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Changing from company to Parasol

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    Changing from company to Parasol

    Since I only expect to be working an average of one or two days a month, I've decided to wind up my company and use an umbrella.

    Parasol's monthly charge is not very different to what my accountant charges to run the company, but the advantage is that I don't have to pay for months I don't work. Also, with the company, the "5%" allowed under IR35 is not enough to pay the accountant. Further, after interrogating their customer service, I possibly wrongly concluded that I would only be paying their weekly charge of £27.50 for weeks I worked, which would quarter my accountancy overheads.

    However I overlooked that as an umbrella employee, I will no longer have an annual earnings period for NI purposes. As a company director I paid no NI until I've earned well over £5000 in a year. As a weekly paid employee I would pay aprox. 24% NI on anything over £110 earned in any given week. Alternatively, as a monthly paid employee I would pay the same rate on anything over £467 earned in any given month. Essentially, the NI system is designed on the premise that your earn more or less the same each week/month, so people like me who don't, who have an irregular pattern of work, pay much more NI for a given amount of annual earnings.

    Let's assume that for both NI and Parasol charging purposes, I'm treated as either weekly or monthly paid. Then, if I work more than 1 day in the month, my take-home is actually always higher if I'm treated as monthly paid. The extra NI from being treated as weekly paid always more than offsets the lower Parasol fee from only paying for weeks in which I actually worked.

    Parasol originally implied I would only pay £27.50 for each week containing days I actually worked, or the monthly fee if I worked in all weeks. I'm doubtful that this will turn out to be true, if I'm monthly-paid for NI purposes.

    #2
    Plan on dumping your login too?

    How about Bendmeover?

    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
    - Voltaire/Benjamin Franklin/Anne Frank...

    Comment


      #3
      Originally posted by cojak View Post
      Plan on dumping your login too?

      How about Bendmeover?

      The login was appropriate in 2000 - 2002.

      Having said that, I've actually paid virtually nothing in tax on all my earnings since A-day in 2006, bunged huge amounts into a pension, hence semi-retiring now.

      It's going to come as a shock to pay as much as 20%. The fact that it only amounts to the odd fiver is neither here nor there, it's the principle.
      Last edited by IR35 Avoider; 28 January 2010, 18:34.

      Comment


        #4
        Well, having explored the Parasol timesheet system now, it appears that I can choose how much I want to pay in fees, i.e. it's not preset to monthly or weekly, it's simply the number of weeks you select for your timesheet multiplied by £27.50. So if I work one day and chose a one week range, they'll charge me for one week, if I choose a two week range, including a week I didn't actually work, they'll charge me £55. I'm guessing that I'll get an extra £110 NI allowance if I include the extra week, which will save me approximately as much as I paid extra in charges. i.e their charges are designed so it makes bugger all difference what you do; you just get to choose whether you want your money to go to them or the tax man.
        Last edited by IR35 Avoider; 28 January 2010, 18:33.

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          #5
          I may be doing them a disservice - the email I got from their payroll people was fairly incomprehensible. Given that the agency pay them monthly, and therefore they pay me monthly, it's possible I will be treated as monthly paid for NI purposes. It doesn't really make sense that my NI earnings period would be determined by the idiosyncracies of their timesheet system.

          Comment


            #6
            Originally posted by IR35 Avoider View Post
            the email I got from their payroll people was fairly incomprehensible.
            Beats the advice one can get on this forum though?

            Comment


              #7
              Originally posted by IR35 Avoider View Post
              The login was appropriate in 2000 - 2002.

              Having said that, I've actually paid virtually nothing in tax on all my earnings since A-day in 2006, bunged huge amounts into a pension, hence semi-retiring now.

              It's going to come as a shock to pay as much as 20%. The fact that it only amounts to the odd fiver is neither here nor there, it's the principle.
              I see. Well, at least the rest of it will keep you in ciggies and beer.
              "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
              - Voltaire/Benjamin Franklin/Anne Frank...

              Comment


                #8
                Originally posted by IR35 Avoider View Post
                Having said that, I've actually paid virtually nothing in tax on all my earnings since A-day in 2006, bunged huge amounts into a pension, hence semi-retiring now.
                Please explain - are you near to 55 and have worked out a way to buy a good annuity?

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