1st payslip questions

[lucyclarityumbrella]

I'm having to pay employers NI and Levy.

Standard and is deemed to come from the invoice value before your taxable salary is arrived at - this should have been explained to you at the start.

I'm basically down 53% of my Gross day rate for the month. Surely this cant be right?

Afraid so, assuming you are a 40% tax payer and your tax code means that your tax free allowance is around half that of a standard tax code (1250L ie £12,500 tax free allowance)

Or even recommendations of other umbrella companies to use? I see companies offering to keep about 80-90% of your gross. Are these safe?

[Paralytic]

I work with several people whom have used those kind of companies, some regretted it and others haven't had the letters from HMRC yet.

FTFY

[gareth1981]

You were told the answer to this 6 years ago. Nothing has changed. https://www.contractoruk.com/forums/...87-return.html

Thanks I do recall yes, albeit accused of being a salesman somehow and banned. I asked again as it was some time ago and I wanted to see whether things had moved on. I work with several people whom have used those kind of companies, some regretted it and others didn't. I'd rather stay away from, seeing from the general feeling about them and the inherit risk.

[gareth1981]

Were you in permanent work before moving to an Umbrella? Your tax code will be based on the benefits you received in that role and would be detailed in your P11d. You may (should?) also have received a tax coding notice from HMRC detailing how they came to calculate your tax code.

As you are no longer in permanent employment, receiving any benefits, you can notify HMRC of this and get your tax code changed.

It could be that your code is low because you're repaying a debt to HMRC and opted to have it collected via your tax code but since forgot or assumed it was repaid.

Your P45 from your old job will have your tax code on it - the umbrella would have taken that to calculate your tax. If you didn't supply a P45 to them then they would have contacted HMRC to find out your code, which would have been based on what HMRC historically know about you (ie the points above this sentence).


It is your responsibility to make sure your tax code is correct by checking the right deductions are being applied to it.

I was yes, seems like they have been unaware of me moving jobs ever since 2018 when I closed down a Ltd company I owned. So staring that process of having tax codes changes, possible tax refund from last year of working at perm place of work. I've been lax on getting tax code updated, but will have that changed now. thanks for that!

[GhostofTarbera]

Hello
So I have just got my first payslip from my umbrella company.
To say I am confused is an understatement.
I'm having to pay employers NI and Levy.

I'm basically down 53% of my Gross day rate for the month.
Surely this cant be right?

I am on a tax code of 731T, which may explain this.
On the phone to HMRC to see why, but otherwise.
Can anyone else provide some thoughts?

Or even recommendations of other umbrella companies to use? I see companies offering to keep about 80-90% of your gross. Are these safe?

Thanks!

It is correct yes, probably near to 40% if you have expenses you need to take from net pay also

Also remember you can’t get family allowance or 30 free hours if you have kids also


Sent from my iPhone using Contractor UK Forum

[cojak]

Using an Umbrella? CHECK YOUR TAX CODE!

[mjcp]

"T" indicates there is a question


Understanding your employees' tax codes: What the letters mean - GOV.UK

The lower bit in front can be for various reasons as mentioned above, or due to you earning >£100K... there is a sliding scale of personal allowance from 100-125K

Income Tax rates and Personal Allowances : Income over GBP100,000 - GOV.UK

M

[ladymuck]

Were you in permanent work before moving to an Umbrella? Your tax code will be based on the benefits you received in that role and would be detailed in your P11d. You may (should?) also have received a tax coding notice from HMRC detailing how they came to calculate your tax code.

As you are no longer in permanent employment, receiving any benefits, you can notify HMRC of this and get your tax code changed.

It could be that your code is low because you're repaying a debt to HMRC and opted to have it collected via your tax code but since forgot or assumed it was repaid.

Your P45 from your old job will have your tax code on it - the umbrella would have taken that to calculate your tax. If you didn't supply a P45 to them then they would have contacted HMRC to find out your code, which would have been based on what HMRC historically know about you (ie the points above this sentence).

It is your responsibility to make sure your tax code is correct by checking the right deductions are being applied to it.

[NotAllThere]

Or even recommendations of other umbrella companies to use? I see companies offering to keep about 80-90% of your gross. Are these safe?

You were told the answer to this 6 years ago. Nothing has changed. https://www.contractoruk.com/forums/...87-return.html

[gareth1981]

Many thanks!
Yeah I have heard about loan charges and been advised in the past to stay away from it.
Still being left with 47% seems ludicrous, hopefully an issue with tax code as I am on 731T at present.
Thanks for your help!

[wattaj]

Hello
So I have just got my first payslip from my umbrella company.
To say I am confused is an understatement.
I'm having to pay employers NI and Levy.

I'm basically down 53% of my Gross day rate for the month.
Surely this cant be right?

Yes, it's likely correct. You will be being paid an "umbrella rate" which is gross of all employment taxes. You should have been aware of this from the outset. Google is your friend.

Or even recommendations of other umbrella companies to use? I see companies offering to keep about 80-90% of your gross. Are these safe?

Seriously? FFS, Google "loan charge" and tell the "80-90%" wallahs to FRO.

This crap makes me so mad after so many years of explaining it.

[gareth1981]

Hello
So I have just got my first payslip from my umbrella company.
To say I am confused is an understatement.
I'm having to pay employers NI and Levy.

I'm basically down 53% of my Gross day rate for the month.
Surely this cant be right?

I am on a tax code of 731T, which may explain this.
On the phone to HMRC to see why, but otherwise.
Can anyone else provide some thoughts?

Or even recommendations of other umbrella companies to use? I see companies offering to keep about 80-90% of your gross. Are these safe?

Thanks!