied by the number of hours/days you have worked and this invoice is then payable by the agency/client to the umbrella company. An umbrella company has, as with any other employer, a legal obligation to pay Employer's National Insurance Contributions and you, as their employee, are subject to Income Tax and Employee's National Insurance Contributions. So, when the umbrella company receives payment of its invoice from the agency/client, they will retain their margin (usually £25-£30 per week), they will put aside the ERr's NIC's contribution (which is payable to HMRC once a month on 19th) and they will then pay your salary. Again the Income Tax and EE's NIC's will be put aside to be paid to HMRC on the 19th.
Can you explain what you mean by 'lodge money'?
Leave a comment:
-
Help to understand just about everything wages /tax/expenses /NI umberela company
Hello Everyone
I hope this post makes sense so please bear with me
when using an umbrella company I understand you pay them NI and a Margin from your wages
is this is taken first from your top line before your own tax and NI is deducted ? (its my understanding that it is )
If an amount is sent to the umbrella company as non taxable (Lodge money) should the umbrella include this amount in their NI calculations ?Tags: None
- 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: