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Parasol mess

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    Parasol mess

    Hi All, First time here on this forum, and what a great resource. So my story goes like this...

    In the tax year 2019/2020 I had a regular PAYE job and had a chance to do some additional contract work during the evenings and weekends as my wife was sick from work and we needed the extra cash. The contract insisted that I use Parasol as the umbrella company to sort my tax out which was cool with me as I'd previously been stung for the tax before as a sole trader and didn't fancy that issue again.

    So I registered with Parasol and explained to them that this was a second job and that I was already hitting the 40% threshold with my first PAYE role. They guided me through the process and said all would be good. I finished the contract some 6 months later and resigned from Parasol as it was no longer needed. Fast forward to today and I'm sorting out my personal tax return with Clearsky a sister company to Parasol as they look after my limited company.

    It turns out that Parasol had put me on a BR code for all earnings on that contract and this, so they have told me is set to 20% tax. I therefore now owe a couple of thousand is personal tax which I've not got as I'm the same as many with less earning due to COVID and the devastating effect on companies. I'm really annoyed that I was not told about this when starting the contract with Parasol, they should have alerted me of what to do when I explained to them that I already had an income over the 40% threshold. When I quizzed Parasol over this they said that HMRC should have contacted me with a tax code change seeing two lots of income tax coming in. Anyone else had a similar issue?

    #2
    I’m afraid so...

    Using an Umbrella? CHECK YOUR TAX CODE!
    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
    - Voltaire/Benjamin Franklin/Anne Frank...

    Comment


      #3
      Sounds about right for the big umbrellas I am afraid. Did the figure you were being paid not look a little bit odd?
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        Originally posted by northernladuk View Post
        Sounds about right for the big umbrellas I am afraid. Did the figure you were being paid not look a little bit odd?
        That’s for the replies. I didn’t really think about it as I’d mentioned it to them in writing and they replied with “we will take that into consideration”. Thought they had it covered ☹️

        Comment


          #5
          Originally posted by Kram View Post
          It turns out that Parasol had put me on a BR code for all earnings on that contract and this, so they have told me is set to 20% tax.
          That would be standard with a second income, they should however have suggested that is that was the case, that you contacted HMRC to adjust your tax code so that the additional tax was taken at source. Technically they have just worked off the tax code they were given, so not really their fault, but might have been nice to provide a bit of advice to you so you could address it there and then rather thna via the SA.

          Comment


            #6
            Thanks all for your comments, this is a massive learning curve. Just to add to my story I called HMRC today and they have a record of me calling halfway into the contract asking about my tax code (which I have to say I thought I had but was not sure), but as they reminded me on the call today at that specific point of my call to them halfway through the contract I was not exceeding the higher rate of tax from the PAYE info they were receiving. I guess now looking back I should have each month kept contacting them to ask if I'd reached the threshold. :-(

            Comment


              #7
              For future reference, you can always keep an eye on your predicted annualised earnings on your personal tax account online, at least then you can see what HMRC are basing your tax figures on via the tax code.

              Comment


                #8
                Originally posted by Kram View Post
                Thanks all for your comments, this is a massive learning curve. Just to add to my story I called HMRC today and they have a record of me calling halfway into the contract asking about my tax code (which I have to say I thought I had but was not sure), but as they reminded me on the call today at that specific point of my call to them halfway through the contract I was not exceeding the higher rate of tax from the PAYE info they were receiving. I guess now looking back I should have each month kept contacting them to ask if I'd reached the threshold. :-(
                And it's a shame it's come to this. I think this is the difference between the big corporate monsters and a more personalised offering from the likes of Lucy at Clarity. I suppose we've got the FCSA to thank for removing any choice most people might have had to pick the service most tailored to their needs. Great job FCSA. :
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #9
                  Originally posted by northernladuk View Post
                  And it's a shame it's come to this. I think this is the difference between the big corporate monsters and a more personalised offering from the likes of Lucy at Clarity. I suppose we've got the FCSA to thank for removing any choice most people might have had to pick the service most tailored to their needs. Great job FCSA. :
                  I don't understand this expectation that an employer should be responsible for an employee's tax affairs, or even how they can be (since they won't necessarily know about other employments).

                  What has happened here is what has happened to many people (not just IT contractors/those via Umbrellas) who have multiple employments and the second employer puts them on the BR (or D0 or D1) code. The OP here could have asked the second employer to put them on the D0 code.

                  See relevant section here:

                  Second job tax and pay - Money Advice Service
                  Last edited by Paralytic; 13 January 2021, 14:33.

                  Comment


                    #10
                    Originally posted by northernladuk View Post
                    And it's a shame it's come to this. I think this is the difference between the big corporate monsters and a more personalised offering from the likes of Lucy at Clarity. I suppose we've got the FCSA to thank for removing any choice most people might have had to pick the service most tailored to their needs. Great job FCSA. :
                    That's actually wrong - an umbrella company won't know what the main employer is paying (unless the contractor tells the agency). HMRC doesn't pass any information back it just collects it.

                    I have however added a second job calculator to the rather long list of nice to have items (and will see if I can fit it into the Key Information Document generator).
                    merely at clientco for the entertainment

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