help umbrella contracts!!!!!!!!!!!!

paddyrg

Check back with the employer, it may well be that they will only enter into the contract with a ltd company, this is very common, and would make the decision for you re being self employed or through umbrella

julie8314dave

Thanks for all your replies, still a bit stuck as to what to do now, does anyone have any recomendations for a good one with a fixed fee only.

Many thanks.

If my husband is only working for the full 6 months contract will he get tax releif on this job as he will only be earning £7,488.00.

InsideInsurance

Is it certainly a maximum of 6 months? I've been contracting too long and never had a contract more than 3 months at a time but never not been offered a renewal - it has always been my choice to leave a client. The thing with contracting is as your not an employee they need to give no reason for dismissing you no matter how long you have been there and so any contract is only as long as your notice period - the only advantage of longer contracts is it comes up in the managers mind less often of if your still providing value for money.

I and those around me are fortunately working at a different pay level and so the difference of £25 a month doesnt make the greatest of differences after you net off the tax etc and so people are generally more concerned about how quickly they get paid rather than the fee... some you submit your timesheet monday and youll have been paid by monday evening others you timesheet on monday and youll be paid 26 days later (later still if it hits a weekend)

julie8314dave

Thanks for all your replies, still a bit stuck as to what to do now, does anyone have any recomendations for a good one with a fixed fee only.

Many thanks.

If my husband is only working for the full 6 months contract will he get tax releif on this job as he will only be earning £7,488.00.

julie8314dave

thanks, but that still does not answer my question of how much tax etc that he should be paying, it is def 6 months contract as the man showing him the ropes was contracted nearly 6 months ago and has been told that he has to go even though he was one of the best people to have on board.

scheming_gypsy

he'll pay tax at the standard rate as if he's employed... which he will be - by the umbrella company. He doesn't have to do anything else except sign up with the umbrella company, send off his time sheets and then get paid. He won't be self employed so he won't have to do a tax return at the end of the year; so his tax will be worked out the same as usual depending on his tax code.

but although his contract is just for 6 months it doesn't mean that he isn't going to work for the rest of the year. So (if i remember correctly), if he's on a standard tax code of 747L his first £622 a month will be tax free... but either way, your figures further up show that he'll take home £960 a month.

terra_ferma

When I do agency work I normally have a choice to be employed directly or through an umbrella company.
The umbrella route is MUCH more expensive because you will be paying employer's NI, on top of the employee's bit.
In my area of work agencies always offer higher rates to staff if they go through an umbrella, but the difference would have to be substantial to make it worth it (easily around 10%).
I can't remember the calculations, I did it a while back, but even taking out all the expenses you can deduct with an umbrella company, it's not worth the hassle.

you also have to fill in an expenses form and submit receipts (for example petrol, stationary, professional fees)

Don't know if all this will apply to your husband, but this is my experience.

PS What I expect will be happening (unless the arrangements are different, but this is what's common practice): the council will have a contract with the agency and will be paying your husband's wages + commission to them, and they will pay your husband either via an umbrella, directly as Paye, or as ltd.
Some agencies get commission from the umbrella company and may be reluctant to have your husband on their books, as it costs them money to do the payroll as well.

scheming_gypsy

terra_ferma wrote: »

The umbrella route is MUCH more expensive because you will be paying employer's NI, on top of the employee's bit.

it isn't 'much' more expensive as you get a higher rate to compensate it; and you also get the tax benefits on meals etc.

the OP has already highlighted the difference in wages

Net Payment 876.90 (PAYE)
Net Payment (Umbrella) 959.56
Contractor Increase 82.66 vs. PAYE

terra_ferma

scheming_gypsy wrote: »

it isn't 'much' more expensive as you get a higher rate to compensate it; and you also get the tax benefits on meals etc.

the OP has already highlighted the difference in wages

Net Payment 876.90 (PAYE)
Net Payment (Umbrella) 959.56
Contractor Increase 82.66 vs. PAYE

I missed the last bit, however umbrella's quotes are normally based on the assumption that you are able to claim the full amount of expenses, which unless you have proof of actually spending the amount claimed it's tax fraud.

For example unless you are certain you will spend the amount allocated for meals (and have receipts to prove it), either you claim expenses that you did not incur, thus committing tax fraud, or you get less than what they quoted to you.

I found this a good explanation:
http://www.gabem.com/information/claim-expenses.php

Meals: If you are at work for over 5 hours you will be able to claim for up to £7.50 of receipted meals, if you are at work for over 10 hours you will be able to claim up to £15 of meals, again to be backed up by receipts. All the receipts you send in must show individual items so we can total up the food you have bought.
You will only receive the amount you have spent, so if you were at work for over 5 hours and spent £3.50 on lunch, you would only receive £3.50 not £7.50.

scheming_gypsy

it depends to be honest; i use My Max and they have a calculator on their homepage. Currently i'm on:
hourly rate - £14.07
hours - 37.5
mileage - 400
meals - £10 a day claim
other - £12 a week parking.

Using their calculator, if i was PAYE i'd be taking home £344.44 but with them £451.11 whereas in reality i'm taking home £452.77. So there's over £100 a week difference BUT if i was PAYE i wouldn't be on the £14.07 an hour, probably around £13 or less, so at £13 PAYE would drop by £20 a week.

Using the OP's rates of £7.81 an hour on a 40 hour week, there's only a difference in £6 a week take home with no expenses (except meals which i can't change), but again if it was PAYE the hourly rate would probably be lower... On lower rates there isn't a massive difference but the general rule is that you'll take more home.