Legality of client/umbrella passing on employers NI rise

[northernladuk]

I'm wondering if you're actually cut out to be a contractor. Your questions/comments are all around "Is it legal" and "It must be wrong", but not understanding that businesses are operating in legal ways.

It's the standard go to for some reason. If something doesn't seem right many people just assume it's illegal just because they don't understand something. We see it on here endlessly.

[mharris]

The bottom line is this, unless you're a PSC being paid inside-IR35, a fee payer situation isn't relevant.

I read through section 61N on the government website, nothing there states that the situation is any different with an umbrella involved in the chain. The implication being that the umbrella itsef takes the place of the intermediary, with the party directly above them being the fee payer. I think you're right though, this isn't particularly relevant to the discussion.

If you have a look at your employment contract, it will have some variation of you being paid NMW for all hours worked, and a discretionary bonus (which is paid at all times unless the rate is on the NMW border). That is your pay.

Thanks for pointing this out. I hadn't considered (actually had completely forgotten) that the employment contract is for minimum wage with a discretionary bonus. This is the missing piece that gives them the scope to adjust the numbers to cover their employment costs, without actually deducting from the pay I have agreed to receive.

[mharris]

It's the standard go to for some reason. If something doesn't seem right many people just assume it's illegal just because they don't understand something. We see it on here endlessly.

Actually, I think I understand things pretty well.

Don't misunderstand, I haven't come here to moan or to try and launch a complaint because I think I've been scammed. Nothing here is at all unexpected. The implications for umbrella workers were immediately obvious the moment the government announced the NI increase.

I'm simply trying to have a debate to help further my understanding and to get the opinion of others. I guess this just isn't that kind of forum..

[malvolio]

Actually, I think I understand things pretty well.

Don't misunderstand, I haven't come here to moan or to try and launch a complaint because I think I've been scammed. Nothing here is at all unexpected. The implications for umbrella workers were immediately obvious the moment the government announced the NI increase.

I'm simply trying to have a debate to help further my understanding and to get the opinion of others. I guess this just isn't that kind of forum..

It is, but the older members will tend to lean on the "why don't you know that already" response, possibly unconsciously (since many people don't know that much) and it will colour their answers. In their defence, a director has a whole set of responsibilities, one of which is understanding the underlying legislation around commerce and accounting. Hence "Is it legal" is a weak opening position for a debate; usually, as in this case, it is entirely legal. Whether or not it is desirable, mutually beneficial, commercially sensible or even moral would be a better one...

HTH