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Umbrella`s are they really helping contractors with tax affairs

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    Umbrella`s are they really helping contractors with tax affairs

    I ask this as I thought when this is what they claim this is what they should do after all said and done what else is their use.??

    As a contractor being paid twice in the same tax period can result in loosing thousands of pounds easily, so if you retained the service of an Umbrella would you expect them to do either of the following.

    Answer 1 should they advise you to delay 1 day to save you loosing out
    -or-
    Answer 2 They know your get hammered for tax and still rush payment out.

    I would have thought when they see the tax cut off 1 day later and would have delayed paying you by 1 day in order that you do not loose half of your money??

    What is then the alternative to help you retain your hard earned money

    #2
    Nice use of the English language.

    Comment


      #3
      Originally posted by Lotech
      I ask this as I thought when this is what they claim this is what they should do after all said and done what else is their use.??

      As a contractor being paid twice in the same tax period can result in loosing thousands of pounds easily, so if you retained the service of an Umbrella would you expect them to do either of the following.

      Answer 1 should they advise you to delay 1 day to save you loosing out
      -or-
      Answer 2 They know your get hammered for tax and still rush payment out.

      I would have thought when they see the tax cut off 1 day later and would have delayed paying you by 1 day in order that you do not loose half of your money??

      What is then the alternative to help you retain your hard earned money
      Ltd Co plus decent accountant would be the best way I would have thought?

      Comment


        #4
        Originally posted by King Cnvt
        Nice use of the English language.

        Whats your point by name and by nature?

        Comment


          #5
          Originally posted by Lotech
          Whats your point by name and by nature?
          His point is that you're illiterate.

          HTH
          Hard Brexit now!
          #prayfornodeal

          Comment


            #6
            Originally posted by Lotech
            I ask this as I thought when this is what they claim this is what they should do after all said and done what else is their use.??

            As a contractor being paid twice in the same tax period can result in loosing thousands of pounds easily, so if you retained the service of an Umbrella would you expect them to do either of the following.

            Answer 1 should they advise you to delay 1 day to save you loosing out
            -or-
            Answer 2 They know your get hammered for tax and still rush payment out.

            I would have thought when they see the tax cut off 1 day later and would have delayed paying you by 1 day in order that you do not loose half of your money??

            What is then the alternative to help you retain your hard earned money

            An umbrella company pays you by PAYE (Pay As You Earn) which means that you do not 'lose' money in tax if you are paid twice in the same tax period. PAYE means that your tax free allowance is divided by 12 (monthly paid) or 52 (weekly paid) and is then applied to the earnings that you have in the period. Say your tax free allowance is £100 per week - if your earnings for the week are £500 then £400 will be subject to income tax; if you earn £1000 then £900 will be subject to tax.

            As the tax free allowance is cummulative, if you did not receive payment the following week your tax free allowance would build up to £200 and this would then be applied to your next payment which would then reduce your taxable earnings to £300.

            HTH
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            ContractorUK Best Forum Advisor 2015

            Comment


              #7
              Tax is calculated over the tax year which is then split into 52 weeks/12 months depending on how often you get paid. Your allowances are split accordingly so that you generally use the correct portion of your allowances each week/month.
              If you have time on the bench and don't use your tax allowances for a while then you can claim the excess tax paid back at the end of the year.

              The only time the scenario you describe becomes relevant is if you are on the cusp of a new tax year having used all of your allowances in the previous year and plan to have lots of time off in the new year.

              In this case, you control when the umbrella pays as they only pay once you submit your timesheets and expense claims - simply delay submission.

              You ask what use are umbrellas - well, if you are inside of IR35 or simply don't want the hassle of running your own Ltd versus the additional costs then they are fine.

              Al.
              Back at the coal face

              Comment


                #8
                Originally posted by sasguru
                His point is that you're illiterate.

                HTH
                Harsh.













                But fair.
                Best Forum Advisor 2014
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                Comment


                  #9
                  Originally posted by Lotech
                  I ask this as I thought when this is what they claim this is what they should do after all said and done what else is their use.??

                  As a contractor being paid twice in the same tax period can result in loosing thousands of pounds easily, so if you retained the service of an Umbrella would you expect them to do either of the following.

                  Answer 1 should they advise you to delay 1 day to save you loosing out
                  -or-
                  Answer 2 They know your get hammered for tax and still rush payment out.

                  I would have thought when they see the tax cut off 1 day later and would have delayed paying you by 1 day in order that you do not loose half of your money??

                  What is then the alternative to help you retain your hard earned money
                  I got collared on this one with a well known umbrella. Lost about £400 over xmas when my agency paid early. I was told it would even out in the next payroll but didn't notice it.
                  Well known umbrella does have a lock request but it is down to the employee to invoke it, IMO not good enough.

                  Comment


                    #10
                    Originally posted by sasguru
                    His point is that you're illiterate.

                    HTH
                    How about you tell me where I can come and meet you - or will you be a little bit insecure when your not hiding behind your keyboard.

                    Creep your posts indicate u are 1 wierd freek

                    Comment

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