My agency contacted me and said that the company that I am working for will now only pay on a PAYE basis and due to this I had to sign up to a new payment processing company, however the company I signed up with states that it IS an ‘Umbrella Company’ but I am going to be on PAYE with them 
Although it means a £1 per hour reduction in pay rates across the board my initial reaction to the prospect of going onto PAYE was to be pleased, I originally signed up to the ‘Umbrella’ scheme when I was new to the job and in hindsight perhaps hastily; at the time I had a heck of a lot going off simultaneously getting to grips with redundancy, facing up to a different future and training up for a new career and was probably too trusting and too easily influenced by other peoples suggestions, I belatedly read more into these ‘Umbrella’ schemes and the more I read about them the more uneasy I felt about it, however I am just as confused about this new PAYE via Umbrella set up - is this the standard way that PAYE is done?
It’s a very complicated scheme, it’s also been a while since I’ve been on it but I’ll try and explain how it was for me.
You generally get paid more. Well you get taxed less as the ‘company’ you work for are usually based in Jersey/Guernsey.
For me my holiday pay was incorporated into my wage so again I was getting paid more but lost out on holiday pay. It’s very easy to claim on expenses such as a food and travel reducing your tax even more.
That’s it really, for me at least. Personally I didn’t like it because it seemed dodgy and my tax always seemed really low and was concerned I would get a phone call from HMRC.
It’s just a way for agencies to get more money out of you.
That being said if you claim on all reasonable expenses as tax deductible you should take home more money.
But who pays you the agency or the company your working for? Seems like a fiddle by the agency to get money off you for doing nothing.
Just got my first pay slip and it does show as PAYE, the travel allowance was paid tax free at 0.45 per mile which I think I am entitled to claim? Can I also legally claim for workwear?
Am I working within the rules?
It’s a big con on words .
I don’t get how you can be PAYE but self employed ,
Except that your PAYE by your own company in which case the agency is yet again a broker.
Really if the company thought about it they’d be better taking you on as a Self employed worker they could save £££ as they pay the agency say £18 ph to enable them to take their cut before you get paid. These schemes should be outlawed,
Someone somewhere is getting loaded and you can be sure it ain’t the driver
It’s a PSC. (Personal Contract Service) I am on it through Nova. You can put £10 per day receipts for food through, and you can claim .45p per mile for mileage to work and back.
So basically if you claim let’s say 100 miles per week, you get £45.00 of your wages free from tax, which is £9 in your pocket.
If you like eating and put £50 a week food receipts through, that’s another £10 you are better off.
But the umbrella company will charge you around £30 per week to do your books, so you are £11 per week down.
However, tools, PPE, workwear including boots, glass cleaner, wipes, SAT NAV, truckers atlas, height measuring stick, etc,etc, can also be put through as legitimate expenses too. You will break even over the year, and if you do quite a bit of mileage, you will be better off.
Umbrella company and/or agency do well out of it. (Bear in mind you will NOT get holiday pay though!)
eagerbeaver:
… (Bear in mind you will NOT get holiday pay though!)
I do get holiday pay because it’s a PAYE scheme.
So it’s all above board and legit then? No nasty tax bills pending?
If it is a PSC Micky, you are effectively self employed mate. So wave goodbye to holiday pay. You will have to check with your payment processing company to check EXACTLY which scheme you are on.
You shouldn’t get any tax nasties because as you say, you are PAYE. HMRC had a good look at NOVA recently and gave them a couple of nudges regarding ensuring claimants provide receipts, but other than that, HMRC are satisfied that things are above board.
How many miles a week will you be travelling to work and back Mick?
eagerbeaver:
How many miles a week will you be travelling to work and back Mick?
The place I am currently working at is around 30 miles away but it’s a straight run on main roads so time wise it’s not bad - less than 30 mins if I don’t dawdle.
Not sure what scheme I am on but I do get holiday pay.
The maximum charge for their fees is £15.
So for 5 shifts it’s 150 miles.
£67.50 (150 x .45p) So £13.50 tax benefit.
eagerbeaver:
So for 5 shifts it’s 150 miles.
£67.50 (150 x .45p) So £13.50 tax benefit.
This x2 - 30 miles each way 
Happy days then mate. The £27 will more than pay the fee’s.
eagerbeaver:
…(Bear in mind you will NOT get holiday pay though!)
Scrub what I said earlier I have just had a second look at the pay slip and you are spot on, the holiday pay has been added to my weekly pay! 
MickyB666:
My agency contacted me and said that the company that I am working for will now only pay on a PAYE basis and due to this I had to sign up to a new payment processing company, however the company I signed up with states that it IS an ‘Umbrella Company’ but I am going to be on PAYE with them
What does the credit source name show as on your bank statement? Does it show “BACS ABC RECRUITMENT” or “BACS MAXIPAY” (or similar) ? That will tell you whether you’re on genuine PAYE from the agency or whether they’re fleecing you through a brolly co. If it’s through a brolly co and I suspect from what you’ve said then I’d strongly suggest you do your own research into them in and potential future implications should HMRC show an interest.
Micky you say they are paying you £1 per hour less or £50 on a 50 hour week, but how much is the umbrella charging you
MickyB666:
eagerbeaver:
…(Bear in mind you will NOT get holiday pay though!)Scrub what I said earlier I have just had a second look at the pay slip and you are spot on, the holiday pay has been added to my weekly pay!
OK double scrub that 
The payment I received for accrued holidays must have been in addition to my hourly rate because on the wage slip under the title of ‘Deductions from Receipts’ I have ‘Holiday Pay Accrued (retained by us to pay you when you take holiday).’
mac12:
Micky you say they are paying you £1 per hour less or £50 on a 50 hour week, but how much is the umbrella charging you
The stated rate is £1 per hour less than what I was getting previously but by the looks of it the hourly rate does not include holiday pay which is also added along with an employers NI payment (this puzzles me as to why) so I might actually be getting more than I was previously - still in the process of crunching the numbers because as you have probably gathered from my general confusion I am still trying to get my head around it all.
I am charged a maximum fee of £15 for services relating to the expenses claim, this is the only fee payable.
Don’t they make things hard for you just to get more for themselves. Tell them to put you just on PAYE you can claim all Beavers expenses yourself. If your on £10 per hour on 50 hour week you get £2600 just for holiday pay there making you pay your own then charging you £15 a week to do it.
Maybe best to run before they have you in chains
Comparing wage slips I seem to have come out with slightly more than previous and from what I can see despite the rate drop I am earning more than I was previously so although I still can’t get my head around the figures I’ll just be happy with it for now and hopefully it will become clearer once I have received some more wage slips.
Its a scam just go ltd on your own if your going paye the agency should be paying your tax and ni and holidays
I would agree that LTD is a better way to go. As the other lads have said Micky, you can simply claim these legitimate expenses yourself.
All you need really is an accountant to do your tax returns and/or VAT etc. But if you are competent to do the figures yourself, there is nothing stopping you.
As for you mentioning getting £1 per hour less, in my experience, again the other lads are correct. You usually get an extra £1 p/h to make up for not getting holiday pay and to sort out the NI. My agency would not do straight PAYE, so I had to choose either a PSC, or go self employed/LTD Company. With the info so far supplied, it is difficult to know exactly what scheme you are on.
I chose the PSC because I am paying my tax each week PAYE as a director of a company, so I shouldn’t end up with any unexpected large tax bills at the end of the financial year. Having said that, if your monies are calculated accurately, there should be no problem either.