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Umbrella Employers NI

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    Umbrella Employers NI

    Hello,

    First time poster.....

    I have recently switched from LTD to a Umbrella PAYE solution (due to IR35). I am now using the correct umbrella solutions and feel I can sleep at night without any recourse from HMRC.

    The current Umbrella I use charges my the 13.8% employers NI as do other large Umbrella companies.

    I have however found out that Prestige Umbrella offer a service where they do not deduct the employers NI as they set me as self employed. So what this means is if I invoice £100k a year i receive £95k into my own personal bank account (£5k being their). I am then expected to pay all NI and taxes as part of my self assessment.

    My question is, does this sound reasonable? It does to me as I am a contractor and believe I should only pay my own NI and own taxes (20%/40%).

    Any thoughts on this would be helpful.

    thanks,

    #2
    Employers' NI is the client's debt, or the agency's, or the umbrellas, not yours.

    Are you getting the originally advertised day rate or that less 13.8%. If the latter, someone is breaking the law (specifically Chapter 10 of ITEPA 2003 as amended).
    Blog? What blog...?

    Comment


      #3
      Originally posted by malvolio View Post
      Employers' NI is the client's debt, or the agency's, or the umbrellas, not yours.

      Are you getting the originally advertised day rate or that less 13.8%. If the latter, someone is breaking the law (specifically Chapter 10 of ITEPA 2003 as amended).
      Yes I have the 13.8% deducted along with my employee NI and income tax. But this is the industry standard.

      Comment


        #4
        Originally posted by bman06 View Post
        Yes I have the 13.8% deducted along with my employee NI and income tax. But this is the industry standard.
        Doesn't make it right.

        If you have a LinkedIn account, read this post
        Blog? What blog...?

        Comment


          #5
          Originally posted by bman06 View Post
          Yes I have the 13.8% deducted along with my employee NI and income tax. But this is the industry standard.
          As mal said, the game changed in April last year. If your client is public sector, and has deemed the role to be 'inside IR35' then ErNI is their responsibility, and it should not be deducted from the advertised rate.

          To answer your original question, I would be very wary of anything that could be construed as artifically avoiding tax due.

          Comment


            #6
            Originally posted by mudskipper View Post
            As mal said, the game changed in April last year. If your client is public sector, and has deemed the role to be 'inside IR35' then ErNI is their responsibility, and it should not be deducted from the advertised rate.

            To answer your original question, I would be very wary of anything that could be construed as artifically avoiding tax due.
            Think about how much those "savings" will cost you in interest and penalties if it turns out you were told lies HMRC think otherwise and prove it in a court of law, possibly with the help of new legislation from the government. Compare and contrast with how much your advisors are making out of you, risk free.
            Down with racism. Long live miscegenation!

            Comment


              #7
              Most recruiters now will advertise a job (or give the options of ) say £23 PAYE or £29 ltd / umbrella. Most people still stray to the 29 as it looks more but in reality the end product of PAYE and umbrella should be pretty much the same.

              If you are inside IR35 prestige shouldn’t be paying you gross and won’t be for long when you’re agency or end clients do a pay audit. Also 5% of your pay just for them to make the transfer is scandalous.

              More workers inside IR35 seem to be using ltd companies recently as they can offset some expenses and their accountants can claim back some of the tax deducted by the agency.

              Comment


                #8
                If you work for a public sector client, then they are liable for the employers NIC.

                This is in legislation and is inescapable.

                If the client/umbrella try to charge you that amount, you have a claim against them. You may need to go to a Tribunal to prove it, but it's there.

                It may be "industry standard" to charge you, but that standard will have to change where the client is in the public sector and bluntly, compliant umbrellas should already be doing this.

                As for an umbrella "setting" you to self employed, that is a dangerous path.

                Neither you, not an umbrella, nor HMRC can "set" your status. Your tax status as employee or self employed, arises from the job you are doing, how you do it, when, where, etc. Dozens of factors are included in this.

                The only reason an umbrella may "set" your status is to avoid NIC.

                Without a proper review of your circumstances that can be used to defend the status applied and some form of guarantee from the umbrella, my advice is to walk away.
                Best Forum Adviser & Forum Personality of the Year 2018.

                (No, me neither).

                Comment


                  #9
                  I work in the Private sector.

                  The reason I moved away from my LTD company and to a PAYE umbrella solution was because I fall foul of IR35. So to avoid any investigations from HMRC I simply corrected my position.

                  So im still none the wiser if I should pay the employer NI or if the umbrella company should.

                  Lucy seems like she knows whats going on, what do you think?

                  Comment


                    #10
                    Originally posted by bman06 View Post
                    I work in the Private sector.

                    The reason I moved away from my LTD company and to a PAYE umbrella solution was because I fall foul of IR35. So to avoid any investigations from HMRC I simply corrected my position.

                    So im still none the wiser if I should pay the employer NI or if the umbrella company should.
                    You've had that answered at least three times now. What do you think?

                    Lucy seems like she knows whats going on, what do you think?
                    She does.
                    Blog? What blog...?

                    Comment

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