Who pays holiday? Agency or Umbrella company?

omen666

I use an offshore umbrella company in Dubai and pay them 4% of my gross invoice. Find them so much easier

Conor_3

LittleVoice wrote: »

I am surprised that this should be the case. Why should owning a company affect the ability to get a P45 as a redundant employee and sign on as unemployed?

You try claiming the dole whilst being a director and shareholder of a limited company.

LittleVoice

My question was about owning the company - that is being a shareholder. I know rather a lot of people who have received JSA who have been shareholders. I can't believe that that would have been a bar. And does the DWP ask about shareholdings in individual companies? Certainly Pasturesnew suggested that simply owning a company prevented a successful claim.

As far as being a director is concerned, that is a different situation if it is a paid position.

Zoetoes

Conor wrote: »

ROFLMAO. I love people like you two. You use umbrella companies because you "can save money on your tax and NI" without fully understanding the ramifications. You then go blindly in without bothering to read up and pay your £20 a week without even knowing what you get for it.

What you get is NOTHING. You are paying £20 a week for them to send an invoice to the agency once a week for your wages and to do the tax paperwork WHICH YOU COULD DO YOURSELF. Even worse, because they don't tell you what expenses you can claim, YOU END UP WORSE OFF BY THOUSANDS THAN IF YOU DID IT YOURSELF.

You're not going to get holiday pay from the agency because you're not employed by the agency, your umbrella company is and it is them you need to get it from..
YES you are entitled to holiday pay from your umbrella company but good luck in getting it. The ones that actually pay it out are very few and far between.

The best part is that everyone is screwing you. The agency pay and extra £1 or £2 an hour to those using an umbrella company. It works out great for them because they save far more in the Employers NI and holiday pay they don't have to fork out. The Umbrella Company makes £20 a week out of you for doing about 5 minutes work.

Money for old rope as it's known.

My brother uses an umbrella company but unlike you two he knows how to get the best out of it. He is able to submit £100's a week in travel and subsistence expenses and things like his phone which he would not be able to claim as an employee on PAYE for the agency. This saves him about £4000 a year on his tax bill as he is in the 40% bracket and these expenses reduce it to below that and also reduce his tax bill.

At least one of 'us two' also claims expenses, where does it say I don't?

Also, I didn't go for this job so I 'can save money on Tax and NI', I went for it because it's a good hourly rate, it's up the road from me, it's NHS experience, it's IT experience, and while it's not permanent, it is long term so is good enough until I find a permanent job that I want.

PayMatters

Because you are employed by your Umbrella Company they have a statutory requirement to pay you holiday pay.

How it works however is that instead of paying you while on holiday they pay you an 'additional wage' of 10.17% over your gross pay (12.07% from April 2009) i.e. in every payment you receive part of it is described as holiday pay.

Because the Umbrella Company does not want to make a loss however this amount that you are paid is then deducted in calculating the "profit" on your contract. (An Umbrella Company pays you the statutory minimum wage for the hours you've worked plus the profit on your contract). It basically means you get paid what you would have without the holiday pay but it's the way that it's displayed on your payslip that is important in order for the Umbrella Company to meet statutory requirements.

Some Umbrella Companies hold back part of your wage in order to be able to pay you holiday pay but the net effect is the same.

Mike
PayMatters LLP

grumpyoleteacher

I'm really glad I read this thread and it has made me relaise and se why its not worth the hasle of getting reciepts etc for an extra £33 a week, paying them £25 a week - having no holiday pay and no Employers National Insurance paid. Basically it sucks.

Thanks to the experts, who made me see sense.