I’m now on PAYE btw - just asking this out of curiousity, and the fact I was speaking to someone who’s using a different Umbrella company than I was and (they say) are taking home way more than I was getting, he’s claiming only 20-30 pounds in deductions from a 490 top line. When I was on Umbrella it was more like 70-80 in deductions from that sort of wage.
looking at an old payslip…their fee, tax and NI I understand but I see there is also ‘HMRC Payment NIERS’ which I believe is what the company pay when you’re PAYE but you end up paying it yourself when you’re on (some?) umbrella companies
do all Umbrella companies work in this way - making you pay their NI contribution?
admittedly I didn’t pay enough attention to these things and no doubt signed the contract saying I agreed to let them make me pay for something they should be paying! but…
what I’m wondering is… was I getting shafted by this particular Umbrella company more than usual?
If you’re self-employed, you pay your employers NI. If you’re PAYE you do not.
This, is what reveals PAYE to in fact be what I call “Pseudo-PAYE” in that they are pretending you are employed thus, but you are in fact a self-employed contractor for them.
If you’re not getting contractor rates therefore, I’d seriously suggest finding another firm to work for that plays it straight.
Pseudo-PAYE workers are the ones likely to get “surprise tax demands” - especially if the firm deducts your tax & NI - and doesn’t hand it over to HMRC straight away!
so every Umbrella company Nova, DriverHire Umbrella etc means you are technically self employed?
so every week they would take however much tax + NI was due after the expenses were taken off, plus their admin fee, plus the NIERS payment?
as i say, I used to be through an umbrella company but have changed to normal PAYE now
because of the admin fee and the NIERS payment, even being paid an extra pound an hour I wasn’t much better off on the umbrella company, plus I get holidays now too (haven’t worked it out exactly) but that probably equals it out
Holidays accrue via PAYE at 12.07% of taxable pay.
Roughy, that means you earn a 5 day holiday for every 8 weeks worked. Over a year, that’s over 6 weeks holiday, but that includes all the public holidays already of course.
I dunno about sickpay, since one doesn’t really go sick on agency - you just take some time off at short notice.
Would I get any wages if I were in hospital for example? - Can’t say until it happens, and I claim it. It might well involve being paid SSP and drawing off some holiday pot money for all I know.
If you’re self-employed, you don’t get holiday pay, sick pay, and quite frankly the extra £1 per hour doesn’t even cover these two things, let alone all the commissions, fees, and bullcrap they saddle you up with to get their taxbill down rather than yours for employing you improperly, and borderline crookedly.
NIERS is Employers NI contribution, the one made by an employer which you don’t see on your wageslip, and is currently about 11% of everything above £132 a week. What that means for you using an umbrella company is that what with income tax, employee NI and employers NI, everything from £132 to £153 a week is “taxed” at 11,%, from £153 to about £200 at 23% and everything above £200 a week is “taxed” at an effective rate of 43%, 11% more than someone not using an umbrella company would be paying. You also have to factor in the “tax” of the scheme fees which if you earn £200 a week and pay £20 to the umbrella company is like another 10%.
so every Umbrella company Nova, DriverHire Umbrella etc means you are technically self employed?
No you are an employee, just one of your own company. Therefore anything you’d normally be entitled to as an employee you claim from your own company, i.e you.
so someone claiming to have 440 take home on a 460 top line is talking ■■■■■■■■ then! his admin fee is prob more than 20 quid
it’s just that he was using a different umbrella company than I was, so thought maybe other umbrella companies managed to avoid you having to pay anything other than their admin fee, but I can see this is not the case!
There is no way he can do it even in the most tax efficient way possible writing a load off against expenses, paying himself below the lower threshold for employer NI and drawing the rest as a dividend.
Conor:
NIERS is Employers NI contribution, the one made by an employer which you don’t see on your wageslip, and is currently about 11% of everything above £132 a week. What that means for you using an umbrella company is that what with income tax, employee NI and employers NI, everything from £132 to £153 a week is “taxed” at 11,%, from £153 to about £200 at 23% and everything above £200 a week is “taxed” at an effective rate of 43%, 11% more than someone not using an umbrella company would be paying. You also have to factor in the “tax” of the scheme fees which if you earn £200 a week and pay £20 to the umbrella company is like another 10%.
so every Umbrella company Nova, DriverHire Umbrella etc means you are technically self employed?
No you are an employee, just one of your own company. Therefore anything you’d normally be entitled to as an employee you claim from your own company, i.e you.
…but not the umbrella fee itself, nor the losses incured when the “agent giving you shifts” ■■■■■■ you about, wasting you time and money - because you’re employed by them in every sense except the money and power to choose when and when not to work.
If you’re going to be a limited company, get your own client base, and do your own accounts.
Winseer:
If you’re going to be a limited company, get your own client base, and do your own accounts.
problem with that is having the proper insurance. I’ve not had a quote but to have insurance to drive any HGV for business purposes , public liability and drivers negligence insurance (which is what I think agencies have) must be pretty expensive
Winseer:
If you’re going to be a limited company, get your own client base, and do your own accounts.
problem with that is having the proper insurance. I’ve not had a quote but to have insurance to drive any HGV for business purposes , public liability and drivers negligence insurance (which is what I think agencies have) must be pretty expensive
I never once needed it as I was always covered by my customers insurance. As for driver negligence insurance, no such thing exists. I had half a dozen commercial insurance companies trying to find such a policy and none of them could saying the only way you could do it was insure the vehicle fully comp yourself.
Winseer, is health insurance worth getting for if you do get seriously ill/have an accident/can’t work for some reason? I’ve not priced anything up, have you ever looked into it?
MikeDBristol:
Winseer, is health insurance worth getting for if you do get seriously ill/have an accident/can’t work for some reason? I’ve not priced anything up, have you ever looked into it?
I got a quote once from Eagle (2002), and they wanted £147 a month, and I had to pay for my own medical to be done to activate that quote as well.
This was without even an element of “Earnings Protection” involved. I declined.
I eventually took out a differernt insurance - just the “earnings protection” because my whole family would benefit, but lapsed it after some years when I found out that you don’t get any payout for being hospitalised - until day SIX. I didn’t find this out until I tried to claim for the mrs’ hospital stay when she was discharged on day 4.
Even having your appendix out these days will see you discharged in 5, so it was yet another insurance scam - not actually designed to pay out on anything realistically likely to occur at all.
…And I fell for it for the years I’d previously subscribed to it…
Of all the insurances one can get - I’d only recommend “Personal Liability” providing it comes with no excess whatsoever. This is important, because if you have any excess whatsoever - every bump and knock you might give something at work - comes straight out of your invoice!
Don’t do “excess”… Insist upon a competetive quote that does not involve it from the start.
Winseer:
Of all the insurances one can get - I’d only recommend “Personal Liability” providing it comes with no excess whatsoever. This is important, because if you have any excess whatsoever - every bump and knock you might give something at work - comes straight out of your invoice!
Don’t do “excess”… Insist upon a competetive quote that does not involve it from the start.
I’v asked the question what insurance would you need as a ltd before & got this reply
YorkshireJeff wrote:“What type of Insurance would a LTD company need when dealing direct to customers ie not through a agency, for things like damage to cargo whilst in your care.”
Reply.from Conor
“None. You have a contract with the client and in it a clause that states that your company is not liable for any costs or losses arising from any actions from its employees or representatives and also another stating that their insurance must cover you which for virtually every haulier it will as policies for vehicles are usually “any employee or anyone acting on the orders of the policyholder” any driver kind of cover.”
Personal liability insurance achieves a buffer barrier between superfluous claims that might be made against you as a ltd company - if the client firm thinks they’ve “seen you coming”.
Imagine if you’ve got a client firm manager with an MP mentality - they’ll try and claim the cost of things like blown bulbs, fuel for going “off route”, or even late delivery (you got stuck in traffic!) when there’s any loopholes in someone’s insurance cover. By having a policy with “no excess” - your insurer will fight tooth and nail from the first pound of claim against their policy (your policy!) wheras with an excess in place, they’ll just recommend you cough up the “few quid involved” and stop making a fuss.
It wasn’t always like this - it’s true. In these days of fluid, and racing to the bottom contracts however, I see it as a sensible precaution. There’s not much need for other policies, since “personal liability” pretty much covers you for the things most likely to happen at some point, and sets a barrier as well, deterring “try it on” claims against the Ltd Company.
If, you can get the client firm to sign any kind of indemnity waiver - then go for it. I personally don’t give that much weight, because I refuse to sign those pushed at me, them clearly thinking I’m born yesterday, when in fact I’m just in experienced in paper-pushing diplomacy.
The Ltd company’s contract of “limited Liability” will protect you from the other stuff, and thus imho - there’s no need for any other kind of insurances. Many companies set up shop with both types of insurance in place from the outset - the general Ltd Company one and the individual’s Personal Liability one.
Winseer:
Personal liability insurance achieves a buffer barrier between superfluous claims that might be made against you as a ltd company - if the client firm thinks they’ve “seen you coming”.
Imagine if you’ve got a client firm manager with an MP mentality - they’ll try and claim the cost of things like blown bulbs, fuel for going “off route”, or even late delivery (you got stuck in traffic!) when there’s any loopholes in someone’s insurance cover. By having a policy with “no excess” - your insurer will fight tooth and nail from the first pound of claim against their policy (your policy!) wheras with an excess in place, they’ll just recommend you cough up the “few quid involved” and stop making a fuss.
It wasn’t always like this - it’s true. In these days of fluid, and racing to the bottom contracts however, I see it as a sensible precaution. There’s not much need for other policies, since “personal liability” pretty much covers you for the things most likely to happen at some point, and sets a barrier as well, deterring “try it on” claims against the Ltd Company.
If, you can get the client firm to sign any kind of indemnity waiver - then go for it. I personally don’t give that much weight, because I refuse to sign those pushed at me, them clearly thinking I’m born yesterday, when in fact I’m just in experienced in paper-pushing diplomacy.
The Ltd company’s contract of “limited Liability” will protect you from the other stuff, and thus imho - there’s no need for any other kind of insurances. Many companies set up shop with both types of insurance in place from the outset - the general Ltd Company one and the individual’s Personal Liability one.
Thanks Winseer for your reply very much appreciated, so basically go with personal liability insurance job done.
YorkshireJeff:
“None. You have a contract with the client and in it a clause that states that your company is not liable for any costs or losses arising from any actions from its employees or representatives and also another stating that their insurance must cover you which for virtually every haulier it will as policies for vehicles are usually “any employee or anyone acting on the orders of the policyholder” any driver kind of cover.”
So would you require both or one or the other.
You don’t require goods in transit insurance or insurance for the lorry you drive - that is the responsibility of your client to sort out as you’ll have stated in the terms of business you get them to sign. Companies that use agency/temp drivers all have their own GIT insurance and insurance to cover any driver.
Public liability is another matter and covers you for things like leaving your bag on the floor and some muppet tripping over it. Public liability costs very little. It doesn’t cover damage to vehicles or loads.
MikeDBristol:
Winseer, is health insurance worth getting for if you do get seriously ill/have an accident/can’t work for some reason? I’ve not priced anything up, have you ever looked into it?
I used to have full private health paid for but then I turned contractor. I took up my own policy and it was very expensive. I had to use it and the next years premium would have been crippling so I cancelled. I totalled it up and it would’ve been cheaper to pay privately myself than pay for a years insurance. I now put money aside each week towards my own private fund. The insurance wouldn’t have covered heavy surgical ops anyway. Private healthcare is only good until you claim and then it’s goes ballistic like any insurance. The best is cover with an employer. I used it extensively after smashing a bone up with last company and it was fantastic (full AXA PPP paid for). I vowed I’d never use NHS again unless financially forced. I prefer to pay myself even as a contractor.
MikeDBristol:
Winseer, is health insurance worth getting for if you do get seriously ill/have an accident/can’t work for some reason? I’ve not priced anything up, have you ever looked into it?
I used to have full private health paid for but then I turned contractor. I took up my own policy and it was very expensive. I had to use it and the next years premium would have been crippling so I cancelled. I totalled it up and it would’ve been cheaper to pay privately myself than pay for a years insurance. I now put money aside each week towards my own private fund. The insurance wouldn’t have covered heavy surgical ops anyway. Private healthcare is only good until you claim and then it’s goes ballistic like any insurance. The best is cover with an employer. I used it extensively after smashing a bone up with last company and it was fantastic (full AXA PPP paid for). I vowed I’d never use NHS again unless financially forced. I prefer to pay myself even as a contractor.
Thanks Winseer and Freight Dog. I’m a bit confused here, you’re a contractor on who’s insurance? How does that come about?
