Difference between PAYE and Umbrella

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lucyclarityumbrella replied

27 February 2018, 11:41
Originally posted by Cargie View Post

Hello

Newbie here......

Apologies this has probably already been asked a million times but......

I'm confused between Umbrella and PAYE!

I understand how PAYE is calculated (Personal allowance / Tax / NI) but what's the benefit of an Umbrella company when potentially you are going to pay them approx (£25 per week / £100 per month) just to process your wages. Just seems a bit odd to me, so must be missing something here?

I'm in the process of accepting a new job (40 hour week / £25 per hour) I believe it's inside IR35.

I would be prepared to do Ltd if there would be a significant difference in the bottom line over a 12 month period.

Any comments / advice is much appreciated.

Thank you in advance

Hi Cargie

Standard PAYE is slightly different to umbrella PAYE in that you should be looking for a higher rate than a standard employee' salary to cover the deductions that come from your contract rate. If you are inside IR35 then you will need to be paid via PAYE, some agencies or end clients will not work with you via your Ltd company as they will may not have the ability to make the tax deductions at source before paying your Ltd company.

If you are inside IR35 then operating Ltd or brolly will make no difference to your take home - they should be the same
Leave a comment:
Cargie replied

24 February 2018, 23:57
Thank you, I'll have a look
Leave a comment:
northernladuk replied

23 February 2018, 21:27
You also need to read all the threads in the Public Sector IR35 section of the forum as they are all about your exact situation.
Leave a comment:
northernladuk replied

23 February 2018, 21:27
http://m.paystream.co.uk/umbrella-co...the-difference

Other links are available.
Leave a comment:
Cargie started a topic Difference between PAYE and Umbrella

23 February 2018, 20:27
Difference between PAYE and Umbrella

Hello

Newbie here......

Apologies this has probably already been asked a million times but......

I'm confused between Umbrella and PAYE!

I understand how PAYE is calculated (Personal allowance / Tax / NI) but what's the benefit of an Umbrella company when potentially you are going to pay them approx (£25 per week / £100 per month) just to process your wages. Just seems a bit odd to me, so must be missing something here?

I'm in the process of accepting a new job (40 hour week / £25 per hour) I believe it's inside IR35.

I would be prepared to do Ltd if there would be a significant difference in the bottom line over a 12 month period.

Any comments / advice is much appreciated.

Thank you in advance
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