Originally posted by johnny contractor
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Contractor Umbrella - any good?
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I dealt with CU many years ago - found them fantastically helpful compared to the likes of certain other companies - who gave me grief. When I was dealing with them they seemed to have intelligent knowledgeable people answering the phone - big difference from some others. The only hassle I had was that some agencies wouldn't use them.Comment
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Originally posted by dmini View PostI dealt with CU many years ago - found them fantastically helpful compared to the likes of certain other companies - who gave me grief. When I was dealing with them they seemed to have intelligent knowledgeable people answering the phone - big difference from some others. The only hassle I had was that some agencies wouldn't use them.Comment
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I want to go with contractor umbrella , weekly charge is £29.50, do I have to pay apprenticeship levy on top of this?Comment
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Originally posted by teecee View PostI want to go with contractor umbrella , weekly charge is £29.50, do I have to pay apprenticeship levy on top of this?Comment
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In considering the terms of the legislation we need to be precise and note at the outset that Section 109 prohibits recovery from your "earnings" which is not the same as from "payments made to a worker".
Our business is based on Contracts/Agreements between third parties and Contractor Umbrella Limited for the services of our employees. In most cases, we have a contract between the Agency/End Client and Contractor Umbrella Limited for your services. Funds received flowing from that Contract belong to Contractor Umbrella Limited and we meet our obligation to pay Employment Taxes from those funds. In addition, we deduct an arbitrary margin in arriving at “earnings” of employees that are then subjected to Income Tax and National Insurance Contributions.
Our standard Contract of Employment includes the following terms:
• Your pay is payable at monthly intervals (or such shorter intervals as may from time to time be notified in relation to particular assignments) in arrears on the basis from time to time agreed with you and will be calculated as follows:
• when working on assignments you will be paid at the "assignment rate". The assignment rate will be [the London Living Wage, as defined by The Living Wage Foundation] in addition to which you may be eligible from time to time to a bonus in respect of Company profit generated from work on assignments. The bonus applicable to any assignment will vary from assignment to assignment and will be notified to you prior to commencement of each assignment but in any event shall not be payable unless and until the Company has been paid in full for your work in the relevant assignment, you having a responsibility to help the Company receive payment for the assignment
• Your entitlement to be paid at any assignment rate [greater than the London Living Wage] is payable subject to any profits generated from the assignment; bonus payments will not be payable should the assignment not return a profit for the Company. You will be reasonably expected to accept assignments that the Company sources from time to time.
So, in summary, your “earnings” amount to the London Living Wage plus a Bonus based on the profit that Contractor Umbrella Limited makes from the Contract with the Agency / End Client. In calculating that profit Contractor Umbrella Limited has first to deduct payments that have to be made to HMRC, (secondary Class 1 contributions and, from April 2017 the apprenticeship levy), and an arbitrary margin that covers general running costs. In other words the “Bonus” part of your earnings cannot be calculated or be available until after statutory payments have been set aside for payment to HMRC.
It follows that we are not recovering the cost of the apprenticeship levy from the worker's earnings.
HTHComment
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at what % is this cost deducted? To my mind, as it is calculated on a % of payroll figures how do you work out what to deduct from your "contract rate" to an individual worker.
Just to be clear i am not questioning the validity of your contract or indeed the fact that charge rate is to you not the worker. But if its not clear or indeed shown on your online calculator and it's a figure that seems quite hard to calculate, i can't help seeing it as a hidden cost/fee.Comment
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Originally posted by lucycontractorumbrella View PostIn considering the terms of the legislation we need to be precise and note at the outset that Section 109 prohibits recovery from your "earnings" which is not the same as from "payments made to a worker".
Our business is based on Contracts/Agreements between third parties and Contractor Umbrella Limited for the services of our employees. In most cases, we have a contract between the Agency/End Client and Contractor Umbrella Limited for your services. Funds received flowing from that Contract belong to Contractor Umbrella Limited and we meet our obligation to pay Employment Taxes from those funds. In addition, we deduct an arbitrary margin in arriving at “earnings” of employees that are then subjected to Income Tax and National Insurance Contributions.
Our standard Contract of Employment includes the following terms:
• Your pay is payable at monthly intervals (or such shorter intervals as may from time to time be notified in relation to particular assignments) in arrears on the basis from time to time agreed with you and will be calculated as follows:
• when working on assignments you will be paid at the "assignment rate". The assignment rate will be [the London Living Wage, as defined by The Living Wage Foundation] in addition to which you may be eligible from time to time to a bonus in respect of Company profit generated from work on assignments. The bonus applicable to any assignment will vary from assignment to assignment and will be notified to you prior to commencement of each assignment but in any event shall not be payable unless and until the Company has been paid in full for your work in the relevant assignment, you having a responsibility to help the Company receive payment for the assignment
• Your entitlement to be paid at any assignment rate [greater than the London Living Wage] is payable subject to any profits generated from the assignment; bonus payments will not be payable should the assignment not return a profit for the Company. You will be reasonably expected to accept assignments that the Company sources from time to time.
So, in summary, your “earnings” amount to the London Living Wage plus a Bonus based on the profit that Contractor Umbrella Limited makes from the Contract with the Agency / End Client. In calculating that profit Contractor Umbrella Limited has first to deduct payments that have to be made to HMRC, (secondary Class 1 contributions and, from April 2017 the apprenticeship levy), and an arbitrary margin that covers general running costs. In other words the “Bonus” part of your earnings cannot be calculated or be available until after statutory payments have been set aside for payment to HMRC.
It follows that we are not recovering the cost of the apprenticeship levy from the worker's earnings.
HTHComment
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i think the simple question here is:
Will a contractor working though CU prior to the change in AL legislation see a drop in take home earnings after the legislation takes effect assuming no other changes to their rate or paid hours/days?
I.E. If they took home £300 per day before the changes, how much will they take home after, assuming nothing else changes?"Being nice costs nothing and sometimes gets you extra bacon" - Pondlife.Comment
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