Reply to: need clarification about NIC's

[LisaContractorUmbrella]

If you husband works in construction then I am not sure that he won't fall under the Construction Industry Scheme - have a read here HM Revenue & Customs: Deciding whether your work comes within CIS just to make sure.

HTH

[northernladuk]

Hi Suellen, it's very likely that he will stay in the same 'square mile' at best he may be moved to another yard approx 15 miles from where he is now, plus as with all recruitment agencies they promise long term work but it doesn't always turn out that way, so he could find himself unemployed within the 2 years.

Thanks for your advice.

Just remember that if he is with an umbrella he will stay employed with them or if he is with a LTD he will still be employed by them.

It is a 40% rolling window about time on site so even if he does lose a gig the clock stops temporarily but if he still does over 40% in a rolling 2 year window he has to stop claiming. It's a complex area and you seem to be up to your neck in it so don't worry too much about the complexities of the 24 month rule. Just get your employment situation sorted first.

[GazCol]

Hi Gazcol, he's not CIS ? he's not using a UTR number, he's using his national insurance number.

He might not be; but the umbrella scheme used would have been. For that reason, and to get an accurate idea of exactly what liabilities are owed for that year you really need to speak to a professional in that area.

[billyd]

As this is CIS related you'll get a much better response asking your accountant or asking for advice on AccountingWeb - it's a different breed of contractor in these parts.

Hi Gazcol, he's not CIS ? he's not using a UTR number, he's using his national insurance number.

[billyd]

Hi Suellen, it's very likely that he will stay in the same 'square mile' at best he may be moved to another yard approx 15 miles from where he is now, plus as with all recruitment agencies they promise long term work but it doesn't always turn out that way, so he could find himself unemployed within the 2 years.

Thanks for your advice.

[GazCol]

Yes I'll get him to follow Lisa's advice in post 8 which I somehow managed to miss and answered post 9 instead.



I cant tell either and my hubby is worse than useless lol, I do know he's deffo not CIS tho, and nothing is getting deducted at source as all of his wages are going into his bank.



Yes

No it wasn't T and L that suggested my husband get an umbrella company, T and L was the company he used while he was working in London, then when a different reqruitment agency (who he's with now) offered him work he just used T and L again to pay his wages, Oh dear I think I'm just making things worse while I'm trying to explain things.

T&L are just paying money into his bank account, he gets emailed self billing with no deductions whatsoever.

As this is CIS related you'll get a much better response asking your accountant or asking for advice on AccountingWeb - it's a different breed of contractor in these parts.

[SueEllen]

Fortunately we have set aside 20% of his wages for tax, but he's also NOT paid any NIC's since he started and I'm assuming that wont be as cheap as it was when he was self employed. Would it be better for him just to go PAYE with the recruitment agency, he has no expenses he can claim for and is hopeful that this may be a long term contract, or is there an advantage going through umbrella ?

Travel expenses he can probably claim for unless he's spend two years working in say the square mile. If he's like the contractors I know in various other fields it's unlikely he spends more than a few months in one location before moving to somewhere else and then coming back.

That's why I suggested in my last post to talk to either Contractor Umbrella or Nixon Williams.

[billyd]

It is impossible to unwittingly set up a limited company. However, you (or your husband) has signed a contract with T&L which says that you have taken advice (which you didn't), and understand your situation (which you don't).

T&L are also under the impression that you have been working through a Ltd company, which is why they are asking for a certificate of incorporation and a VAT certificate.

Speak to an umbrella company. Speak to an accountant. Speak to T&L. Make sure you work out what you have done - only once you know what you have done can you work out what you need to do in the future.

Thankyou you for clarifying the part about why T&L are asking for certificate of incorporation and VAT Certificate. and a big thanks to all of you who have had the patience to stick with this thread and yes I agree he should phone T&L up to get a better understanding of what he has done, it's getting him to agree tho, as said previous he's just buried his head in the sand and it's me that's having the sleepless nights

[billyd]

He's laughing at you and some of us are rolling our eyes because we can't believe someone would sign contracts without reading and understanding them.

You can be VAT registered as a sole trader.

I strongly suggest you do what Lisa from Contractor Umbrella has told you to do in previous posts.

Yes I'll get him to follow Lisa's advice in post 8 which I somehow managed to miss and answered post 9 instead.

From your first post, I can’t really tell how it is that you are currently working (umbrella/ltd company/offshore scheme) so can’t really give much advice without knowing more. If you are having 20% deducted at source, are you on the CIS scheme perhaps?
Hope this helps!
Craig

I cant tell either and my hubby is worse than useless lol, I do know he's deffo not CIS tho, and nothing is getting deducted at source as all of his wages are going into his bank.

Does your husband work in construction?

Yes

I would go back to T and L and ask them exactly what the situation is. No good asking us if you are employed by someone. You said you were employed by them but they suggested you got an umbrella.

No it wasn't T and L that suggested my husband get an umbrella company, T and L was the company he used while he was working in London, then when a different reqruitment agency (who he's with now) offered him work he just used T and L again to pay his wages, Oh dear I think I'm just making things worse while I'm trying to explain things.

Are T&L doing your wages (wage slips, tax code etc etc) or just paying you money from the contract. You have to know these things before we can help.

T&L are just paying money into his bank account, he gets emailed self billing with no deductions whatsoever. [/quote]

No, you can't set up a Ltd Co unwittingly. What you have done though is to sign a contract which enables the company you have registered with to abdicate any responsibility for your taxes. If you are working with a recruitment agency, they can't work with sole traders so they would expect you to set up your own Limited Company or work with an umbrella company.

Thankyou, I'm starting to understand this a bit better now.

This agency seem to have directed you to a company that is operating some sort of tax avoidance scheme - an umbrella company should take you on as an employee and will pay you through PAYE - they shouldn't take a part of your earnings and then pay you gross.

The recruitment company didn't direct my hubby to T and L, it was his choice to phone them up again after leaving the contract he worked on in London, When he started with his current recruitment agency they advised that he either go PAYE or through an umbrella, this is what he thought he had done when he signed the new contract with T and L [/quote]

If I were you I would set up a Ltd Co and register with a decent accountant or join a PAYE umbrella company and I would also calculate what tax you already owe so that you can put it aside to be paid at a later date.

Fortunately we have set aside 20% of his wages for tax, but he's also NOT paid any NIC's since he started and I'm assuming that wont be as cheap as it was when he was self employed. Would it be better for him just to go PAYE with the recruitment agency, he has no expenses he can claim for and is hopeful that this may be a long term contract, or is there an advantage going through umbrella ?

Oh, and I know it's hard but your husband is going to have to pull his head out of the sand. It sounds like you could be in breach of contract with T&L if they expect you to be a company and you are not which could have your husband walked out of the gig. If you are going to go down LTD company route the director has a legal responsibility to do all this and not stick heads in sand.

I completely agree

[DirtyDog]

Hi Lisa, yes I have signed a contract with them, I think I've been very stupid. The last paragraph of my contract says this

This contract is entered into with your company on the understanding that you are operating in business on your own account, and that having considered your position and taken advice you are satisfied that you outside of the difiniton of a "worker" or "agency worker" as defined in Regulations 2 and 3 of the Agency Workers Regulations 2010, and that you fall outside of IR35. You are required to sign a declaration to this efect as part of the Contract Confirmation Documentation enclosed with this letter.

Is it possible that I have unwittingly set myself up as a LTD Company ? and that's the reason they have asked for VAT Registration Certificate.

It is impossible to unwittingly set up a limited company. However, you (or your husband) has signed a contract with T&L which says that you have taken advice (which you didn't), and understand your situation (which you don't).

T&L are also under the impression that you have been working through a Ltd company, which is why they are asking for a certificate of incorporation and a VAT certificate.

Speak to an umbrella company. Speak to an accountant. Speak to T&L. Make sure you work out what you have done - only once you know what you have done can you work out what you need to do in the future.

[SueEllen]

billyd I suggest you contact either or both Contractor Umbrella (umbrella company) or Nixon Williams (accountants) - google for their details and explain your situation. One of them will help you get out of the mess you are in.

[northernladuk]

Oh, and I know it's hard but your husband is going to have to pull his head out of the sand. It sounds like you could be in breach of contract with T&L if they expect you to be a company and you are not which could have your husband walked out of the gig. If you are going to go down LTD company route the director has a legal responsibility to do all this and not stick heads in sand.

[LisaContractorUmbrella]

Hi Lisa, yes I have signed a contract with them, I think I've been very stupid. The last paragraph of my contract says this

This contract is entered into with your company on the understanding that you are operating in business on your own account, and that having considered your position and taken advice you are satisfied that you outside of the difiniton of a "worker" or "agency worker" as defined in Regulations 2 and 3 of the Agency Workers Regulations 2010, and that you fall outside of IR35. You are required to sign a declaration to this efect as part of the Contract Confirmation Documentation enclosed with this letter.

Is it possible that I have unwittingly set myself up as a LTD Company ? and that's the reason they have asked for VAT Registration Certificate.

No, you can't set up a Ltd Co unwittingly. What you have done though is to sign a contract which enables the company you have registered with to abdicate any responsibility for your taxes. If you are working with a recruitment agency, they can't work with sole traders so they would expect you to set up your own Limited Company or work with an umbrella company. This agency seem to have directed you to a company that is operating some sort of tax avoidance scheme - an umbrella company should take you on as an employee and will pay you through PAYE - they shouldn't take a part of your earnings and then pay you gross.

If I were you I would set up a Ltd Co and register with a decent accountant or join a PAYE umbrella company and I would also calculate what tax you already owe so that you can put it aside to be paid at a later date.

[northernladuk]

For someone with over 14,000 posts I really don't find your replies helpful and if all your going to do is laugh then please refrain from posting.

What I should have explained from the beginning, is I'm posting on behalf of my husband who has buried his head in the sand to the point of us now not being on speaking terms so I'm trying to find the best solution whereby he's paying his tax and national insurance correctly, I'm sorry if I'm not using the correct terminology for your liking.

If you can provide any useful answers or if you need me to clarify things then I'm quite happy to do so.

The problem is you are in a very complicated situation which appears (to me at least) you don't fully have a grasp of. You are then trying to communicate this skewed situation to a bunch of strangers who are trying to make out the situation and then offer advice. So you see it's hardly ideal. If people can help they will need exact details of the situation, not guestimates or 'we might have done' I am afraid. To say you were employed by an agent and did we accidentaly set up a LTD etc just makes it nigh on impossible to advice. We don't know. Getting a clearer picture of your own situation might actually make the answer a lot simpler.

I would go back to T and L and ask them exactly what the situation is. No good asking us if you are employed by someone. You said you were employed by them but they suggested you got an umbrella. That would mean you are employed by the Umbrella and contracted to T and L. Did you sign up to an Umbrella. Are T&L doing your wages (wage slips, tax code etc etc) or just paying you money from the contract. You have to know these things before we can help.

[GazCol]

Does your husband work in construction?