Why am I paying Employers NI?

[LardOrSteel]

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.

[lucyclarityumbrella]

I've seen the same and as far as I can workout what SHOULD happen is....

Should being the appropriate word! Post April I don't think there should be any discrepancies if the rate is advertised as an "umbrella rate" not an inside IR35 rate, at that point there cannot be an arguement.

[SimonMac]

Its such a mess.

Seen posts on Linkedin with prominent people who are part of offpayroll.org.uk saying that the new Legislation says it must be the client and not the contractor that pays employers NI & App Levy.

It makes it so difficult to negotiate when nobody knows what they are talking about or meant to be doing. Other than standing strong for what you are worth but then missing out on opportunities.

I've seen the same and as far as I can workout what SHOULD happen is....

• Brolly, you get an assignment rate and all deductions (including holiday, Employers taxes and margin) comes out of the headline rate
• Inside/PAYE, your agreed rate should not include Employers taxes, only income tax and employees NI as per section 44 of ITEPA (I think)

However what should and will happen is never the same, most if not all will try and pass off the fees to the contractor, either in a rate reduction in the contract or by hoping the contractors doesn't notice and pursue legal recourse

[DolanContractorGroup]

Its such a mess.

Seen posts on Linkedin with prominent people who are part of offpayroll.org.uk saying that the new Legislation says it must be the client and not the contractor that pays employers NI & App Levy.

It makes it so difficult to negotiate when nobody knows what they are talking about or meant to be doing. Other than standing strong for what you are worth but then missing out on opportunities.

Hi Sheep1019284,

You're talking about the IR35 rules here. This is completely different to umbrella employment.


Thanks

Zeeshan

[BR14]

oh, dear

[GhostofTarbera]

Its such a mess.

Seen posts on Linkedin with prominent people who are part of offpayroll.org.uk saying that the new Legislation says it must be the client and not the contractor that pays employers NI & App Levy.

It makes it so difficult to negotiate when nobody knows what they are talking about or meant to be doing. Other than standing strong for what you are worth but then missing out on opportunities.

We all know who pays the employer NI and app levy

It’s us from our rate

Not sure you are looking at reality in linkin

It’s clear 100% who pays, no discussions , no questions it’s us

Why do you think different?


Sent from my iPhone using Contractor UK Forum

[Sheep1019284]

Its such a mess.

Seen posts on Linkedin with prominent people who are part of offpayroll.org.uk saying that the new Legislation says it must be the client and not the contractor that pays employers NI & App Levy.

It makes it so difficult to negotiate when nobody knows what they are talking about or meant to be doing. Other than standing strong for what you are worth but then missing out on opportunities.

[DolanContractorGroup]

On the contractor umbrella calculator, it lists Margin as one of the deductions. What margin are they referring to? They normal agency margin is being passed down to the contractor? With then a further umbrella fee to the contractor on top to come?

Hi Sheep1019284,

The margin is the profit the umbrella company makes by providing your services to the agency or the client. This is deducted from the umbrella income on a weekly or monthly basis, depending on when the agency/client pays us.

Thanks


Zeeshan

[Sheep1019284]

Thanks for your answers. Its cat and mouse, the rates aren't always listed so it comes down to the conversations with recruiters.

If thats the case, i guess once established with the recruiter if they are quoting the Assignment Rate/Umbrella rate or just the Gross Contractor rate a breakdown of terms will be included within the contract so that there is no scope to challenge this legally later on?

On the contractor umbrella calculator, it lists Margin as one of the deductions. What margin are they referring to? They normal agency margin is being passed down to the contractor? With then a further umbrella fee to the contractor on top to come?

[lucyclarityumbrella]

I think post April this is all going to be down to how the contract is advertised. My guess is an inside IR35 rate gives an arguement under the legislation that employment costs must be met by the end client. However if advertised as an umbrella rate, then it could be argued that this has already been taken into account (whether it does in reality or not). Just my thoughts