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Why am I paying Employers NI?

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    #31
    So, I have an agreed rate with an agent of 50p/h. No mention of "Umbrella rate".
    Had my first payslip today from Umbrella with Employers NI and Levy deducted. No mention of any deductions prior to contract certainly no pay "illustrations" from Umbrella indicating this.

    The Schedule issued by the agent to the Umbrella indicates a £50p/h rate - which the Umbrella have signed.

    Have the Umbrella made an unlawful deduction or not?

    I have not come from outside IR35 to inside. This is a new contract.

    Thanks for any guidance.

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      #32
      Originally posted by LardOrSteel View Post
      So, I have an agreed rate with an agent of 50p/h. No mention of "Umbrella rate".
      Had my first payslip today from Umbrella with Employers NI and Levy deducted. No mention of any deductions prior to contract certainly no pay "illustrations" from Umbrella indicating this.

      The Schedule issued by the agent to the Umbrella indicates a £50p/h rate - which the Umbrella have signed.

      Have the Umbrella made an unlawful deduction or not?

      I have not come from outside IR35 to inside. This is a new contract.

      Thanks for any guidance.
      But you must have known you were being paid by an umbrella?

      How did you manage to sign up with them, give them your P45 and goodness knows what else and not know this?

      Did you ever ask the umbrella for an illustration of your take home pay or did you think they would pass through the £50 p/h rate to you with no taxes deducted?

      I think you have fundamentally missed what an umbrella is and does.

      Comment


        #33
        Originally posted by ladymuck View Post
        But you must have known you were being paid by an umbrella?

        How did you manage to sign up with them, give them your P45 and goodness knows what else and not know this?

        Did you ever ask the umbrella for an illustration of your take home pay or did you think they would pass through the £50 p/h rate to you with no taxes deducted?

        I think you have fundamentally missed what an umbrella is and does.
        No I haven't I'm fully aware of what it does. As indicated in my post - the illustrations did not deduct employers NI.

        This article seems to indicate that it is still a common problem:
        Can umbrella companies deduct employer’s NI lawfully?

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          #34
          Originally posted by LardOrSteel View Post
          No I haven't I'm fully aware of what it does. As indicated in my post - the illustrations did not deduct employers NI.

          This article seems to indicate that it is still a common problem:
          Can umbrella companies deduct employer’s NI lawfully?
          Do you think the umbrella should pay your £500 employers NI out of the £40 fee you pay them every month?


          Sent from my iPhone using Contractor UK Forum

          Comment


            #35
            Originally posted by GhostofTarbera View Post
            Do you think the umbrella should pay your £500 employers NI out of the £40 fee you pay them every month?


            Sent from my iPhone using Contractor UK Forum
            You clearly didn't bother to read the article. The article seems to indicate that it is the agent that deducts the employers NI and that should be reflected as a deduction on the rate. This hasn't happened in my case and as I have repeatedly said, the Umbella illustration did not show a deduction for employers NI. If none of these factors are made clear then it could be misrepresentation.

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              #36
              Originally posted by LardOrSteel View Post
              No I haven't I'm fully aware of what it does. As indicated in my post - the illustrations did not deduct employers NI.

              This article seems to indicate that it is still a common problem:
              Can umbrella companies deduct employer’s NI lawfully?


              Did you ask them for an illustration before you signed up or did you just scrawl an X in crayon?

              Umbrellas deducting employers NI is not unlawful. Someone has to pay it. You were quoted by the agency £50 p/h. You chose (I assume, you don't say) to work via an umbrella rather than your own ltd company. The rate quoted is gross. You receive the nett.

              Comment


                #37
                Originally posted by ladymuck View Post
                Did you ask them for an illustration before you signed up or did you just scrawl an X in crayon?

                Umbrellas deducting employers NI is not unlawful. Someone has to pay it. You were quoted by the agency £50 p/h. You chose (I assume, you don't say) to work via an umbrella rather than your own ltd company. The rate quoted is gross. You receive the nett.
                You clearly did not read the article either


                Sent from my iPhone using Contractor UK Forum

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                  #38
                  Originally posted by LardOrSteel View Post
                  You clearly didn't bother to read the article. The article seems to indicate that it is the agent that deducts the employers NI and that should be reflected as a deduction on the rate. This hasn't happened in my case and as I have repeatedly said, the Umbella illustration did not show a deduction for employers NI. If none of these factors are made clear then it could be misrepresentation.
                  Make it back on your expenses claim


                  Sent from my iPhone using Contractor UK Forum

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                    #39
                    Originally posted by GhostofTarbera View Post
                    You clearly did not read the article either


                    Sent from my iPhone using Contractor UK Forum
                    Ah so they failed to say there were working in the public sector in an inside IR35 contract.

                    Comment


                      #40
                      Originally posted by ladymuck View Post
                      Did you ask them for an illustration before you signed up or did you just scrawl an X in crayon?

                      Umbrellas deducting employers NI is not unlawful. Someone has to pay it. You were quoted by the agency £50 p/h. You chose (I assume, you don't say) to work via an umbrella rather than your own ltd company. The rate quoted is gross. You receive the nett.
                      Umbrellas deducting employers NI is not unlawful advertising a rate which isn't the rate you get on your payslip probably is if the contract is inside IR35 and things were not properly explained in a documented way.

                      So 1 quick question for LardOrSteel. Was the £50 rate you negotiated a rate for a contract inside IR35 or outside IR35. And if the latter could you have used a limited company or was an umbrella company your only choice.

                      If it is the latter and you had a choice the fact you are using an umbrella is your business decision and there is little you can do about it.

                      If it is the former or they insisted that an umbrella company was your only choice then I would go and speak to Dave Chaplin (Contractor Calculator) who can point you in the direction of lawyers who will willingly take up your argument with the agency. Be warned that the agency will fire you asap so don't start the court case until you have another contract and have left.

                      Edit to add something I posted on LinkedIn this morning

                      And as no agency seems to have a grasped - an inside IR35 contract is not a business to business transaction it is an employment / consumer transaction. So let me show you the difference:-

                      In a B2B transactions it is up to both sides to get proper legal advice and it would be assumed by a court that both sides did so.


                      In an employment transaction it is up to the employer to provide that advice and confirm that the employee understood what they were being told. That may (and does include) paying a separate law firm to advice the employee as to what the best action for them is.
                      Last edited by eek; 7 February 2020, 07:59.
                      merely at clientco for the entertainment

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