Hi,
I am a first time contractor, using an umbrella company for now. I thought I understood everything but NI (EER and EEE) has caught me out and I wondered if anyone could advise.
I have timesheets signed weekly, faxed to the agency, and then fill in and submit a weekly timesheet with the umbrella - which then raises an invoice for that weeks work to the agency - I had a few problems with the agency, they claim to have not received my timesheets, such that when payment was made from them to the umbrella there were 3 weekly amounts bundled together as 1 amount.
The umbrella, I am on weekly uservice, then processed the payment and paid me - good so far, but when I looked into the calcs properly, they have processed it as 1 weeks pay, and hence only given me 1 week of EER NI and EE NI tax free allowances, ie the £110 for EER NI etc.
I have challenged this with them and they have said this is how it works, it is correct and HMRC are happy with it - I thought of course they are, they are getting more money from me unnecessarily!
My expectation was that they would look at what timesheets/invoices/payments are being processed, recognise it is 3 weeks and apply 3 weeks allowances , ie 3*110.
I then cannot grasp the point of the account lock feature - every time you lock and skip a weeks pay and bundle it into another you cost yourself extra NI.
I am not bothered about the PAYE - because it is cumulative that can be sorted out, but NI isnt, and now I can never get that lost allowance back.
I have been stung twice now, and I am thinking of changing to a different Umbrella, but not sure if they all work like this.
Can anyone impart their experiences in this area to help me?
I am a first time contractor, using an umbrella company for now. I thought I understood everything but NI (EER and EEE) has caught me out and I wondered if anyone could advise.
I have timesheets signed weekly, faxed to the agency, and then fill in and submit a weekly timesheet with the umbrella - which then raises an invoice for that weeks work to the agency - I had a few problems with the agency, they claim to have not received my timesheets, such that when payment was made from them to the umbrella there were 3 weekly amounts bundled together as 1 amount.
The umbrella, I am on weekly uservice, then processed the payment and paid me - good so far, but when I looked into the calcs properly, they have processed it as 1 weeks pay, and hence only given me 1 week of EER NI and EE NI tax free allowances, ie the £110 for EER NI etc.
I have challenged this with them and they have said this is how it works, it is correct and HMRC are happy with it - I thought of course they are, they are getting more money from me unnecessarily!
My expectation was that they would look at what timesheets/invoices/payments are being processed, recognise it is 3 weeks and apply 3 weeks allowances , ie 3*110.
I then cannot grasp the point of the account lock feature - every time you lock and skip a weeks pay and bundle it into another you cost yourself extra NI.
I am not bothered about the PAYE - because it is cumulative that can be sorted out, but NI isnt, and now I can never get that lost allowance back.
I have been stung twice now, and I am thinking of changing to a different Umbrella, but not sure if they all work like this.
Can anyone impart their experiences in this area to help me?
Comment