Temp job with Contract OR PAYE - is this odd?

Catriona

Hi, I wonder if anyone can help? I've been called by an agency I have not heard from before, based in London but for a job in North Wales. They are offering to put me forward as a temp for a 3-4 week job, and they were very keen to stress that there would be no interview (which is a bit odd though I have had agency jobs without them). I had to ask to get the rate of pay and hours, which people normally mention early on in my experience. Now I'm not saying this is necessarily fishy, but the next part I find a bit strange:

They said it was £6.00 an hour if I go PAYE, but £7.48 and hour if I go contract, ie use an an umbrella company. I had loads of problems the last time I worked using an umbrella company, so I mentioned this and they said "ah well see this time you won't have any problems, we will be your umbrella company".

I don't think this is illegal as such, it just seems really odd and I wanted to get some perspective on it if possible. Obviously I want a higher rate of pay if I can. But the last time I got an umbrella company, the employer didn't tell me that until after I had agreed to take the job, the umbrella company never saved me any tax ("save all your receipts and bus tickets and meal receipts" - what rubbish - not a penny), charged me to get my wages each week and at different times both failed to pay me, and decided they'd overpaid me once I was again unemployed and I was faced with paying back over £200 on the dole.

Now I know working contract works out well for a lot of people, I mention the above to explain why I don't just go "more money? yes please!" I'm also wary that working contract gives me no holiday pay and no sick pay. A bit of a scary prospect if you're the sole provider for yourself with no backup.

Can anyone with a bit more experience give me any advice? Thanks for reading in advance, I hope I can pick your collective brains so I can at least go into this with my eyes open

LadyMissA

stick to PAYE as you know everything thing is paid and you have no bills cropping up

scheming_gypsy

with there only being £1.48 difference in rates it'll probably be easier to stick with PAYE.

With an umbrella company you can claim up to £10 for meals and travel expenses, but these are just taken out before they calculate tax and there's only so much space they can play with. I'm guessing the difference in take home between the two will be about £20 a week or so

scheming_gypsy

LadyMissA wrote: »

stick to PAYE as you know everything thing is paid and you have no bills cropping up

that's the same with an umbrella company as you're classed as an employee of theirs

Catriona

Thank you both - my instinct has been to steer clear of umbrella companies ever since, but I had only used one that one time so I wanted to be sure. The small pay difference is, sadly, a lot to me - I am signing on so every penny counts - but it looks like "penny" would be about right when they take their cut!

scheming_gypsy

Your £1.48 an hour extra is £55.50 a week more on a 37.5 hour week, £280 compared to £225. Out of that £280 they take their cut for doing the wages (mine is £25 a week) and then empoyers NI. Both of these together won't be £55, possibly £30 which then leaves you £250 to be taxed on.
Out of that £250 they deduct your meal allowance (so say you tell them you're out of the house for 10 hours a day), of £10 a day which takes you to £200. Then they deduct your travel, so at 45p a mile if you do 20 miles a day / 100 miles a week they'll deduct £45. So at that point you're only getting taxed on £155 and part of that is your tax free allowance.

I swapped contract last week so i'll get two pay slips. For the new one i did two days; my gross payment was £242.40 and after they took their £25 out it left £217.40. £97.39 mileage (think i'd accrued some from the previous contract) and £20 expenses. I paid £8.80 in tax, no NI and came out with £226.20 for 15 hours.

So their cut is less than the additional rate you're getting and it can work out a lot better for you. As the agency has given you an option and then saying they'll be the umbrella company (is it Springboard ?), they can provide you with take home figures for both scenarios. For you, it's the same thing; you get your timesheet signed and send it to the agency / umbrella company and they do the rest... but your first step is to speak to the agency and ask for your take home figures. Tell them what expenses you'll need to claim as umbrella though or it won't be accurate (ie travel and lunches)

InsideInsurance

scheming_gypsy wrote: »

With an umbrella company you can claim up to £10 for meals and travel expenses

It is not just £10 for both. It is the actual cost of both within what HMRC considers reasonable. If you're working 9-5 and leave home at 7:30 get home 6:30 you normally would only be eligible to claim for your lunch and £10 is normally considered the cap for this.

If your daily train ticket happens to be £25 then thats what you claim.

scheming_gypsy

oops, that's what a lack of punctuation does to you.

You can claim up to £10 for lunches, and (you can claim) travel expenses.

InsideInsurance

Panda eats, shoots and leaves

scheming_gypsy

just like me on a date :whistle:

an9i77

OP did the hourly rate on PAYE include holidays or will you get your statutory minimum hols on top? I only ask because I went down the limited company route a few years ago and it did work out better for me as I was travelling a lot of miles to get to work each day, but although I got paid more per hour I didn't get a bean when I took holiday and as I'm rubbish at saving (or I was then) I found it a struggle if I wanted to take some time out, or at christmas for example. So make sure you factor in the holiday aspect.