Sterling Umbrella

meerustar

Hi all, hubby has been being paid for work through Sterling CIS, and has received a letter saying that he (and his workmates) are to be paid by Sterling Umbrella from now on.

The letter stated that he would be paid but had to send in expenses forms every week (whereas he has usually just gone to an accountant at the end of the year with all his receipts and let the accountant sort things) He didn't really understand the letter so rang them.

He asked how it worked and this is the explanation he got.

Sterling said, if, for example, he works 20 hours a week at £10 per hour, they will make out that he earns minimum wage and pays tax on that and claims the rest back through expenses. They say he can claim 14p per mile, but they say they will make it up to 45p. So if he travels 10 miles to work and 10 miles back he can claim £19 per day! They said he can claim £5 per day for food if working for 5 hours a day and upto £10 for food if out of the house 10 hours a day.

So in theory, 19 per day x 5 = 95 per week
£10 per day for food = 50 per week
So £145 per week + minimum wage.

So he asked how that would work if on £10 per hour and working 50 hours per week .. then you would lose money. Or what if someone doesn't drive to work (a couple of the lads don't as they get picked up), and had no expenses, again, would you lose money.

They had no idea what to answer!!! They have taken his details to ring back as no one knows and they only ever use the £10 per hour for 20 hour week example!

So we are completely lost and I'm sorry if I've lost you with this post but this is how it has been explained. Does anyone know how these things work, as hubby will be paying £23 per week to them just for them to pay him. Thanks

Bean_Counter

It would appear that the umbrella company are trying to get round the new HMRC that apply from this weekend, where such companies will have to account for PAYE and NIC on the wages that they pay to people such as your hubby (who I assume is in construction.) They will also have to provide new returns to HMRC will details of the people that they provide.

Hence it would appear that they want to pay minimum wage to minimise the amount of PAYE and NIC they will have to account for, but it will be interesting to see how they will account for your 50 hour week example.