Employers NI

[fishdisco]

I used an umbrella company for 8 weeks during a contract as a project manager. They issued payslips about once every month, by email. All these payslpis had deductions for Employees NI and also EmployERS NI. I asked them why I had to pay EmployERs NI, they said it was to do with IR35.

I don't understand because initially they had said IR35 did not affect me as it was such a short contract. Also, I was paying them a hell of a lot in fees. Apart from ripping me off in other ways and being generally rubbish, I am sure I have paid too much tax.

Has anyone else had to pay EmployERs NI? Is this legal? Shall I go to taxt office and ask them to investigate - I dont think it's fair I have been charged for their tax.

[Robster]

I am also paying Employer's NI. This is my first contract and I was annoyed at first as it hadn't occured to me but assumed it was normal, as thinking about it from the brolly's point of view, if they had to pay that (it's more than the fee I pay them) how would they make any money.

[WindyAnna]

Who would you expect to pay it if you didn't? I don't see why it is particularly relevant to IR35 but the fact is that it has to be paid - the umbrella uses the money they get from your client/agency to pay everything - both types of NI, tax, their fee etc.

[Jog On]

I've heard about this as well with umbrellas. Thinking about it - by going through their umbrella service you are their employee - not your own employer.....

You'd be your own employer if you were Ltd. But then again I don't know how umbrellas work and why they can get away with the expenses thing..

I suppse they make you pay your employer NIC (even though technically they are your employer?) then make up for it by doing what they do with the expenses..

I do think that if you are going through them then you are an employee and IR35 isn't an issue as they pay your tax and NI - but charge you for employers NI.. nice!

[Sockpuppet]

Has anyone else had to pay EmployERs NI? Is this legal? Shall I go to taxt office and ask them to investigate - I dont think it's fair I have been charged for their tax.

Its your tax. Your daily rate includes Employers NI. It has nothing to do with IR35 you need to pay employers NI whether you are inside or out. The umbrella is just paying what tax you would pay if you ran your own ltd.

[MrRobin]

Basically, they are paying the employers NI (since you are an employee of the umbrella), but out of the income that they get via your services to the client.

As pointed out already, how else would they pay it?? Most umbrella fees wouldn't cover the NI payments... perhaps there are umbrellas out there that take a bigger fee and the NI etc is included..?

[Sockpuppet]

You'd be your own employer if you were Ltd. But then again I don't know how umbrellas work and why they can get away with the expenses thing..

Read the contract. There will be a part about them taking EmployerNI from your wages. This is how umbrellas work. They transform your daily rate into PAYE.....just get your own ltd and stop worrying about it.

[Jog On]

Read the contract. There will be a part about them taking EmployerNI from your wages. This is how umbrellas work. They transform your daily rate into PAYE.....just get your own ltd and stop worrying about it.

I've got one! Just trying to understand how the brollies get away with the expenses thing with a view to..... STOP!!

I'm not one to over do it on the expenses for the sake of avoiding tax - well artificially anyway!

[malvolio]

I've got one! Just trying to understand how the brollies get away with the expenses thing with a view to..... STOP!!

I'm not one to over do it on the expenses for the sake of avoiding tax - well artificially anyway!

What "Expenses thing"?? I do hope you are not committting tax evasion by claiming for expenses you haven't actually incurred...

[Sockpuppet]

I've got one!

Sorry the get a ltd was meant for the OP.