Can I have the pro’s and con’s for each please? Umbrella sounds attractive.
ATB,
Tommy.
Yes, it SOUNDS attractive.
But get some professional advice if you decide to try going that route. It’s full of potential pitfalls.
Look at the complete PAYE package, it’s worth more than you may think.
Don’t don’t don’t go the umbrella route ! As you’re charged a fee and HMRC are cracking down on them
blue estate:
Don’t don’t don’t go the umbrella route ! As you’re charged a fee and HMRC are cracking down on them
20 quid a week, I am told by the agency that this is more than covered by the gains. All the PAYE package has to offer is a lower rate and holiday entitlement.
Tommy.
What they didn’t tell you
You pay more Ni ,you are classed as self employed and ultimately responsible for paying own tax ,
Saves agency money
blue estate:
What they didn’t tell you
You pay more Ni ,you are classed as self employed and ultimately responsible for paying own tax ,
Saves agency money
No they didn’t tell me that. He said I could claim mileage and meal allowances though and yes, I am ultimately accountable for tax and NI, even though I don’t touch the deductions.
I suggest you do a search on umbrella companies on the search function on here
blue estate:
I suggest you do a search on umbrella companies on the search function on here
I haven’t decided on it yet, and I will look it up. This is the company the agency adviced me to use. azebra.co.uk/
Tommy.
Umbrella is there for one side only - the agency.
I bet the company they recommend is either owned by or an affiliate of the payroll company. So not only are you paying £20 for the privilage of someone putting your wages into a spreadsheet but they are paying the agency for sending you.
The revenue people have closed many of the loopholes re mileages and what you can now claim. Umbrella company might ignore that but its you that gets charged at the end of the year not them.
Holiday pay is worth quite a bit if you consider it over a year which you don’t get.
I also hear about plenty of cases where after you hit the tax threshold your pay drastically drops.
Ultimately the agency should offer PAYE as well as others but thats the one which pretty much guarantees you’ll get paid the right amount.
TommyTanker:
20 quid a week, I am told by the agency that this is more than covered by the gains. All the PAYE package has to offer is a lower rate and holiday entitlement.
Tommy.
And you believed them?
Holiday pay that you won’t get is worth an extra 12.7% of what you earn an hour. With an umbrella company not only do you have to pay your own NI you have to pay the employers NI, that is 13.8% of all your wages above £133 a week. So in order to break even with PAYE then you’d have to be on at least 26.5% more than on PAYE plus whatever the cost of the umbrella is. Then there’s the workplace pension which isn’t just a 1% contribution from you but 2% as you have to cover the employers as well.
If the agency paid £10/hr on PAYE you would have to be on at least £12.72 an hour just to break even before you factor in the cost of the umbrella company. An umbrella company charges £20 whether you work 8hrs in a week or work 80hrs. So if you do say one 10hr day that week they’ll still charge £20 so you’d need to be on £14.72 an hour in order to be better off than being on PAYE. If you did a 60hr week you’d need to be on £13/hr to break even with someone on £10/hr on PAYE.
TommyTanker:
No they didn’t tell me that. He said I could claim mileage and meal allowances though and yes, I am ultimately accountable for tax and NI, even though I don’t touch the deductions.
You cannot claim mileage anymore, that ended at the start of this tax year. You can only claim meal allowances as a day driver if you have an arrangement with HMRC. Even if you claimed £10 a day that would only save you £10 a week in tax which wouldn’t even go anywhere near compensating how worse off than being on PAYE you would be.
I have to agree with…
Conor. The mileage allowance has gone (which your pointy shoes agency non-entity lied about. If people have to lie to sell the deal, it’s a dead dog mate), you’ll lose holiday pay and what’s left is nothing more than a loss unless you’re getting a wheelbarrow load more on the rate.
Use the search facilty here, there’s more than enough info there to tell you not to do it.
Sound, cheerrs fellas.
my agency pay 13 ph on umbrella or 11.10 on PAYE
i was umbrella for a while but realised there was no gain. why? because i had to pay umbrella fee, employers AND employee national insurance, and also i was not getting paid holidays
so i went back to PAYE, because if im not better off why take the risk of HMRC cracking down and me having to pay it all back, and why put money in the hands of parasites anyway. it seems like a big tax dodging fiddle at the end of the day
Exactly Chris…agencies should be looked upon as your enemy where advice is given, theyre not doing it to help you out, theyre doing it to save them having to employ someone who is experienced on p.a.y.e. and having to pay them top money for their experience. I would go paye all the time ( or cash in hand ) as i am over retirement age, and dont pay N.I. anyway, but my taxes are added to my pensions, then i am rtaxed on the lot at the end of the year…which is why i work for a foreign company, and i pay jack ■■■■…win…win eh !
truckyboy:
but my taxes are added to my pensions, then i am rtaxed on the lot at the end of the year…which is why i work for a foreign company, and i pay jack [zb]…win…win eh !
So you’re not declaring your income from abroad and completing a self assessment to declare it every year? If you’re a UK resident then that’s tax evasion as in fines if you’re lucky, a day in court if you’re not.
Conor:
truckyboy:
but my taxes are added to my pensions, then i am rtaxed on the lot at the end of the year…which is why i work for a foreign company, and i pay jack [zb]…win…win eh !So you’re not declaring your income from abroad and completing a self assessment to declare it every year? If you’re a UK resident then that’s tax evasion as in fines if you’re lucky, a day in court if you’re not.
Don’t worry Conor.
Truckyboy has said on another thread that he has “Principles”, so benefitting from what this country offers without paying his fair share can’t really be happening can it?
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The ones that say that tend to be the ones with the biggest skeletons in the closet. 
TommyTanker:
Can I have the pro’s and con’s for each please? Umbrella sounds attractive.
ATB,
Tommy.
Majority of agencies use umbrella companies to pay on PAYE, so what you mean, I presume, is limited company or self-employed versus PAYE.
I’ve been on PAYE all the time - I couldn’t deal with the hassle and risk of tax returns and don’t want the expense of hiring someone to do my tax when the employer could do it. I left an agency in 2011 when they insisted everyone go self-employed in response to the Agency Worker Regs.
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TommyTanker:
I am told by the agency …