Reply to: Umbrella Co -Self-employed ?

[lucyclarityumbrella]

Best estimate - if you hit the 40% tax bracket you can expect to take home around 52-56% of your contract day rate - assuming a standard tax code and as said previously assuming no other PAYE earnings etc

[LoughriggFell]

Band 6 capped rates, 37.5 hours - gross £862 net £521.01 through a well respected umbrella company.

When you take into account sick pay/ holiday/pension not to mention time without work you are worse off than a permanent member of staff.

[ss002d6252]

It should be the same wage wherever you ask with just the margin being the difference. If people are offering higher take home pays it's because a) Dodgy schemes c) Dodgy assumptions in their calculator

If you need a realistic stab at take home pay then I suggest you use the one on the contractorumbrella website - bear in mind though these are only ever illustrations and your own circumstances will affect it depending on previous earnings, tax code, student loan repayments etc.

https://www.contractorumbrella.com/calculator.html

Thanks - a rough estimate will do as I just get some bad vibes about the current setup.

[VelcroPower]

... does anyone know any who are good for nursing and good give a prediction of what the net wages would be for a certain gross rate ?.

It should be the same wage wherever you ask with just the margin being the difference. If people are offering higher take home pays it's because a) Dodgy schemes c) Dodgy assumptions in their calculator

If you need a realistic stab at take home pay then I suggest you use the one on the contractorumbrella website - bear in mind though these are only ever illustrations and your own circumstances will affect it depending on previous earnings, tax code, student loan repayments etc.

https://www.contractorumbrella.com/calculator.html

[ss002d6252]

NOT an umbrella company then, a true umbrella company will have a contract of employment with you - End of.

Thanks.

Starting to wonder if a change to another umbrella company would be worth it to make sure everything runs OK long term, perhaps the current deal is 'too cozy' for the agency. If another umbrella company is used then does anyone know any who are good for nursing and good give a prediction of what the net wages would be for a certain gross rate ?

This agency already haven't responded to a query that was sent to them nearly a week ago, which doesn't bode well.

[lucyclarityumbrella]

Might be worth a quick glance of this previous thread:
"I have been with Maxipay in Tunbridge Wells and they were awful - I now have a tax bill to pay and can't get any answers from them why I have got it" quoted from https://forums.contractoruk.com/acco...-plague-5.html

[lucyclarityumbrella]

The contract with the umbrella company states that there is no employment contract with them, they are deemed as an employer only for the purposes of tax and NI collection by HMRC.

NOT an umbrella company then, a true umbrella company will have a contract of employment with you - End of.

[cojak]

If they aren’t then they are NOT an umbrella company.

Their contracts are weaselly. For mortgage purposes employment is employment.

Umbrella companies employ contractors. It’s as simple as that.

https://www.contractoruk.com/umbrell...companies.html

https://www.contractorumbrella.com/q...a_company.html

[ss002d6252]

Hmmm..

These are some of key sections of the umbrella contract

OUR RELATIONSHIP
Despite paying you on a PAYE basis you are not an employee or a worker of us and do not qualify for things like holiday pay. As stated earlier in this leaflet you are paid PAYE because of the circumstances of the contract, you are not paid PAYE because you are our employee.

Status of this engagement
36. Under this contract you will not be an employee or a worker of PAYMAX for general statutory employment rights purposes.
37. The tax and National Insurance rules applied by HM Revenue & Customs are not the same as for general statutory employment rights purposes. Under this contract all payments to you for the Services will constitute employment income, but for tax and National Insurance purposes only.
38. Therefore in accordance with HMRC rules and PAYMAX’s client’s requirements, PAYMAX will deduct PAYE and Class 1 National Insurance Contributions from payments for Services made by PAYMAX to You. PAYMAX will also account to HMRC for Secondary Class 1 National Insurance Contributions on all payments for Services made to You by PAYMAX under this agreement. You agree to this treatment and to the deduction of these amounts from any payments made by PAYMAX to You.
39. The above clauses 38 and 39 apply for the express and limited purposes of HM Revenue & Customs’ treatment of this engagement. For tax purposes only, this engagement constitutes employment under Section 4 of the Income Tax (Earnings and Pensions) Act 2003 (“ITEPA”).
40. Otherwise than as explicitly specified under this contract You are a self-employed Operative. You have no contractual entitlement to sick pay, nor to any other payment during periods when Services are not provided including where the Services are cancelled by PAYMAX or by PAYMAX’ client.
41. You do not have any right to paid holiday under this contract.
42. ....
43. Except as mentioned in clauses 37 and 40 for the express purpose of ITEPA, the parties agree that the relationship between them is not one of employer and employee and that You are not engaged as a worker by PAYMAX.

[Seahorse17]

The original question was:

"Under what basis is the nurse treated for general purposes - as Self Employed for employment law purposes but with earnings accounted for via PAYE for tax purposes ?"

The point I was making is that the above is incorrect - For employment law purposes they are an employee of the umbrella.

The distinction can be important in all sorts of situations (e.g. Mortgage application, maternity pay) , so people do need to understand their status.

[cojak]

For beginners, for those who aren’t confident, competent or bothered to run their own business (or work in the NHS), umbrellas provide an alternative method of contracting.

Many people prefer to use umbrellas, and shouldn’t be castigated for doing so.

[ladymuck]

No, that's not correct.

If you work via an umbrella, you are an employee of the umbrella, and entitled to NMW, sick pay, holiday pay etc (all of which will ultimately come out of your day rate).

Yep (my emphasis). You pay for everything, including employers NI. They don't contribute to your pension, and you have to pay the Apprentice Levy. Oh, and you have to pay them a fee. Claiming (I guess it's more of an offset) of expenses is also very limited.

All the things an EMPLOYER would pay on your behalf, comes out of your daily rate.

You don't get paid notice on your contract termination, if your client doesn't pay it.

You don't have the right to redunancy pay.

You don't have the right of challenging constructive dismissal.

You don't get other rights too but, hey! You're an employee of an umbrella company, it's all golden.

Nope. It's the worst of both worlds.

[Seahorse17]

See What everybody ought to know about umbrella companies particularly 'Myth 1'

[Seahorse17]

No, that's not correct.

If you work via an umbrella, you are an employee of the umbrella, and entitled to NMW, sick pay, holiday pay etc (all of which will ultimately come out of your day rate).

[ss002d6252]

Pretty much bang on. Worst of both worlds. No rights but all the tax.

Thanks - that's one issued ticked off the list.

Now to move on to the next one.