Recruitment Agency’s 5% admin charge on weekly pay

kurrious

[FONT=&quot]Hi All,

First time on the forum. I thought I’d ask for help here as you guys really seem to know what you are doing. I work in the Healthcare sector as a Care/Support worker. I’ve just joined a care agency and they have informed me that I will have to part with a 5% administration charge each time I get paid.[/FONT]:mad:[FONT=&quot] I will be paid on a weekly basis. Is this legal? I have asked why this is the case and I am not quite happy with the response I got.

The agency uses another company for their payroll (International Sub-contracting Services Limited, aka Intelligent Salary Solutions). I am thinking of asking for the money back when I leave them in a few months’ time, but that depends on whether this charge is backed by law or not.

I would have been less bothered about this charge if the agency were to provide Professional Indemnity cover for their staff, but they’ve made it clear that that’s my responsibility. I was advised to join the Royal College of Nursing who would then provide PI cover for me as part of my membership benefits. When I asked ISS what the charge was for, I was told it is to cover their cost of processing any work-related expense claims I may make. I am at a loss as to what this is all about. Basically, I will be paying an extra 5% tax on my income! [/FONT][FONT=&quot]:([/FONT][FONT=&quot]

Please help! Thanks a million in advance for your responses. :A[/FONT]

Two4Tuesday

This is fairly normal in contracting terms. This 'Umbrella Company' is charging you 5% in order to do the payroll for you. On the bright side, you may be able to claim for travel expenses to and from work, meal allowances and in some cases, necessary equipment. All of these would be paid out of your contract rate, but you wouldn't then pay tax on them.

Some Umbrella Companies (like the one I'm with) charge a flat fee of around £30 per week. If 5% of your weekly gross income is more than £30 then it's not a good deal, unless the fee is capped at that level.

EDIT: The alternative to a company like this is to set up your own limited company and invoice the agency directly. You then have to do your own payroll and tax collection, and pay an accountant. In my view, you're better off with the umbrella company.

Icequeen99

kurrious wrote: »

[FONT=&quot]Hi All,

First time on the forum. I thought I’d ask for help here as you guys really seem to know what you are doing. I work in the Healthcare sector as a Care/Support worker. I’ve just joined a care agency and they have informed me that I will have to part with a 5% administration charge each time I get paid.[/FONT]:mad:[FONT=&quot] I will be paid on a weekly basis. Is this legal? I have asked why this is the case and I am not quite happy with the response I got.

The agency uses another company for their payroll (International Sub-contracting Services Limited, aka Intelligent Salary Solutions). I am thinking of asking for the money back when I leave them in a few months’ time, but that depends on whether this charge is backed by law or not.

I would have been less bothered about this charge if the agency were to provide Professional Indemnity cover for their staff, but they’ve made it clear that that’s my responsibility. I was advised to join the Royal College of Nursing who would then provide PI cover for me as part of my membership benefits. When I asked ISS what the charge was for, I was told it is to cover their cost of processing any work-related expense claims I may make. I am at a loss as to what this is all about. Basically, I will be paying an extra 5% tax on my income! [/FONT][FONT=&quot]:([/FONT][FONT=&quot]

Please help! Thanks a million in advance for your responses. :A[/FONT]

I think the crucial thing is you are not staff of the agency. As Two4Tuesday says, sounds like this is an umbrella company so you are not actually employed by the agency but your contract is likely to be with the umbrella company.

Have a look at this page which explains how this structure works.

http://www.sjdaccountancy.com/about/ourservices/umbrella_company/using_an_umbrella_company.html

IQ

sablelady

The care agency and payroll company are probably owned by the same people. AFAIK you should be able to go through any umbrella company and prices start at a flat £9.99 per week.

I found this link:
http://www.contractorcalculator.co.uk/agency_force_choice_contractor_umbrella_company.aspx

Who?_me?

Run run as fast as you can, this company are based in Gurnsey / Sark, therfore off shore, and you shouldn't touch them with a barge pole. There have been massive issues with tax avoidance. If you need to use an umbrealla company (which is what they are) then you need to go with one in the UK, Giant, Racs, there are loads of them.
http://henrytapper.com/2012/11/04/iss-confused-i-am/

http://www.thisisguernsey.com/news/2012/11/05/bbc-accuses-sark-firm-of-tax-avoidance-over-supply-teachers/

Please note it only refers to supply teaching as that is what the investigation was based on.

All umbrealla comanies charge an admin fee, but at the end of the day, you get paid the same - but if you go with ISS you could be paying one hell of a lot more in fines and non payment of tax.
It the new thing for agency staff as it means that the agency who find you work don't have to have their own payroll, but you have to pay to be paid. There are loads of posts on here about umbrella companies to give you more information on them.

Who?_me?

Also, get this post moved to employment forum, you may get more responses.

kurrious

Thanks all,
I have spoken to my agency and they said I must use ISS for my payroll - there's no flexibility whatsoever. From my brief web-research on the activities of ISS, I understand they will not be making employer's NI contributions on my behalf as they are an offshore company claiming "non-UK presence". I have also found that the projected savings will be too small to justify all the hassle involved in dealing with this company. My employment with this agency will therefore be very brief.