Reply to: Payslip - Employers NIC and NI by Employer?

[LisaContractorUmbrella]

Better to take your time and put together a considered response rather than just rushing it..........

[One Click Group]

Mind you, having now read the reply properly, I think they should have spent longer.....

[One Click Group]

You do realise that post was about 20 months old?

Better to take your time and put together a considered response rather than just rushing it..........

[stek]

If you are working under umbrella company, its obvious you will see two splits of NI one is employer NI and other is Employee NI
As your earning from job are the only revenue, umbrella company needs to pull out thr charge and employer NI which they need to pay to Govt on your behalf.

If they dont charge employer NI, where will they get this money from??? its standard in UK nothing wrong in it.. if req please understand how it works than complaining on companies.. i work myself under umbrella company infact changed from few considering the charge they take... but apart from charges calculations are always same as government decided the %'s

Its your money given to you in acceptable format by government... for doing all this it do cost some money, which is umbrella company charge.

You do realise that post was about 20 months old?

[kaykay1583]

Umbrella Services Employer NI

If you are working under umbrella company, its obvious you will see two splits of NI one is employer NI and other is Employee NI
As your earning from job are the only revenue, umbrella company needs to pull out thr charge and employer NI which they need to pay to Govt on your behalf.

If they dont charge employer NI, where will they get this money from??? its standard in UK nothing wrong in it.. if req please understand how it works than complaining on companies.. i work myself under umbrella company infact changed from few considering the charge they take... but apart from charges calculations are always same as government decided the %'s

Its your money given to you in acceptable format by government... for doing all this it do cost some money, which is umbrella company charge.

[Wary]

I'm not going to name the company yet as it's unfair to drag them through the mud if they've just made an honest mistake.

Good point, although if they come back to you and say it was an "honest mistake", you're not gonna for certain whether it was just that, or whether they were trying it on hoping you wouldn't notice.

It would be worth giving them the benefit of the doubt and post the name of the company at that point, along with praise for having rectified it. This has the advantage of forewarning all others with that umbrella who may not be as astute as you, so they can check their payslip too. I would hope that if it were an honest mistake, they would proactively check & rectify all other payslips. (I can't see why it would be an issue for you only as presumably the payroll calculation is computerised.) But I wouldn't rely on it.

[JPeG]

Still no Email at the end of today. Not even one saying they are looking into it or that it may take a while. I wonder if this is a bigger problem for them than just me?

[JPeG]

No news yet

O.K. so I waited until after lunch and had not received any call or Email response from the Umbrella company so I rang the payroll enquiries number. I spoke to a guy who initially went through the whole 'this is how an Umbrella company works financially' bit and I said I knew all about that, but what's this additional 'NI by Employer' deduction from my taxable pay? His initial thoughts were that it was simply a layout error on the pay slip and the data had simply been duplicated but I insisted that the deduction had clearly been made twice. Finally we left it that he would get the payroll team to look into it and Email me a response when he had got to the bottom of it.

I'm not going to name the company yet as it's unfair to drag them through the mud if they've just made an honest mistake.

In my last permanent post the company upgraded their payroll system after I had been there a year, and suddenly the pension payments changed as a result, but nobody noticed for about 3-4 years. Now there's the potential for HMRC to want some money back because of it. But it wasn't a deliberate error or any attempt at deception and I wouldn't drag a companys name through the mud because of an honest mistake. Those of us who are human would admit to making the odd mistake and wouldn't want to be destroyed because of it, would we?

[Wary]

It seems that some of you aren't reading too closely what I have said. The pay advice quite clearly shows that Allowed Expenses, Umbrella Fee and Employers NIC are deducted from the gross amount giving the taxable amount, and all figures are correct.

Then, the correct amount of income Tax and NI Contribution (employees NIC) are deducted and this additional NI by Employer is also deducted, which just happens to be exactly the same amount as the Employers NIC deducted from the gross amount.

Now, it seems to me that if anything is listed as NI or NIC then it belongs to HMRC but they surely won't be expecting two lots of Employers NIC. So if the Umbrella company is keeping this money isn't that just a little bit illegal?

You are correct that they should not deduct employers twice. If they are doing this then they would likely be pocketing the difference.

As has been said, there are definitely umbrellas who are taking additional deductions in an underhand way, and it may be the case here although I've never heard of this extreme. You are convinced that you've interpreted the payslip correctly, but they are often confusing and a jumble of figures, and we'd need to see the actual breakdown before we could be convinced, especially as some online calculators confirm it to be correct.

It would be useful if you could name the company in question.

Good luck, and do post any response that you get from them.

[JPeG]

Seems plain to me, OP has deductions for "Employers NIC" - ie ERNI and "NI by Employer" - ie EENI.

It seems that some of you aren't reading too closely what I have said. The pay advice quite clearly shows that Allowed Expenses, Umbrella Fee and Employers NIC are deducted from the gross amount giving the taxable amount, and all figures are correct.

Then, the correct amount of income Tax and NI Contribution (employees NIC) are deducted and this additional NI by Employer is also deducted, which just happens to be exactly the same amount as the Employers NIC deducted from the gross amount.

Now, it seems to me that if anything is listed as NI or NIC then it belongs to HMRC but they surely won't be expecting two lots of Employers NIC. So if the Umbrella company is keeping this money isn't that just a little bit illegal?

[stek]

@stek - that's the old brolly vs' ltd debate. The question which JPeG asked is why have two deductions for employers NI been made.

Seems plain to me, OP has deductions for "Employers NIC" - ie ERNI and "NI by Employer" - ie EENI.

[fred857]

agree with your "..running off with your money.." bit!

[TheFaQQer]

yep, will save you thousands..fine and dandy..until Hector comes a knocking at the door..

If your contract and working practices are outside IR35, then you'll save thousands.

If your contract and working practices are inside IR35, and HMRC come calling, and you have declared yourself outside IR35, and you have appropriate insurance, then you'll save thousands.

If your contract and working practices are inside IR35, and HMRC come calling, and you have declared yourself outside IR35, and you have taken reasonable steps with regards to checking your IR35 status, and you do not have appropriate insurance, and you have paid into a pension fund correctly, then you'll have to pay something back to HMRC.

If your contract and working practices are inside IR35, and HMRC come calling, and you have declared yourself outside IR35, and you have taken reasonable steps with regards to checking your IR35 status, and you do not have appropriate insurance, and you have not paid into a pension fund correctly, then you'll have to pay the back tax to HMRC.

If you are inside IR35 and run Ltd, then will still be better off than running an umbrella, with reduced risk of someone running off with your money.

[fred857]

yep, will save you thousands..fine and dandy..until Hector comes a knocking at the door..

[escapeUK]

Are you sure its actually taken off twice and not just shown twice. I was with Parasol and their payslips were awful, they actually came with a multipage pdf trying to explain them.

Like the other poster said, go Ltd. It will save you thousands.