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HMRC issue guidance on umbrella companies - some interesting reading!

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    #11
    Originally posted by eek View Post

    Provided it is clear that that it is the "assignment" rate and it's reflected within the Key Information Document there is nothing you can do about it - and I personally don't see the problem.

    The real issue here is that the agents use "Umbrella / Inside IR35 Rates" without explaining what they are. If they used a consistent phrase such as Assignment or Budget rate life would be so much easier as it would be a one off training exercise - this Assignment rate is the rate we pay the Umbrella firm from which they need to deduct their employment costs. Prior to the contract starting the umbrella firm will provide a Key Information Document that will outline where this money goes and what the actual PAYE contract rate will be.
    I don't see the difference tbh. I saw so far is the rate quoted is ALWAYs the budget rate (or the assignment rate as you call it).
    Then you have the FTC rate or sometimes called PAYE.

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      #12
      Originally posted by cwah View Post

      I don't see the difference tbh. I saw so far is the rate quoted is ALWAYs the budget rate (or the assignment rate as you call it).
      Then you have the FTC rate or sometimes called PAYE.
      The point is to remove the idea that the Employer NI is coming from money that is yours because at no time* is that part of the assignment rate yours (it's for the umbrella to use to pay their employment costs). But attached to that is the risk that were agencies were to advertise PAYE / FTC rates we know some umbrella firms would just pocket the unpaid Employer NI were money being put into a pension.

      * unless you are salary sacrificing into a pension at which point you want it heading your way rather than into the umbrellas profits
      Last edited by eek; 30 April 2021, 12:48.
      merely at clientco for the entertainment

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        #13
        I think at least finally it gives terminology of the "assignment rate" from which the employment costs are met. First time they have actually put it in writing, now its just time for everyone in the supply chain to make sure that this is all shown properly when giving illustrations!

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