Self employed contractor on PAYE - NI question

natalie9707

Currently filling out my husbands self assessment tax return. 
He is self employed, currently working on a temporary contract under an umbrella company, and pays tax and NI weekly via PAYE.

On the self employed full form, box 82 has space for any tax paid (for which he will enter the amount paid through PAYE for the period), but there is no room to enter NI contributions despite him having paid them already. We are concerned he is going to be asked to pay them again. Does anyone have any idea on what to do in this situation?

MysteryMe

I'm in a similar position, contractor on PAYE for 95% of my income through an Umbrella . The umbrella company will send a P60, in fact from memory when I start the SA input that P60 info is already populated on the form by HMRC. They will know from his pay reference what NI has been paid during the PAYE period. I certainly wasn't asked to pay NI twice. 

[Deleted User]

He is not self- employed. Complete the employment pages instead. 
NIC for employees is never entered on a tax return and will not appear in the calculation.

natalie9707

Because of COVID and the new self employement benefits laid out by the government (partner's work likely to be affected leading to loss of income), we have reviewed his SA and realised he declared his PAYE as income under the employed section - which is not correct because he is not employed by the company he is currently contracting for, and hence we are looking to change this. 

It's just all so confusing. If he were to leave it, firstly it wouldn't be correct, and secondly he would not be eligible to any grant because it looks as if he is employed. 

He is going to call HMRC tomorrow for advice. Thank you for your help. 

natalie9707

MysteryMe said:

I'm in a similar position, contractor on PAYE for 95% of my income and I complete a SA for the other 5%. The umbrella company will send a P60, in fact from memory when I start the SA input that info is already populated on the form by HMRC. They will know from his pay reference what NI has been paid during the PAYE period. I certainly wasn't asked to pay NI twice. 

Also... So for your 95% PAYE earnings - do you put them as employement or self employement on the SA tax return?

[Deleted User]

If your husband works through an umbrella company he is NOT self-employed (would strongly advise not to state that he is when talking to HMRC) He is an EMPLOYEE  of that umbrella company under PAYE. I would strongly advise speaking to an accountant or the advisor who suggested that route in the first place.

natalie9707

purdyoaten2 said:

If your husband works through an umbrella company he is NOT self-employed (would strongly advise not to state that he is when talking to HMRC) He is an EMPLOYEE  of that umbrella company under PAYE. I would strongly advise speaking to an accountant or the advisor who suggested that route in the first place.

So this is where I also got confused. He signed a document with HAYS recruitment, and on that document it clearly states that he is self employed as a temporary worker/contractor. He spoke to HAYS a week ago when the government announced the 80% for employees, and he was reminded by them that he is in fact self employed (he pays for his annual leave, he pays his employers pension contributions, and is not entitled to any sick pay), so he would not be eligible for the 80% for employees... This is all so conflicting. He is paid (as in gets payslips) from HAYS themselves as the client pays the recruitment agency, who pay my husband (PAYE tax and NI come from this), I think I used the term umbrella company wrong, I don't think he is paid by an umbrella company, but by the recruitment agency who secured him the contract. 

He is self employed - but paid via PAYE - everybody is giving us conflicting information and it's so stressful given the current situation. 

natalie9707

purdyoaten2 said:

He is not self- employed. Complete the employment pages instead. 
NIC for employees is never entered on a tax return and will not appear in the calculation.

My OP contains a mistake - I thought he was paid via an umbrella company, but in fact he is paid directly by the recruitment agency who are hired by the company he is currently contracting for. He signed a document titled "PAYE for temporary workers" which clearly stated in one of the subsections that he is self employed during this contract, and that him accepting this contract does not make him an employee, but a contractor undertaking a temporary role on a self employed basis. 

It's very confusing - but he is definetly self employed, and hence his tax return should reflect this, regardless of whether his tax is deducted via PAYE, he is still self employed.

Pennywise

If he's having NIC deducted on his payslips, it goes down as employment not s/e. He's being treated as an employee for tax/nic but as self employed for other issues such as employment rights.  S/E never get NIC deducted from their pay.

[Deleted User]

natalie9707 said:

purdyoaten2 said:

He is not self- employed. Complete the employment pages instead. 
NIC for employees is never entered on a tax return and will not appear in the calculation.

My OP contains a mistake - I thought he was paid via an umbrella company, but in fact he is paid directly by the recruitment agency who are hired by the company he is currently contracting for. He signed a document titled "PAYE for temporary workers" which clearly stated in one of the subsections that he is self employed during this contract, and that him accepting this contract does not make him an employee, but a contractor undertaking a temporary role on a self employed basis. 

It's very confusing - but he is definetly self employed, and hence his tax return should reflect this, regardless of whether his tax is deducted via PAYE, he is still self employed.

Regrettably, given what you have now said he is very definitely not self-employed. Pennywise has summed the situation up perfectly above - Hays applied PAYE to his earnings but gave him none of the employment rights. Unfortunately this is clear cut.

natalie9707

purdyoaten2 said:

natalie9707 said:

purdyoaten2 said:

He is not self- employed. Complete the employment pages instead. 
NIC for employees is never entered on a tax return and will not appear in the calculation.

My OP contains a mistake - I thought he was paid via an umbrella company, but in fact he is paid directly by the recruitment agency who are hired by the company he is currently contracting for. He signed a document titled "PAYE for temporary workers" which clearly stated in one of the subsections that he is self employed during this contract, and that him accepting this contract does not make him an employee, but a contractor undertaking a temporary role on a self employed basis. 

It's very confusing - but he is definetly self employed, and hence his tax return should reflect this, regardless of whether his tax is deducted via PAYE, he is still self employed.

Regrettably, given what you have now said he is very definitely not self-employed. Pennywise has summed the situation up perfectly above - Hays applied PAYE to his earnings but gave him none of the employment rights. Unfortunately this is clear cut.

So what would he be classed as then?
He emailed his agent last night who replied with "yes, you are self employed, you are not employed by HAYS or the company you work for", but according to everyone above he isn't self employed.

At the root of all of this is a newly married couple who will struggle to survive if his job is lost due to coronavirus, yet because of this loophole, he is entitled to nothing (but universal credit?). Looks like we are going to have to move back in with family until this is over because we will get no help (despite my husband paying taxes honestly all his life).