Do you think I have been overcharged by the umbrella?

[sog]

Hi,

I received my first payslip from a known umbrella. In my pocket I'll get £3520.75 from £7500 gross, that's 47%, which seems low... I often hear people saying umbrellas pay around 60%.

I admit that I don't understand the breakdown very well.

Do you think I've been overcharged?

Thanks,
sog


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Tax code 1100L W1

Daily rate £500
Invoice for 15 days (15 * 500 = 7500)

Payments
Basic pay (NMW x hours) 864.00
Holiday pay advance 566.59
Bonus 3830.55
Advance PBA entitlement 876.86
Total payments: 6138.00

Deductions
PAYE 2399.39
NIC 507.36
Total deductions: 2906.75


Net pay: 3231.25
Expenses reimbursed: 289.50
Total pay: 3520.75


Project analysis:

Gross pay: 6138.00

Management contribution:
Budgeted expenses 307.20
Admin contribution 85.00
Employer pension contribution 122.76
Additional required contribution 847.04
Total management contribution: 1362.00

Total income: 7500.00

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[northernladuk]

Firsr job is to speak to them and go through it line by line. They are your employer so should really be able to answer it to your content.

[Fred Bloggs]

IMO, you're nuts using a brolly on £500 a day. You're throwing thousands down the pan every month.

[sog]

northernladuk: thanks, I was just hoping to get some information over the weekend, I'll talk to them on Monday.

Fred: I know, but I have a specific reason for doing that, I have to declare tax in another country and it makes it much easier for me.

[Fred Bloggs]

northernladuk: thanks, I was just hoping to get some information over the weekend, I'll talk to them on Monday.

Fred: I know, but I have a specific reason for doing that, I have to declare tax in another country and it makes it much easier for me.

You do realise that the documentation you get monthly and at tax year end is exactly the same if you work for a brolly or for YourCo? It makes no difference. The only difference is the tax and brolly fees you're paying. Plus there is the possibility to claim expenses from YourCo.

[sog]

Fred, you may be right, my understanding was that being a share holder of a Ltd company would involve more complex tax declaration abroad. I need to research this better.

[malvolio]

Fred, you may be right, my understanding was that being a share holder of a Ltd company would involve more complex tax declaration abroad.

It may well do.

I need to research this better.

However, you can afford to pay an expert to help you out...

As an aside, ask them to clarify what they mean by "Budgeted expenses". You claim what you've spent, no more, no less. Anything else is evasion.

[Fred Bloggs]

Fred, you may be right, my understanding was that being a share holder of a Ltd company would involve more complex tax declaration abroad. I need to research this better.

Like if you own shares in Tesco or M&S? I am by no means an expert on this, but given that the documents you'll have - P60, P11D and a UK self assessment to complete are identical for brolly and YourCo, then why the difference? You're a UK tax payer? There is a double taxation treaty with your home country? Struggling to see the problem to be honest with you.

[sog]

On the payslip issue, the problem is solved. It was the emergency tax code. I called HMRC and they changed it to a normal, cumulative tax code. The umbrella reprocessed the payslip and an extra £2500 appeared :-) :-)

[northernladuk]

There you go. Easy...