Do these figures look legit?

[keeno65]

Weekly Invoice total			£1,500.00
Gross Salary Payment (5 days)			£366.25
Income Tax and NI (assuming a 1250L tax code)			£76.80
Net Salary Payment			£289.45
Paid to Network			£1,133.75
Retained for Management Co Costs & Corporation Tax			£202.51
Dividend (Based on 12 months working)			£41.66
Monthly Dividend Tax Liability			£0.00
Available Profit for Distribution			£889.58
CGT Liability (Capital Payment)			£63.96
Net			£825.62
Total Deductions			£343.27
Take Home			£1,156.73

How it works

You will become an employee of one of our Umbrella Companies. As an employee, IR35 just isn't applicable so this is something you needn't worry about.

The Umbrella Company will pay you a salary and pay all Tax and NIC's due on your behalf.

In addition to this you will become a member of the Consultancy Network you will also be eligible to receive Profit Share. There are a number of ways to receive Profit Share, all of which are fully disclosed to HMRC and are taxable.

On an invoice of £1,500.00 you would retain £1,156.73 (77.12%) in total assuming a tax code of 1250L and no other income.

Been quoted higher than 80%? To get above 80% you would need to be using a Tax Avoidance Scheme which is confirmed by HMRC

[Paralytic]

TLDR; No. Avoid.


The figures are probably legit, as per how they calculate them, and pay you, but within a few years, expect a hefty tax bill from the tax man.

Read this: https://www.contractoruk.com/forums/...-umbrella.html

Unless you're paying into a pension (or any other salary sacrifice option), or have valid expenses, expect to take home around 53% of gross day rate via an Umbrella.

To misquote that illustration:

Been quoted higher than 55%? To get above 55% you are probably using a Tax Avoidance Scheme which is not confirmed by HMRC

[ladymuck]

I don't like it because I have an inherent mistrust of any scheme that partly pays in dividend.

I bet you are truly not a shareholder in the company and won't get a share certificate (with or without voting rights) which screams evasion rather than avoidance.

[eek]

That's as dodgy as anything.

if you are inside IR35 then everything needs to be paid via PAYE except:-

Salary Sacrifice pension
Expenses paid by the end client directly
and a few other very explicit schemes (electric car lease, cycle to work).
Some umbrellas have also found a way to allow you to buy hardware before tax deduction (which is sneaky and I'm sure HMRC may become interested later).

And if you are outside IR35 you can do that all yourself and retain more than that (as you won't need to pay them their fee.

Finally it is your responsibility to pay your tax - which is the biggest reason why I hate the new IR35 approach - but this doesn't solve any problems for you and creates a whole lot more.


Actually looking at that again - why is Capital Gains Tax mentioned there?

Don't run away - sprint after naming the umbrella here so that others are prewarned.

[cojak]

Ooh, doesn't 77.1% sound plausible?

Sooo much more trustworthy than those scammy 80%ers.

2.9% makes all the difference...

[keeno65]

Yea and the link they send you to on the HMRC page magically says:

What you should check


You should check if:

• the company promises that you can keep 80, 90 or 95% of your wages and be tax compliant (this is unlikely to be true as, in most cases, the basic rate of Income Tax is 20% and National Insurance contributions are also due on earnings)

[eek]

Yea and the link they send you to on the HMRC page magically says:

What you should check


You should check if:

• the company promises that you can keep 80, 90 or 95% of your wages and be tax compliant (this is unlikely to be true as, in most cases, the basic rate of Income Tax is 20% and National Insurance contributions are also due on earnings)

What page is that - as I will raise a request for it to be corrected.

[keeno65]

What page is that - as I will raise a request for it to be corrected.

Umbrella companies offering to increase your take home pay (Spotlight 45) - GOV.UK (www.gov.uk)

[northernladuk]

OP would be better just telling us the brolly/scheme provider and we can give them a definitive answer based on that alone along with other detailed information such has how fast to drop this and how far to run away from it.

[Paralytic]

OP would be better just telling us the brolly/scheme provider and we can give them a definitive answer based on that alone along with other detailed information such has how fast to drop this and how far to run away from it.

Very fast and very far. There's no way that is a legit umbrella. I wonder if they're FCSA accredited - the OP can ask them