Paid through someone elses LTD?

KJF7

As a sub-contractor what are the caveats of being paid through someone elses LTD company instead of an umbrella? I'm trying to work out how much better off I would be financially (if at all) in comparison with any extra hassle it may cause.

I'm not working for the person (my dad) but from what I understand of the agency email he could take on my tax and NI duties?

I've included the email below:

As you will no doubt be aware the Government has enacted new legislation that came into force on 6 April 2014. This is colloquially known as the Onshore Intermediaries Legislation.
Onshore Intermediaries Legislation:
Part 1, Chapter 2 of the Finance Bill 2014 makes amendments to Section 44 ITEPA 2003 (and
the equivalent NI Regulations have also been amended) requiring that where individuals are
working for clients via one or more intermediaries then we are required to treat them as
!!!8216;employed earners!!!8217; for tax and NI purposes.

This means that we are required to deduct PAYE and NI from the payments we make to you to comply with this legislation. However, the newly amended Section 44 will not apply where the remuneration paid to individuals engaged by personal service companies is already being treated as employment income with the required PAYE and National Insurance being deducted. Remuneration does not include genuine dividends lawfully paid to the shareholders.

With the above in mind, we require from you by 23/04/2018 written confirmation that the workers you engage as a consequence of your contract with us are being treated as employees for the purposes of tax and NI with the appropriate PAYE and NI deducted. This confirmation must confirm that the remuneration the operatives receive is being treated as !!!8216;employment income!!!8217; for tax and NI purposes. Please complete and sign schedule 1 of this letter.

Failure to provide the Schedule attached to this letter will result in either us being unable to
contract with you or us deducting PAYE and NI from the payments we make to you.
I look forward to receiving the attached schedule signed and completed by the requested date.

!!!8226; The PSC hereby confirms that all workers engaged by the PSC as a consequence of the
contract between the PSC and the Company are being treated as employees for tax purposes
and employed earners for the purposes National Insurance.
!!!8226; The PSC herby confirms that all remuneration received by every worker engaged by the PSC
as a consequence of the contract between the PSC and the Company constitutes
employment income under the Income Tax (Earnings and Pensions) Act 2003 for tax
purposes and employed earner!!!8217;s earnings for National Insurance purposes.
!!!8226; With regards to every worker engaged by the PSC as a consequence of the contract between
the PSC and the Company, the PSC hereby confirms that the appropriate PAYE and National
Insurance is being deducted from all remuneration paid to all such workers, and that the PSC
is hereby complying with its responsibilities as the employer of the operatives for the
purposes of tax and National Insurance.
!!!8226; The PSC confirms that the assurances given in this schedule are ongoing assurances and
that they will continue for the entire duration of its contract with the Company.
!!!8226; The PSC acknowledges that the Company will rely on the assurances given in this schedule
and the PSC accepts full responsibility where the assurances given by the PSC in this
schedule are found to be false or fraudulent.
!!!8226; The PSC agrees to indemnify the Company against any tax and National Insurance, interest,
penalties or any related costs or losses that the Company incurs or is required to pay in
relation to the engagement of the worker as a consequence of the contract between the PSC
and the Company.
!!!8226; The Director hereby confirms that they are authorised to agree this schedule on behalf of the
PSC and that they have the necessary authority to bind the PSC to the terms of this schedule.
!!!8226; The Director accepts on his/her own and on behalf of any other directors of the PSC that they
may be held personally liable where the assurances given in this schedule are found to be
false or fraudulent.

Wyndham

You will be better off, but your dad will need to pay employers NI on your behalf, so he would be worse off. Both you and he should look for specialist advice here.

getmore4less

Wyndham wrote: »

You will be better off, but your dad will need to pay employers NI on your behalf, so he would be worse off. Both you and he should look for specialist advice here.

As the dad just acts as the umbrella the employer NI should come from the revenue the son pulls in so there is no difference to what's left for the son.

the only thing saved would be the margin and that might not cover the extra admin costs/time for 1 employee.