NI contributions via umbrella company

[captain_caveman_76]

Talking to one of our agency bods this morning. He was persuaded to go self employed via umbrella company which he did.

One of the things he’s not happy about is: apparently he’s paying national insurance contributions as a company director AND as the company’s sole employee. (Effectively two lots of NI). Is this right if he’s only taking a wage as an employee?

Needless to say, he’s told them to stuff the self employed and gone back to PAYE.

[conor]

I think he is mistaking employers NI for “directors NI”.

He is paying employers NI and employees NI and this is correct for someone taking a wage out of a Ltd Company as an employee. If he had set up his own Ltd company instead of using an umbrella he could have drawn a wage low enough not to pay NI and drawn the rest as dividends or he could have benefitted from the £2000 NI credit given to small businesses.