Employee NI when a single payment covers multiple months

[lucyclarityumbrella]

Is this correct?

It is indeed - sorry probably not what you wanted to hear!

[eek]

Are you a director of the umbrella firm?

As you aren't the rules are very clear cut - the single allowance from the period you are being paid should be used.

You really should be using weekly or monthly invoicing and not being clever.

[David S]

Like many contractors I have recently switched to an umbrella company having operated through my own limited company.

I have been trying to take advantage of the IR rules for non Directors as regards payment of the employee NIC, by submitting my weekly agency timesheets for a couple of months into one submission (ie submitting 8 or 9 all on the same day), in the expectation that the Employee NI charge would be treated as if the payment were in a single month and therefore the amount capped to 2% rather than 12% once the gross salary for tax and NIC purposes has exceeded £4,189. Payment by the umbrella company is only ever made monthly.

However the umbrella company is having none of this and is telling me that even though there is just the one payment in the month, the payroll system is hard-coded to ensure that 1 interval/allowance is provided per monthly timesheet, and that 1 NI threshold cannot be applied to a payment for 2 monthly timesheets in a single tax month.

Is this correct? I suspect it is and obviously want to ensure everything is legitimate, but I cannot find this anywhere on the HMRC website. Any guidance would be most helpful.