Umbrella company "Taxable Income" reported to HMRC

[Nava39]

Hi

Need clarification on how the HMRC Taxable Income is calculated when working through an umbrella company;

Say as an illustration the following figures for the tax year;

- Invoiced £100,000
- Employers NI cont £13,000
- Employees NIC £5,000
- Apprentice Levy £500
- Umbrella margin £1000


Given the above sample figures, the umbrella company has reported to the HMRC £100,000 as my taxable income.
However I would have thought my taxable income is the £100,000 minus the Employers NIC, Apprentice levy, and potentially the Margin, thus £85,500. Should this not be what I would pay income tax on?

If £100,000 is in fact my taxable income, then I will be paying 40% income tax on the Employees NIC and the Apprentice Levy already paid.


Which is correct?

[hobnob]

However I would have thought my taxable income is the £100,000 minus the Employers NIC, Apprentice levy, and potentially the Margin, thus £85,500.

Yes, that's correct. Do you have a (redacted) payslip that you can share?

[eek]

Ignoring pensions your gross pay / taxable income should be what the umbrella receives from the agency minus their fee, employer NI and apprenticeship levy.

So in your example

Invoice £100,000
Umbrella fee £1000
Employer NI £13,000
Apprenticeship levy £500

Gross pay £100,000 - £14,500 = £85,500.

[Nava39]

Thanks for confirming

[lucyclarityumbrella]

Your pay statement should have year to date figures on it - this should show what has been reported as the taxable salary which as everyone has said is the invoice value less employment costs (ErsNI, Umbrella Margin, and AL).

[WTFH]

the umbrella company has reported to the HMRC £100,000 as my taxable income.

How has that been reported? Where are you seeing that figure?

[eek]

How has that been reported? Where are you seeing that figure?

I suspect he's confused it won't have been the umbrella - agency reporting would give HMRC the £100,000 figure.

[Nava39]

My error reading the payslip. They way the umbrella payslip is designed it gave the impression that taxable income was the agency gross pay.

They are processing as you have all indicated they should