Temp agency keen for me to sign up for expenses reclaim

87cmjc

Temp Agency was really keen for me to sign up for their expenses reclaim service when I registered with them today. I told them I would think about it as I thought it sounded a bit dodgy especially when they claimed "there's nothing in it for us" "we're not making any money out of this" "we're doing this to help you guys", etc.

They said it will have no effect on my holiday pay entitlement or basic NI contribution levels or earnings for NMW. I would pay a weekly subscription fee of 20% of my weekly expenses claim to their payroll service "partner".

From what I can tell I'd be about £5 better off per week, if that. I explained to them that I would be cycling to work and bringing food from home but they said it didn't matter and that I should still sign up. This can't be legal can it?

scheming_gypsy

It's not illegal, it sounds as though they're doing it as an umbrella rather than PAYE.
You can claim mileage and also lunches which they deduct before deducting tax, so you pay lower tax and NI as your 'wage' is lower.

anamenottaken

87cmjc wrote: »

Temp Agency was really keen for me to sign up for their expenses reclaim service when I registered with them today. I told them I would think about it as I thought it sounded a bit dodgy especially when they claimed (1) "there's nothing in it for us" "we're not making any money out of this" "we're doing this to help you guys", etc.

They said it will have no effect on my holiday pay (2) entitlement or (3) basic NI contribution levels or earnings for (4) NMW. I would pay a weekly subscription fee of 20% of my weekly expenses claim to their payroll service "partner" (5).

From what I can tell I'd be about £5 better off per week, if that. I explained to them that I would be (6) cycling to work and (7) bringing food from home but they said it didn't matter and that I should still sign up. This can't be legal can it?

Get written details of the scheme.

(1) Of course, there is something in it for them. For a start they don't pay employers NI on the "expenses" you receive so that's one saving for them.

(2) It almost certainly would affect your holiday PAY but not the amount of time you would be due for holiday. The amount of holiday time entitlement would be based on your worked hours but the amount of your pay would almost certainly be based on the actual pay (less expenses).

(3) If you are earning a reasonable hourly rate and working a reasonable number of hours a week, you would be paying NI. I don't know what they mean by "basic" but it is the top slice of your earnings which wouldn't be subject to NI because it is "expenses".

(4) Of course if your hourly pay is sufficiently above NMW, it won't affect the calculation that you are being paid NMW.

(5) If that partner isn't a subsidiary in the same group then I would expect them to be paying something of the 20% as an introduction fee.

(6) Cycling is OK. There should be a milage rate applicable.

(7) Food from home is not OK - it has to be purchased when you are out in the day to which the claim is related. You are meant to keep receipts to prove this - ie showing the amount paid and date/place of purchase. HMRC could ask for the evidence.