just reading a topic on the pro forum, and got a bit confused about your employment status working for agencies. (my own fault for reading the pro forum!)
are you classed as self employed? or will the agency sort your tax and Ni out?
if so what happens if you sign up to 2 or 3 agencies? am i going to be paying more tax/NI?
Does this mean i have to be selective with my agency’s, as i was going to sign up to as many as possible!
any advice or previous experiance of this would be greatly appreciated as i’m pretty close to visiting said agencies!!
I found this - Alert have an agency, sorry, recruitment section…
instructorone:
As you know, we work with the J.S.A Group who act as your accountants.
If you work say, as an example, 50 hrs at £10.00 ph, that gets broken down. It works as: 50 @ £10.00ph = £500.00, they take 50 x £5.52 for national minimum wage which = £276 , that is tax deductable. The other £224 is offset against your tax with fuel for travelling to work, £25 a night late working (Night Out) or £15.00 for being out your home for 10 hrs or more, and £7.50 for meal allowance. £3 for using your office as a work place, Receitable expenses I.E hotels, and 6% of your wages, capped at £30.00 for their charges. One driver did, but its NOT a quote, 1x 12 hrs, 1 x 13.00 hrs, 2 x 13.25 hrs, 1 x 12.50 hrs, and 8 hrs for running in on Saturday. With the nights out that we pay him, (Separate from the £25 that is offset against his tax) his top line was just above £828.00 and he took home just over £692.00. however, JSA had made a mistake and charged him £18.50 tax on his nights out, so they owed him that back which would of taken his take home to just over £710.00, so Aranger, i believe you wont be dissappointed with your wages.
I started a topic yesterday on the Pro forum entitled “Umbrella Companies and Agencies etc” which might be the topic you were reading. Either way it is related to your question.
I was hoping someone with the professional knowledge might get back with some up to date answers as I work for 2 agencies and after nearly 3 years am not sure that everything is above board and that I’m not paying too much or too little tax and national insurance. It is a minefield out there and you get 10 different answers from 10 different people that you ask. Even the agencies give different answers to each other on some subjects.
I really want to try and get both my agencies paying through the same umbrella company so that I only pay one lot of tax and NI each week but not sure if this is possible all onto the one payslip, but I know that I would be able to offset more against tax and all for the one weekly fee of 6% which I am hoping is capped at an upper limit. It’s only the 3rd week since that agency went over to paying through the umbrella company and I’ve only done 1 day a week since, so I will find out on Friday when they pay me for the 3 days worked last week.
yeah that’s the exact post!
confused the life out of me!!
all my working life i’ve been salaried and commissioned and knew what i had to do to earn a decent wage and roughly what tax i paid.
Now i’ve jumped into the murky world of hourly rates and agencies, i sort of need to be a bit wise to it and have some understanding of taxes.
i think like you an expert who could give a definitive answer would be held up as a hero.
in your opinion am i better off sticking with 2 or 3 and making it as simple as possible?
The first rule is that to earn money you need to have work, therefore register with as many agencies as you like. There are many threads advising you not to rely on just one agency.
After that you need to think about how you want to structure your payments to get what you want.
I do a lot of work with agency drivers and the overview of choices is this:
Agencies PAYE - simple as you get paid after the agency does your tax & NI deductions. confusion can happen when several agencies in the pot as each one is classed as a separate employment and you can only use your tax code with one at any time.
Umbrella companies - use the PAYE principle but add in expenses to give tax relief. All the agencies pay to the one umbrella and therefore you only have one employer (the umbrella). Problem many people is that you are at the mercy of the umbrella and 1 forgotten form can lead to big tax bills. Also government is now attaching these schemes so don’t expect to see them around after this year.
Limited or Self employed - you set yourself up as a ltd co or sole trader and receive the money directly from the agencies and then sort out the tax with an accountant (this is not as hard or expensive as it sounds). The biggest problem is that some agencies will not pay other than PAYE which can restrict your choice of agents.
Be happy to offer professional opinion if you want, pm me if you’d like to chat.
Whilst ‘self-employed’ through an umbrella company has some attractions, it comes with a cost, which I will let others expound upon.
Working for a number of agencies, or with multiple agencies and casual for one or two firms, will mean that your Tax records go completely out of kilter.
The best thing to do, I would suggest, is that when you have established a ‘primary’ source of income, is to inform HMRC of the fact, and also inform the income source of your Tax coding.
HMRC are effectively Tax Collectors. They don’t care where the money comes from as long as they get it. I’ve always found them very reasonable. By the very nature of ‘multiple’ income streams, there will be a variance at the end of each year but by working with them, they will often seek to recoup that difference over a period of years, as opposed to months, or days.
Whenever you sign up with a new agency you are always given a tax form to fill in on which it asks you “Do you have another job?”. Even if you tick yes to this the Tax office always sends you back the same personal tax code - not the BR one. Any idea why this is? Do I have to inform the tax office again? Why arn’t they getting it right the first time if they know I have a second job?
JeffA your other existing job means you wouldn’t have a P45 so the agency normally give you a P46 to fill in which asks -
Your present circumstances
Read all the following statements carefully and enter ‘X’
in the one box that applies to you.
A — This is my first job since last 6 April and I have not been receiving taxable Jobseeker’s Allowance or taxable Incapacity Benefit or a state or occupational pension.
OR
B — This is now my only job, but since last 6 April I have had another job, or have received taxable Jobseeker’s Allowance or Incapacity Benefit. I do not receive a state or occupational pension.
OR
C — I have another job or receive a state or occupational pension.
When you tick “C” they should look up your tax records, identify your other source of income and then issue the appropriate tax code.
JeffA wrote:
Why arn’t they getting it right the first time if they know I have a second job?
It might be because you have something in your tax history that has affected the coding i.e. if your tax code has a K in it then you owe HMRC tax from a previous tax year.
Failing that its just another bureaucratic c**k up
Thanks Lonners. Must admit I’m quite sick at the prospect of having to inform them again that they should be taking more money off me. I’m only working part-time as it is - if I only do 2 or 3 days a week and then they stick the shoe in at the BR rate I’m going to be paying the mill owner for permission to go to work before too long.
paying the mill owner for permission to go to work before too long.
Join the club
The little bit good news is the extra £600 tax free that kicks in from 7th Sept. Alistair Darling did not make himself popular by scrapping the 10% tax rate so this is their response to the media and public backlash.
Takes your annual tax free allowance to £6035 and cuts your tax bill by £120.
Anyone paid by PAYE and not in the higher rate tax bracket should see £4 more a week.
So I can afford an extra pint a week…as long as I don’t drive to the local
I’ve always found them very reasonable. By the very nature of ‘multiple’ income streams, there will be a variance at the end of each year but by working with them, they will often seek to recoup that difference over a period of years, as opposed to months, or days. 
