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View Full Version : Parasol - Employment Costs - extra charges??



fred857
24th January 2012, 16:24
I've been with Parasol for over 4 years and I have always been pleased with their service, and have trusted them to pay me the right amount and on time, which they generally did a good job of doing.

This month I decided to actually run through the calculations on my latest Parasol monthly payslip since they changed the payslip format back in October. My math skills aren't all that great but I discovered a charge which I couldn't account for. On the new payslip underneth the 'Parasol Margin' deduction line (£119.50 incidentally), there is another deduction line labeled 'Employment costs', this is a total of the employer NI charges, and in my case my pension contribution, cushty...or so I thought. But having calculated the 'er NI and pension contribution I was left with a mysterious unaccounted £128 charge which had been taken by Parasol from my invoice receipt.

I called Parasol to be told (in a very guarded manner) that the £128 charge is an extra deduction to cover Parasol insurance and operating costs - he was all a bit vague to be honest. That's very strange, I said, as I thought liability/indemnity insurance is already covered in my standard £119.50 fee. And any other charges would be complete news to me. Apparently not he said. I asked for a breakdown of the £128 to find out exactly what it represented. The Parasol guy told me that he would need to investigate and email me back the breakdown. He couldn't wait to get me off the phone.

I'll await their response tomorrow, but something doesn't feel quite right. I will update tomorrow.

fred857
24th January 2012, 23:33
I've figured it with the help of @Wary's explanation over on the other Parasol charging thread:

http://forums.contractoruk.com/umbrella-companies/66179-new-umbrella-company-required-15.html#post1468212

I'll see what Parasol come back to me with tomorrow. But am feeling really disappointed in them.

Yil
2nd February 2012, 13:08
I’ve reviewed the threads talking about Parasols rather opaque “Employment Costs” payslip line item and how it pertains to employers NI but I’d like to confirm that I understand the issue correctly:

Employers NI should be calculated as (for a weekly invoice cycle):
((Invoice Amount - £136 – Parasol Fee – Allowable Expenses) * 13.8) / 113.8)

However Parasol are not including the “Allowable Expenses” component of this calculation.

Is this summary correct?

Wary
2nd February 2012, 13:35
I’ve reviewed the threads talking about Parasols rather opaque “Employment Costs” payslip line item and how it pertains to employers NI but I’d like to confirm that I understand the issue correctly:

Employers NI should be calculated as (for a weekly invoice cycle):
((Invoice Amount - £136 – Parasol Fee – Allowable Expenses) * 13.8) / 113.8)

However Parasol are not including the “Allowable Expenses” component of this calculation.

Is this summary correct?

Assuming they apply the weekly Employers NI calculation (i.e. a threshold of £136 as opposed to a monthly £589) and assuming you have no pension contribution, that seems correct to me. If they're applying a weekly calculation then I presume your invoices & expenses are weekly? It is these weekly amounts and their weekly fee that you should plug into the above calculation.

The Spartan
2nd February 2012, 13:46
There's a few people on here who been screwed by Parasol's "Employment Costs" the best thing to do is leave and spread the word to anyone else who uses their service

Yil
2nd February 2012, 13:53
There's a few people on here who been screwed by Parasol's "Employment Costs" the best thing to do is leave and spread the word to anyone else who uses their service

I may very well end up doing this but I want to ensure that I have my facts correct before I approach Parasol with this and give them a fair opportunity to respond!

The Spartan
2nd February 2012, 14:07
I may very well end up doing this but I want to ensure that I have my facts correct before I approach Parasol with this and give them a fair opportunity to respond!

They'll probably give you the same response they gave to me the extra is to cover Payroll costs, SMP and SSP even though you'll never use them. Basically they're using it to cover their AWR costs even though they can claim 92% of it back.

Nixon Williams
2nd February 2012, 14:47
They'll probably give you the same response they gave to me the extra is to cover Payroll costs, SMP and SSP even though you'll never use them. Basically they're using it to cover their AWR costs even though they can claim 92% of it back.

An umbrella company will effectively only be able to reclaim 92% of the SMP costs, they will be too big to reclaim any SSP costs.

The Spartan
2nd February 2012, 15:33
Even so they weren't very forthcoming about it in the first place hence I left them

The rebel
8th February 2012, 21:15
There's a few people on here who been screwed by Parasol's "Employment Costs" the best thing to do is leave and spread the word to anyone else who uses their service

They took my money and blame it on what they call 'employment costs'... never again with them.

Wary
9th February 2012, 06:36
They took my money and blame it on what they call 'employment costs'... never again with them.
Threaten them with an employment tribunal if they don't reimburse you. It'll cost you nothing.

Waldorf
9th February 2012, 08:25
This all seems very odd, has anyone worked out what this "extra" charge is, ie is it a percentage of your rate or is it a flat rate?

I thought Steve from Parasol posted on here, has he been asked to explain, if he has and has not then it does seem very odd.

Having said that, I cannot see who else will end up paying for this AWR thing, other than the contractor.

The Spartan
9th February 2012, 08:56
ContractorUmbrella don't take extra off me for AWR, I gather the reason Steve hasn't posted on here is because the evidence is irrefutable

Yehudi
9th February 2012, 09:28
And yet there is Steven today, on the Parasol company forum, advising people who don't claim expenses to do so. Strange that he can't find time to visit these parts any more...

The Spartan
9th February 2012, 09:35
That's because he's been found out and has no defence whatsoever.

Wary
9th February 2012, 12:46
This all seems very odd, has anyone worked out what this "extra" charge is, ie is it a percentage of your rate or is it a flat rate?

I thought Steve from Parasol posted on here, has he been asked to explain, if he has and has not then it does seem very odd.

Having said that, I cannot see who else will end up paying for this AWR thing, other than the contractor.

The extra amount appears to equate to 13.8% of the expenses claimed.

Steve used to post on here, but when people worked out exactly how they were manipulating their employment costs and the questions started to get too awkward, he went AWOL. I've thrown down the gauntlet to him personally on more than one occasion to come back on here and explain ... but he won't.

Legally they have to foot the AWR costs and not pass them on to their employees. Having said that, if they need to increase their fees in order to make the business model work, I don't think people would object as much. What is bad is they're effectively levying additional fees in an underhand, non-transparent and inconsistent manner.

Wary
9th February 2012, 12:50
And yet there is Steven today, on the Parasol company forum, advising people who don't claim expenses to do so. Strange that he can't find time to visit these parts any more...

That's ironic as the more expenses that contractors claim, the more money Parasol make by deducting additional employment costs from them at 13.8%.

Spot his ulterior motive :smile

scope
9th February 2012, 14:17
Somebody please explain this to me in plain English.. I pay parasol £119.50 a month.. Claim no expenses.. Yet over the last few months the "Employment Cost" has ranged between £500-£700 per month.. I have emailed Parasol asking for a breakdown, but failing them coming back to me.. What exactly are they taking this money for? As far as I can see Tax and NI are separate figures on the payslip, and got nothing to do with this amount. And dont tell me the cost of employing me, because surely that is what the £119.50 is for?? I signed up for £119.50 per month, not a penny more.

No wonder on my last payslip they only paid around 50% of the invoiced amount...

LisaContractorUmbrella
9th February 2012, 14:29
Somebody please explain this to me in plain English.. I pay parasol £119.50 a month.. Claim no expenses.. Yet over the last few months the "Employment Cost" has ranged between £500-£700 per month.. I have emailed Parasol asking for a breakdown, but failing them coming back to me.. What exactly are they taking this money for? As far as I can see Tax and NI are separate figures on the payslip, and got nothing to do with this amount. And dont tell me the cost of employing me, because surely that is what the £119.50 is for?? I signed up for £119.50 per month, not a penny more.

No wonder on my last payslip they only paid around 50% of the invoiced amount...

Have your gross earnings in the period varied as well Scope?? So when £500 was deducted were your earnings for that period lower than the earnings when the deductions were £700??

scope
9th February 2012, 14:41
Have your gross earnings in the period varied as well Scope?? So when £500 was deducted were your earnings for that period lower than the earnings when the deductions were £700??

Yes, the more I billed the higher the "employment cost" was.. I must correct myself.. It varies from £700-900.. If this is something they have charged me for offering me a service they have another thing coming.. I signed up for £119.50 and WILL go to a tribunal to recoop my money.

scope
9th February 2012, 15:13
I have just been on to Parasol who claims the ONLY cost being with Parasol is £119.50.. Absolutely NO hidden charges.. It will be interesting to call them tomorrow so I can get an understanding of why charge me 700-900 per month, on top of the £119.50 they are meant to charge.

LisaContractorUmbrella
9th February 2012, 15:47
Yes, the more I billed the higher the "employment cost" was.. I must correct myself.. It varies from £700-900.. If this is something they have charged me for offering me a service they have another thing coming.. I signed up for £119.50 and WILL go to a tribunal to recoop my money.

I would guess, and this is only a guess although an educated one, that Parasol have adopted a Swedish Derogation Contract of Employment which must, by law, have a provision for pay between assignments. Basically, this means that in order for an over-arching contract to be maintained as required by law under the AWR and by HMR&C to fulfil their requirements for mutuality of obligation, salary payments must be made on a regular basis regardless of whether the individual is on assignment or not; under the AWR the payment is for up to 4 weeks. I would think that, in order to fund this obligation, Parasol are making a deduction from your earnings to compensate for any pay between assignments that becomes due.

Surely you have received something explaining the additional deductions?? If you haven't agreed to a deduction in writing it is actually unlawful emplaw.co.uk - Latest British Employment Law News (http://www.emplaw.co.uk/lawguide?startpage=data/098001.htm)

scope
9th February 2012, 16:29
I would guess, and this is only a guess although an educated one, that Parasol have adopted a Swedish Derogation Contract of Employment which must, by law, have a provision for pay between assignments. Basically, this means that in order for an over-arching contract to be maintained as required by law under the AWR and by HMR&C to fulfil their requirements for mutuality of obligation, salary payments must be made on a regular basis regardless of whether the individual is on assignment or not; under the AWR the payment is for up to 4 weeks. I would think that, in order to fund this obligation, Parasol are making a deduction from your earnings to compensate for any pay between assignments that becomes due.

Surely you have received something explaining the additional deductions?? If you haven't agreed to a deduction in writing it is actually unlawful emplaw.co.uk - Latest British Employment Law News (http://www.emplaw.co.uk/lawguide?startpage=data/098001.htm)

But when queried about the AWR and what it mean to me Parasol said I get absolutely nothing.. No sick pay, no holiday pay, no nothing.. (Which to be fair I didnt expect.. ).. So if Im not getting anything then surely they are not entitled to charge me anything? I have not agreed to anything, and I have not received any details about this deduction as far as I can recall..

As far as I can see they started charging me this amount back in August/September (when they introduced their new pay slip/web site layout).. This coincided with me going over 24 months with my current client, and not able to claim expenses any more.. So I couldnt easily see a drop in income because of the extra tax I would be paying..

Im sure it will be all clear when I call them tomorrow.. I will make sure I study the timesheets for the last 6 months before calling..

Wary
9th February 2012, 16:33
I have just been on to Parasol who claims the ONLY cost being with Parasol is £119.50.. Absolutely NO hidden charges.. It will be interesting to call them tomorrow so I can get an understanding of why charge me 700-900 per month, on top of the £119.50 they are meant to charge.

The bulk of their "employment costs" is actually employers NI. Without knowing your gross income, the figure you quote is in the correct ballpark for monthly employers NI so may actually be OK.

fred857
9th February 2012, 20:05
Ok, I'm back.

After getting on to Parasol and playing the usual call centre game by demanding to speak to their supervisor, and their supervisor's supervisor I managed to get them to send me the breakdown of the employment costs. The hidden-no-hidden-fee charges were there exactly the same as I had calculated them - thanks to Wary's explanation.

When I challenged them on this they gave me the same old..really sorry..bla bla...but insurance and sickness costs have gone up..bla bla. story. Oddly they still could not acknowledge the fact they'd done anything wrong, still seeming justified in taking money from me without my consent.

I reiterated that I wasn't happy, but before I was able to play the old employment tribunal line, I was offered a complete refund on the charges going back to October! And I was told that the payroll system had been changed this month and that the 'additional' employment costs will go away!

A change of heart perhaps from Parasol? I have not received the refund yet, and neither have I received the latest payslip after their supposed payroll system change. We'll see, although I am still very unimpressed by what they've done and will be moving to a different umbrella for my next contract.

I would advise any Parasol contractors on here to contact Parasol and demand a breakdown of your employment costs back to October 2011, and if you discover that Parasol have made unauthorised deductions then I would suggest you demand a refund. It's your money they've taken.

seabro
9th February 2012, 20:12
I spent a long time on the phone to Parasol today, and spoke to a very nice, very helpful lady called Clare. She did not have all the answers, but she had some AND called me back as promised.

She has said she will call me back tomorrow hopefully with answers to 3 questions I left for her to investigate.

In my case, on my most recent monthly payslip, the 'cost of employment' amount is exactly 50p more than the employers NI figure.

Whilst 50p is not a significant amount, it is still more than the published 119.50 and also, I know it would rise had I claimed expenses.

Therefore, I have asked her:

1. How is the 'cost of employment' calculated.
2. What exactly is it for. (If it is for pay between assignments / sick pay etc - I will ask if I am entitled to it).
3. Is there a cap on the 'cost of employment' figure, and what is it.

The reason I am asking Q3 is because I was told even if you claim expenses, the cost of employment should be capped at 'about £15' on top. I asked her to check with payroll if there is a cap, what is the EXACT amount.

I sense that if there is a cap, it has been added sometime between today and October 1st when AWR came in.. and probably around the time people started kicking off about the 'cost of employment' figure.

In any case, I think it is time Parasol reconsidered publishing figures of 27.50 / 119.50 as their fees are definitely higher than this.

I will update you tomorrow.

Wary
10th February 2012, 05:13
When I challenged them on this they gave me the same old..really sorry..bla bla...but insurance and sickness costs have gone up..bla bla. story. Oddly they still could not acknowledge the fact they'd done anything wrong, still seeming justified in taking money from me without my consent.

I reiterated that I wasn't happy, but before I was able to play the old employment tribunal line, I was offered a complete refund on the charges going back to October! And I was told that the payroll system had been changed this month and that the 'additional' employment costs will go away!

Whenever one gets this kind of justification spiel from them, insist that they don't justify WHY they need to charge extra but justify the WAY in which they're doing it, when they could have easily just increased the weekly fee, which would have the advantage of being transparent, up-front, the same for everyone and no doubt would have been altogether easier to administer & to change their payroll system. Could it be that they purposely choose to alter the "employment costs" calculation instead, on the basis that only the most vigilent & astute employees would realise and hence it would be a hidden cost to most?

So they're planning to change their payroll system again to remove these deductions. Did you get that in writing from them?

Waldorf
10th February 2012, 09:08
I remember someone from Parasol, probably Steve on here, saying that AWR would cost a matter of "pence" rather than pounds - sounds as though he got his decimal point in the wrong place.

The Spartan
10th February 2012, 09:48
Has anyone contacted them about a refund of these extra costs?

Yehudi
10th February 2012, 10:30
I did. They refused to refund, saying:
"any deductions made are at Parasols discretion"

The Spartan
10th February 2012, 10:46
I did. They refused to refund, saying:
"any deductions made are at Parasols discretion"

Are you taking legal action?

Yehudi
10th February 2012, 10:47
Yes.

The Spartan
10th February 2012, 10:50
Sweet, me too

Wary
15th February 2012, 14:05
I did. They refused to refund, saying:
"any deductions made are at Parasols discretion"

Wow, that's scary!

Did they explain the "discretion" they used when they helped themselves to some of your money to the tune of 13.8% of your expenses, but didn't deduct anything from those without any claimable expenses? What "discretion" do they use to apportion the supposedly additional AWR overheads in this inconsistent manner?!?

The Spartan
15th February 2012, 14:15
Follow it up, don't let them get away with it. It's not right or legal

Danbro
16th February 2012, 12:45
Hi Everyone,

We welcome the opportunity to see whether we could be of any assistance to you during this turbulent time. We are clear, concise and compliant and have a facebook group full of happy clients to support it.

Please feel free to get in touch

geoff from contracta IOM
16th February 2012, 13:15
Hi Everyone,

We welcome the opportunity to see whether we could be of any assistance to you during this turbulent time. We are clear, concise and compliant and have a facebook group full of happy clients to support it.

Please feel free to get in touch

Think Lisa may have beaten you to it !

seabro
16th February 2012, 15:10
Customer services have now come back to me saying my employment costs have never and will never exceed the exact amount of employers NI - even if I claim expenses.

It seems the wheel that squeaks the loudest gets the oil.

I have asked parasols md if he would be willing to share the answers to two questions.

How do they decide who gets charged.
How do they work out how much the unlucky people get charged.

When I get a response, I will share it with you.

Seabro

The Spartan
16th February 2012, 16:35
Did they mention anything about refunding any money?

seabro
16th February 2012, 16:45
Did they mention anything about refunding any money?

In my case, I was only overcharged by 50p on Januarys payslip. I didnt work in nov/dec last year and I havent checked payslip from Oct.

However, I was told they would be refunding my 50p on my next months pay. So yes, I am getting a refund.

I did say that whilst the amout of overpayment was low, I don't understand how it could happen by accident. I said I believe there is more to this than meets the eye.

The md is off work this week, but has emailed me to see he will contact me next week.

I really hope he comes back to me with something positive and we can get to the bottom of this for once and for all.

DeductiveShark
16th February 2012, 16:49
I've been with Parasol for about 6+ years and have always been quite happy, and it was only today after going through my payslip and noticing these 'Employment Costs', that I got suspicious and decided to do a bit of digging...........I'm glad I did, and I'm glad this has already been addressed and explained (to some degree anyway!)

The time has come to go Ltd, however I want to make sure that I am reimbursed with any moneys that Parasol have taken from me under so called 'Hidden Costs' - I'll be giving them a call tomorrow to query this and will report back how I get on. The way I see it is that they are taking money from me that I did not agree to - there is only one word for it; THEFT!

BTW, isn't it part of employment law that they must provide all employers with a payslip which includes a full breakdown of all deductions? Next thing you know, they'll be revamping their payslip again, labelling Tax and NI as 'Boring Stuff you don't need to know about' and trying to add a few extra quid on for each contractor! in the hope no-one notices!

The Spartan
16th February 2012, 16:56
I'm due a response from them soon so I'll let you know how I get on after all they were overcharging me for 3 months

LisaContractorUmbrella
20th February 2012, 11:51
Hi Everyone,

I think this recent piece by Professional Passport gives some good information on this issue. Worth a read:

http://www.danbro.co.uk/assets/agency_intell_february_2012-4f4223cf92eb1.pdf

Danbro

I think the article explains what the contractors on this forum had already worked out for themselves - I think the issue was more one of transparency rather than accounting principals

Nixon Williams
20th February 2012, 11:52
I think this recent piece by Professional Passport gives some good information on this issue. Worth a read:

http://www.danbro.co.uk/assets/agency_intell_february_2012-4f4223cf92eb1.pdf

Danbro

At Nixon Williams we do not operate an umbrella company but the calculations given do not seem right:


In this example the traditional method calculation of
employment costs would be:
1000 - 27.50 - 150 - 136 = 686.50

Employers National Insurance would apply to the £686.50 at
13.8% giving an actual cost of £94.74.

The post AWR increased cost calculation applied by some
umbrella providers would return:
1000 - 27.50 - 136 = 836.50

An employment cost of 13.8% would be applied to this giving
an actual cost of £115.44.

A difference of £20.70 per week.

On the first example I would have expected the employers NIC to be included within the £686.50 so that the employers NIC of 13.8% would be applied to £603.25 giving NIC of £83.25 (603.25 + 83.25 = 686.50).

On the second example the 13.8% NIC would be applied to £735.06 giving NIC of £101.44 (735.06+101.44=836.50).

So the 'difference' would be £18.19 not the £20.70 quoted.

The umbrella would be broke if it followed the example provided on the link as it would be paying out the following:

Expenses = £150
NIC free Pay = £136
NIC'able Pay = £686.50
Employers NIC = £94.74

Total = £1,067.24

Income £1,000 therefore a loss of £67.24!

I can see why some umbrella companies are attempting to increase their income, following AWR they will probably have increased costs, but it should be up front.

The Spartan
20th February 2012, 12:02
But in all this they should not be taking their employment costs (Employers NI and margin) before the expenses have been deducted?

Danbro
20th February 2012, 13:22
I think the article explains what the contractors on this forum had already worked out for themselves - I think the issue was more one of transparency rather than accounting principals

The difference being that this has been published from an independent body that specialise in compliance within the contractor market. A supporting document should they need it.

LisaContractorUmbrella
20th February 2012, 13:30
The difference being that this has been published from an independent body that specialise in compliance within the contractor market. A supporting document should they need it.

True, it has been published by an independent individual who conducts compliance reviews who does not confirm that the practise is correct but does confirm that the issue has nothing to do with compliance.

seabro
20th February 2012, 20:27
I have heard back personally from the MD. He confirmed that not everyone is charged more than the published figures, which by default confirms some are. At this point he has not told me how they decide who pays extra nor how they calculate the extra.

I have emailed back the same two questions and hoping for some transparency in his reply. I will update you when I hear from him.

Wary
21st February 2012, 05:48
I can see why some umbrella companies are attempting to increase their income, following AWR they will probably have increased costs, but it should be up front.
Indeed ... and any additional charges should also be applied consistently across the board.

The Spartan
21st February 2012, 09:36
I got the standard Parasol response:

The amount retained by Parasol is detailed in your contract of employment. Payroll costs include, but are not restricted to, any payment of Basic Pay, employment costs (such as employers national insurance contributions) and pension contributions as well as any business expenses reimbursed by the Company.



Clause 3.1 confirms that whilst on assignment, you will be entitled to be paid basic pay for the hours that you work. For clarity, basic pay is a sum per hour at the rate of National Minimum Wage in force from time to time and not including any advance payment of PBA or Commission. I have attached a copy of your contract of employment.



Employment costs consist of Employers' National Insurance Contributions (NIC) which is currently calculated at 13.8%, employers National Insurance has always been an amount retained and this amount is sent on to the HMRC. Any additional amount of Employment Cost retained can vary, depending on whether you have a pension or claim business expenses.



I can confirm that Parasol are fully compliant with legislation and have not taken any payments from you unlawfully. The employment costs are non reimbursable, therefore we are unable to refund these to you.

Wary
22nd February 2012, 07:32
I got the standard Parasol response:

The amount retained by Parasol is detailed in your contract of employment. Payroll costs include, but are not restricted to, any payment of Basic Pay, employment costs (such as employers national insurance contributions) and pension contributions as well as any business expenses reimbursed by the Company.

Clause 3.1 confirms that whilst on assignment, you will be entitled to be paid basic pay for the hours that you work. For clarity, basic pay is a sum per hour at the rate of National Minimum Wage in force from time to time and not including any advance payment of PBA or Commission. I have attached a copy of your contract of employment.

Employment costs consist of Employers' National Insurance Contributions (NIC) which is currently calculated at 13.8%, employers National Insurance has always been an amount retained and this amount is sent on to the HMRC. Any additional amount of Employment Cost retained can vary, depending on whether you have a pension or claim business expenses.

I can confirm that Parasol are fully compliant with legislation and have not taken any payments from you unlawfully. The employment costs are non reimbursable, therefore we are unable to refund these to you.

So they didn't actually tell you anything other than to insist that these additional deductions are lawful, and are indeed related to expenses claimed & pensions contributions without giving the precise detail. (The pensions bit is interesting as someone previously said that they appear not to take 13.8% of this too, but their response suggests that maybe they do.)

Will you now take this to an Employment Tribunal? Remember that you have a 3-month deadline. I'm no legal expert but I would suggest that to be lawful, they'd have to demonstrate that these additional fees are reasonable, fair and transparent. How did they calculate that these additional "employment costs" equate to 13.8% of your expenses/pension? Why would someone who claims £200 in expenses effective cost their employer, in terms of their additional overheads, twice as much as someone who claims £100 in expenses? I thought these additional fees were to cover increased AWR costs; what has this to do with expenses/pensions?!? Why aren't these additional fees clearly stated on the payslip, rather than lumping them together with Employers NI and using a generic "Employment Costs" narrative to describe the combined amount.

Noticably absent from their response was an explanation of why they'd chosen this method/calculation to cover supposed additional "employment costs", as opposed to increasing the weekly fee, and why these deductions aren't being properly communicated to their employees ... A company with any integrity would surely welcome the opportunity to explain why they think this is a fair and reasonable method, rather than simply insisting it is technically legal.

What's your next step? I know what response I'd send to them if I were in your position.

The Spartan
22nd February 2012, 09:05
I contacted my solicitor after I received that response and asked her how we take this forward

Wary
22nd February 2012, 09:12
I contacted my solicitor after I received that response and asked her how we take this forward

What did she say?

Yehudi
22nd February 2012, 09:33
No need for a solicitor, submitting an employment tribunal claim just requires a simple form - give them all the facts in plain english and explain why you think it's unfair. Doesn't cost you a penny.
Employment Tribunal guidance (http://www.justice.gov.uk/guidance/courts-and-tribunals/tribunals/employment/index.htm)

As previously stated, there is a strict 3 month deadline for claiming. And you will have a stronger case if you show that you have attempted to resolve it with Parasol before making a claim (but don't let them dilly-dally past the deadline).

The Spartan
22nd February 2012, 10:05
What did she say?

She's going to get in touch with them today

Sarah2010
22nd February 2012, 11:52
They took my money and blame it on what they call 'employment costs'... never again with them.

Under this new Swedish model AWR 'thing' an Umbrella has to pay 50% of the salary for 4 weeks to an employee who finds themselves out of contract. Is this how Parasol are funding the extra cost?

The Spartan
22nd February 2012, 12:27
I believe this is so

Wary
22nd February 2012, 12:39
Under this new Swedish model AWR 'thing' an Umbrella has to pay 50% of the salary for 4 weeks to an employee who finds themselves out of contract. Is this how Parasol are funding the extra cost?

It would be interesting to know whether anyone has put this to the test as yet and whether they actually got paid. Maybe there's a clause in the contract that if interpreted loosely, means that they're legally not obliged to pay you this money ... or that some of your pay for the previous months included an element of this out-of-work pay up-front, and so you've already had it!

Wary
22nd February 2012, 20:10
Found some interesting posts from Steven@Parasol from June 2011 on
http://forums.contractoruk.com/umbrella-companies/68002-awr-swedish-model-will-i-pay-more.html

"we will be offering a full employment model based on the swedish derogation as part of our solution to the AWR and there will not be a significant increase to our fee. It might be pence not pounds and this is to cover the additional admin etc."

"We have made our decision to go down this route based on a risk analysis of our base. We have almost 9,000 contractors and the majority of them do not have significant gaps in between contracts so we have the financial strength to cover the pay between assignments when necessary."

"Pay between assignments lasts for up to four weeks so based on this risk analysis we've made a business decision that we can afford to honour this obligation without a significant increase to our fee."

"I've heard Lisa and our own CEO Rob make the point on numerous occaisions that the 'true correctly structured' umbrella companies are not far off from being compliant AWR solutions as they currently are."


So by his own admission, the introduction of AWR was only ever going to have a minor impact on them. So why are they now deducting significant amounts to cover this when by their own admission, the overheads should equate to just pence?!?

Spartan - you may wish to pass the above link to your solicitor.

Yil
22nd February 2012, 21:05
Well, I've had an ongoing (written) conversation with Parasol over the last few weeks regarding this where they have, not surprisingly, now agreed with me that they have taken these over-deductions to cover their implementation of AWR. In my case this adds up to a hefty 4 figure amount.

Having reviewed Being paid and payslips : Directgov - Employment (http://www.direct.gov.uk/en/Employment/Employees/Pay/DG_10027228) I have instructed Parasol to immediately refund all over-deductions incurred by myself.

If this refund is not forthcoming I will be initiating an employment tribunal process against them.

Wary
23rd February 2012, 04:40
Well, I've had an ongoing (written) conversation with Parasol over the last few weeks regarding this where they have, not surprisingly, now agreed with me that they have taken these over-deductions to cover their implementation of AWR. In my case this adds up to a hefty 4 figure amount.

Having reviewed Being paid and payslips : Directgov - Employment (http://www.direct.gov.uk/en/Employment/Employees/Pay/DG_10027228) I have instructed Parasol to immediately refund all over-deductions incurred by myself.

If this refund is not forthcoming I will be initiating an employment tribunal process against them.

So much for Steve's comments about it being "pence not pounds"!!!

How long will you give them before initiating an employment tribunal action against them?

I should imagine that they'd settle rather than risk this as it would likely go against them. Steve's own comments show that the level of deductions are well above their true AWR overheads, and that link you posted shows that their payslips are unlawful. In particular, it says that the payslip MUST contain "individual amount of any variable deductions (for example tax)". Clearly they're falling foul of this by lumping these additional deductions in with Employers NI and using a generic description to cover the two.

Wary
23rd February 2012, 07:26
Under this new Swedish model AWR 'thing' an Umbrella has to pay 50% of the salary for 4 weeks to an employee who finds themselves out of contract.

Is that correct? I thought they are only obliged to pay national minimum wage to cover this period?

LisaContractorUmbrella
23rd February 2012, 08:27
Is that correct? I thought they are only obliged to pay national minimum wage to cover this period?

It all depends how the salary arrangements with the umbrella company are structured - the legislation states 50% or at least minimum wage

Wary
23rd February 2012, 08:56
It all depends how the salary arrangements with the umbrella company are structured - the legislation states 50% or at least minimum wage

Interesting. Parasol's response to Spartan states "Clause 3.1 confirms that whilst on assignment, you will be entitled to be paid basic pay for the hours that you work. For clarity, basic pay is a sum per hour at the rate of National Minimum Wage in force from time to time and not including any advance payment of PBA or Commission."

Hence I should imagine that the best you'd get from Parasol would be National Minimum Wage, because of the clever way that they've set up the pay arrangements, although I'd guess they're not atypical compared to most other umbrellas from this perspective.

LisaContractorUmbrella
23rd February 2012, 09:02
Interesting. Parasol's response to Spartan states "Clause 3.1 confirms that whilst on assignment, you will be entitled to be paid basic pay for the hours that you work. For clarity, basic pay is a sum per hour at the rate of National Minimum Wage in force from time to time and not including any advance payment of PBA or Commission."

Hence I should imagine that the best you'd get from Parasol would be National Minimum Wage, because of the clever way that they've set up the pay arrangements, although I'd guess they're not atypical compared to most other umbrellas from this perspective.

The contractual arrangements that you describe are typical for umbrella companies

Waldorf
23rd February 2012, 10:07
Interesting. Parasol's response to Spartan states "Clause 3.1 confirms that whilst on assignment, you will be entitled to be paid basic pay for the hours that you work. For clarity, basic pay is a sum per hour at the rate of National Minimum Wage in force from time to time and not including any advance payment of PBA or Commission."

Hence I should imagine that the best you'd get from Parasol would be National Minimum Wage, because of the clever way that they've set up the pay arrangements, although I'd guess they're not atypical compared to most other umbrellas from this perspective.

I would have thought this would be worth taking to a tribunal if the umbrella only paid you at 50% of the minimum wage, if you can show that your income was higher than this.

I just cannot see how an umbrella can make this model pay without significant increase in fees from contractors. It seems some are using an insurance model on the basis that only a tiny % will actually need to be paid whilst out of contract - seems high risk to me?

LisaContractorUmbrella
23rd February 2012, 10:10
I would have thought this would be worth taking to a tribunal if the umbrella only paid you at 50% of the minimum wage, if you can show that your income was higher than this.

I just cannot see how an umbrella can make this model pay without significant increase in fees from contractors. It seems some are using an insurance model on the basis that only a tiny % will actually need to be paid whilst out of contract - seems high risk to me?

It would be min wage, not 50% of min wage so perfectly lawful - the problem comes if deductions are being made from the individual

Waldorf
23rd February 2012, 10:14
It would be min wage, not 50% of min wage so perfectly lawful - the problem comes if deductions are being made from the individual

Lisa, thanks for the correction, still min wage is still a lot less than most contractors would be earning.

If the deductions are being taken from the contractor, I take it that you agree that a claim would be possible at a tribunal? This is certainly the route I would take.

If deductions are not taken from the contractor and the umbrella funds these costs from their margin, I cannot see how this business model is viable.

Even if the out of contract pay is funded by the umbrella I would think it is worth a visit to a tribunal if this pay is a lot lower than what I was actually earning.

LisaContractorUmbrella
23rd February 2012, 10:17
Lisa, thanks for the correction, still min wage is still a lot less than most contractors would be earning.

If the deductions are being taken from the contractor, I take it that you agree that a claim would be possible at a tribunal? This is certainly the route I would take.

If deductions are not taken from the contractor and the umbrella funds these costs from their margin, I cannot see how this business model is viable.

Even if the out of contract pay is funded by the umbrella I would think it is worth a visit to a tribunal if this pay is a lot lower than what I was actually earning.

If an unlawful deduction has been made from an employees salary then that is certainly cause for complaint

Waldorf
23rd February 2012, 10:28
If an unlawful deduction has been made from an employees salary then that is certainly cause for complaint

Lisa, I think it is telling that you did not respond to my other points - even at the min wage, a 4 week break will cost the umbrella company more than a £1000 - I just cannot see how they can fund that from their fees.

Lisa, you must be relying on the basis that very few will claim, seems quite a risk.

Goatfell
23rd February 2012, 10:29
Interesting. Parasol's response to Spartan states "Clause 3.1 confirms that whilst on assignment, you will be entitled to be paid basic pay for the hours that you work. For clarity, basic pay is a sum per hour at the rate of National Minimum Wage in force from time to time and not including any advance payment of PBA or Commission."

Hence I should imagine that the best you'd get from Parasol would be National Minimum Wage, because of the clever way that they've set up the pay arrangements, although I'd guess they're not atypical compared to most other umbrellas from this perspective.

So they are saying that you are working for NMW?

Is the difference between your rate and NMW classed as "advance payment of PBA or Commission"?

How PBA can be paid in advance as part of your remuniration?

Sorry for all the questions, but this isn't something I've come across before, when I was working through a brolly gross was called "income from assignment", and net was "Salary". It looks like a scam to get round the requirement to pay at least 50% of the assignment pay or NMW, whichever is the greater for 4 weeks.

Or am I still (quite probably) missing something?

LisaContractorUmbrella
23rd February 2012, 10:35
Lisa, I think it is telling that you did not respond to my other points - even at the min wage, a 4 week break will cost the umbrella company more than a £1000 - I just cannot see how they can fund that from their fees.

Lisa, you must be relying on the basis that very few will claim, seems quite a risk.

Sorry, not intentional but I do have an umbrella company to run as well as posting on CUK :wink The legalities of operating a Swedish Derogation Contract are extremely complex and is high risk for the umbrella company as your processes have to be set up incredibly carefully but all brollies have had this responsibility for a number of years - it's nothing new as pay between assignments is a requirement of an overarching employment contract; to confirm any such payment is funded from the brolly's margin

ADRIANL
23rd February 2012, 10:54
There are 2 separate issues that are being discussed here.

Firstly, pay between assignments. Whilst people express outrage at Umbrellas not picking up the tab we need to look at the reality. Umbrella companies' charges average approximately £20 per worker per week. The average net profit of a successful Umbrella company would be 20%, therefore £4 per worker per week. If after 12 weeks (and it could be sooner) the worker has a period between assignments the minimum liability would be 4 weeks of NMW, or approximately £1000. Therefore profit earnt £48, PBA payout £1000. No-one can run a business on this basis. The end users or the agencies should be footing the bill but refuse to do so, simply passing the liability down to the Umbrella. Hence any sane Umbrella company (like us at planIT) will have to avoid this liability. It may be unpalatable but it is the truth. I have been in this business for 16 years and seen the litany of failed Umbrella companies who thought they could "buy" business. It doesn't work.

Secondly, Employers costs. Since Parasol are a competitor,I would be interested to see the outcome of any employment tribunal, but I am pretty confident they would win. A payslip needs to show tax and national insurance that is deducted from wages. Employers NI is not deducted from wages - look at any payslip from any employer in the country, Employers NI won't feature. What most Umbrellas do is give you a reconiciliation between what they receive (for your services) and what they pay you as wages. The Employers NI is within that reconcilation but there is no legal obligation to provide that detail at all. The fact that Employers costs may be greater than just Employers NI could be construed as misleading - if a worker was told that Employers costs did comprise solely Employers NI - but I would suggest that this is not the case. At the end of the day the Umbrella can take whatever margin it chooses, if the worker agrees to those contractual terms.

Wary
23rd February 2012, 12:21
ADRIANL – thanks for your interesting take on this, in particular the legality of what Parasol are doing.

Re your first point, I’m from a breed of contractors who feels that I should pay for my own time off; I wouldn’t expect or indeed want someone else to foot the bill out of their own pocket. I fully understand and accept why an Umbrella would want to minimise these additional costs and also pass them on to their contractors in order to operate a viable business model.

The issue people have with Parasol (and they’re not the only ones) is that it is not being done in a fair, consistent or transparent manner, and according to Parasol’s own predictions back in June, these additional deductions would appear to be way in excess of their true additional overheads. They could easily have just increased their fee instead, which in order to cover their AWR costs would be “pence not pounds”. Regardless of the technical legalities, surely there’s a moral issue here too?

Can I ask how your company are covering these additional overheads? Are you arbitrarily levying additional charges based on expenses Parasol-style, have you increased your fee or are you simply taking the hit?

Nixon Williams
23rd February 2012, 12:56
Firstly, pay between assignments. Whilst people express outrage at Umbrellas not picking up the tab we need to look at the reality. Umbrella companies' charges average approximately £20 per worker per week. The average net profit of a successful Umbrella company would be 20%, therefore £4 per worker per week. If after 12 weeks (and it could be sooner) the worker has a period between assignments the minimum liability would be 4 weeks of NMW, or approximately £1000. Therefore profit earnt £48, PBA payout £1000. No-one can run a business on this basis. The end users or the agencies should be footing the bill but refuse to do so, simply passing the liability down to the Umbrella. Hence any sane Umbrella company (like us at planIT) will have to avoid this liability. It may be unpalatable but it is the truth. I have been in this business for 16 years and seen the litany of failed Umbrella companies who thought they could "buy" business. It doesn't work.

Adrian

As you know we do not operate an umbrella company but your description is also my understanding. I cannot see how an umbrella can fund this cost from its margin.

I understand that some umbrella companies had planned to get around these rules by simply funding pay of just 1 hour per week, I can see that amount could be funded from margin, but not the new legally required amount of 4 weeks NMW.

Alan

ADRIANL
23rd February 2012, 14:00
Wary

At planIT we are doing the following:

1. We are happy to work on a match permanent pay basis if the end user is paying enough, after agency and our margins, and can demonstrate the same. Unfortunately at the lower end of the market this is not happening.

2. With a derogated contract we are advancing an element of pay between assignments, on a similar basis to rolled up holiday pay. The difficulty here is knowing how much to prepay. In actual fact you can only know with the benefit of hindsight which, even at planIT, we don't have! Therefore we will be left with an exposure.

3. The exposure is partly self insured and partly provided for within Employers costs. It would of course be easier just to increase our fees but, unfortunately,unless our competitors did likewise we would be accused of being "overpriced" and lose market share.

4. The main part of our business, Personal Service Companies, continues to expand as a result of agencies and contractors wanting to sidestep all of these issues.

LisaContractorUmbrella
23rd February 2012, 14:57
Adrian

As you know we do not operate an umbrella company but your description is also my understanding. I cannot see how an umbrella can fund this cost from its margin.

I understand that some umbrella companies had planned to get around these rules by simply funding pay of just 1 hour per week, I can see that amount could be funded from margin, but not the new legally required amount of 4 weeks NMW.

Alan

I can confirm, just for the record, that we don't operate a 1 hour or zero hour contract

Nixon Williams
23rd February 2012, 15:27
I can confirm, just for the record, that we don't operate a 1 hour or zero hour contract

No, but some of your competitors were considering this as an option to get around the AWR rules.

LisaContractorUmbrella
23rd February 2012, 15:30
No, but some of your competitors were considering this as an option to get around the AWR rules.

They certainly were NW and I think a few of them decided it was a good idea :frown

Wary
24th February 2012, 07:11
3. The exposure is partly self insured and partly provided for within Employers costs. It would of course be easier just to increase our fees but, unfortunately,unless our competitors did likewise we would be accused of being "overpriced" and lose market share.

I presume from this that planIT is taking additional money from their contractors as "Employer Costs" above & beyond the weekly fee? If so, how is this calculated and how are these additional deductions communicated to your employees - e.g. how is it depicted on the payslip? Is it combined with Employers NI as a single "Employer Costs" entry?

ADRIANL
24th February 2012, 10:03
We are actually in the process of changing our systems for the new tax year. At the moment we have 2 solutions but going forward we will have one whereby the Employers costs can be flexed to make a provision for extra statutory costs where there is considered to be a risk. In many cases there will be no provision.
Each client is taken on by a Client Advisor who runs through a live Personal Illustration. The CA has discretion on "fees" and provisions and obviously the client has to effectively agree the net take home pay before proceeding.
I am still considering additional disclosure, albeit we have to be aware of the total absence of transparency from many competitor companies and a general lack of understanding within the industry as a whole.

original PM
24th February 2012, 13:45
It has been a while since I have been involved in brollies so things may have changed but is it not the case that

1) When you are employeed by a brolly your permanant place of work is the brollies head office.
2) Therefore based on 1 you can claim expenses for your travel to and from where you actually perform the contract as it is not legal to claim travel expenses to your permanent place of work (thus the 2 year rule in which case your contract place of work becomes classed as your permanent place of work and so you can no longer claim the travel expenses)
3) If therefore you are between contracts in order to be paid you would actually have to turn up at the brollies head office - who would be olbliged to pay you minimum wage for any hours worked - as there is also no job description attached to your contract of employment with the brolly they could legitimately put you to work doing anything for them.
4) Given that 3 is highly unlikely to happen therefore there is said to be an unwritten agreement between you and the brolly that you are taking unpaid leave (which is perfectly legal if both parties agree) and so the liability for the brolly to pay you when you are not on contract becomes a mute point (unless you really want to turn up on their doorstep and clean the loos!)

So it would seems that while any increase in fees could be seens as covering them in this eventuality the reality is the brolly knows they are pretty safe and so it is just a bit of extra profit for them. However as they are taking this 'profit' out of the money which they earn from the agency for the work you have done and the brolly ensure they pay you minimum wage for the hours earned it is unlikely they are doing anything illegal. You could argue that it is morally wrong but since when was that a reason for people not to rip other people off?

But as I say I am a year or two out of touch...

fred857
26th February 2012, 22:16
Have received my payslip after Parasol promised to reimburse me, which they have done fully for the monthly overcharges since October last year. The Employment Costs are now correctly calculated based on 'er NI and pension contributions only - with no extra charges, I REPEAT...no extra charges!

I don't know if Parasol have put things right just for me 'cos I complained, or for everybody. I would urge Parasol clients to check their payslips and raise it with them if not.

LisaContractorUmbrella
5th March 2012, 13:35
It has been a while since I have been involved in brollies so things may have changed but is it not the case that

1) When you are employeed by a brolly your permanant place of work is the brollies head office.
2) Therefore based on 1 you can claim expenses for your travel to and from where you actually perform the contract as it is not legal to claim travel expenses to your permanent place of work (thus the 2 year rule in which case your contract place of work becomes classed as your permanent place of work and so you can no longer claim the travel expenses)
3) If therefore you are between contracts in order to be paid you would actually have to turn up at the brollies head office - who would be olbliged to pay you minimum wage for any hours worked - as there is also no job description attached to your contract of employment with the brolly they could legitimately put you to work doing anything for them.
4) Given that 3 is highly unlikely to happen therefore there is said to be an unwritten agreement between you and the brolly that you are taking unpaid leave (which is perfectly legal if both parties agree) and so the liability for the brolly to pay you when you are not on contract becomes a mute point (unless you really want to turn up on their doorstep and clean the loos!)

So it would seems that while any increase in fees could be seens as covering them in this eventuality the reality is the brolly knows they are pretty safe and so it is just a bit of extra profit for them. However as they are taking this 'profit' out of the money which they earn from the agency for the work you have done and the brolly ensure they pay you minimum wage for the hours earned it is unlikely they are doing anything illegal. You could argue that it is morally wrong but since when was that a reason for people not to rip other people off?

But as I say I am a year or two out of touch...

Definitely shouldn't be any ripping off going on if everything is being operated correctly - the umbrella company should be deducting nothing other than their margin and their employer's NI obligation from the B2B agreed rate before processing the gross salary for the individual. Although a deduction may be made for holiday pay this is reimbursable either when the individual takes holiday or at the end of the year - none of it should be retained by the umbrella company.

HTH

Feud
30th April 2012, 14:01
Have received my payslip after Parasol promised to reimburse me, which they have done fully for the monthly overcharges since October last year. The Employment Costs are now correctly calculated based on 'er NI and pension contributions only - with no extra charges, I REPEAT...no extra charges!

I don't know if Parasol have put things right just for me 'cos I complained, or for everybody. I would urge Parasol clients to check their payslips and raise it with them if not.

Thanks for relating your experiences. I'm new to all this and was "interested" to find that they had taken almost as much in "Employment costs" as I'd paid in tax -- with minimal explanation anywhere.

I'll let you know when and if I hear back from them.

Cheers

Feud
30th April 2012, 14:02
There's a few people on here who been screwed by Parasol's "Employment Costs" the best thing to do is leave and spread the word to anyone else who uses their service

Thanks - probably exactly what I'M going to do as well.

gitanak
29th November 2014, 18:33
Im as well very annoyed by Parasol employment cost deductions!

That's what they say in the email they sent to me:

Parasol will make the necessary deductions from your pay. These deductions are your tax and National Insurance contributions, the Parasol margin of £27.50 per week, and we also retain an amount to cover ‘Employment Costs’.

Employment costs cover Employers' National Insurance Contributions (NIC) which is currently calculated at 13.8%. We calculate this once we have deducted expenses, the margin and the Employers’ NIC free allowance of £153.00 as you’re on a weekly pay period.

Then i spoke to them on the phone and they explained that everyone charge that when you are umbrella company employee and this money is being charged by HMRC and not PARASOL!

Did anyone had some help and how to resolve this!!!!

Many thanks for your help!

Archangel
29th November 2014, 19:43
Did you not expect to pay tax & national insurance?

cojak
30th November 2014, 08:42
Indeed. Gitanak received just under 63% from his total, which is around average for umbrellas I believe.

I don't know how expensive Parasol is commision-wise, but that is the only area where they differ. EVERY reputable umbrella will subtract NI and tax (and pass it onto HMRC, obv...)

LisaContractorUmbrella
1st December 2014, 08:16
Im as well very annoyed by Parasol employment cost deductions!

That's what they say in the email they sent to me:

Parasol will make the necessary deductions from your pay. These deductions are your tax and National Insurance contributions, the Parasol margin of £27.50 per week, and we also retain an amount to cover ‘Employment Costs’.

Employment costs cover Employers' National Insurance Contributions (NIC) which is currently calculated at 13.8%. We calculate this once we have deducted expenses, the margin and the Employers’ NIC free allowance of £153.00 as you’re on a weekly pay period.

Then i spoke to them on the phone and they explained that everyone charge that when you are umbrella company employee and this money is being charged by HMRC and not PARASOL!

Did anyone had some help and how to resolve this!!!!

Many thanks for your help!

When you work with an umbrella company, you are their employee which means that your earnings are subject to PAYE - Income Tax and Employee's National Insurance. As they are your employer they are legally obliged to pay Employer's National Insurance which will be deducted from the contract value, along with the umbrella company margin, before your salary is calculated. The other thread that you started states that you previously had your own Ltd Co - the tax and NI position working with an umbrella company is pretty much the same as if you were working through your own Ltd inside IR35.

gitanak
1st December 2014, 11:34
When you work with an umbrella company, you are their employee which means that your earnings are subject to PAYE - Income Tax and Employee's National Insurance. As they are your employer they are legally obliged to pay Employer's National Insurance which will be deducted from the contract value, along with the umbrella company margin, before your salary is calculated. The other thread that you started states that you previously had your own Ltd Co - the tax and NI position working with an umbrella company is pretty much the same as if you were working through your own Ltd inside IR35.

Many thanks for your answers. Im enquiring about the EMPLOYMENT COST. I was charged NI, Income tax and Parasol Margin, which is correct, plus EMPLOYMENT COST(which Parasol Claim is for NI)? Why am i paying twice for NI? Parasol says that Employment cost is always charged if you work through umbrella company, which is not correct as im not charged this fee when i was working for another agency.

stek
1st December 2014, 11:45
Many thanks for your answers. Im enquiring about the EMPLOYMENT COST. I was charged NI, Income tax and Parasol Margin, which is correct, plus EMPLOYMENT COST(which Parasol Claim is for NI)? Why am i paying twice for NI? Parasol says that Employment cost is always charged if you work through umbrella company, which is not correct as im not charged this fee when i was working for another agency.

It's quite simple, the employment cost is the Employers NI cost which the Brolly recover from the daily rate. You have to pay Employers and Employees NI from the daily rate, that's normal.

TheFaQQer
1st December 2014, 11:48
Many thanks for your answers. Im enquiring about the EMPLOYMENT COST. I was charged NI, Income tax and Parasol Margin, which is correct, plus EMPLOYMENT COST(which Parasol Claim is for NI)? Why am i paying twice for NI? Parasol says that Employment cost is always charged if you work through umbrella company, which is not correct as im not charged this fee when i was working for another agency.

Someone has to pay employers NI. In the case of an umbrella company, this is deducted from your invoice value and you pay it; in the case a a limited company, you normally don't have a salary that high, but if you do then your employer pays it.

If you were working via an agency, then they would have paid the employers NI - the fact that they did it from their margin rather than your rate implies that they were making shed loads from you to be able to afford it in the first place.

TykeMerc
1st December 2014, 11:49
Many thanks for your answers. Im enquiring about the EMPLOYMENT COST. I was charged NI, Income tax and Parasol Margin, which is correct, plus EMPLOYMENT COST(which Parasol Claim is for NI)? Why am i paying twice for NI? Parasol says that Employment cost is always charged if you work through umbrella company, which is not correct as im not charged this fee when i was working for another agency.

National Insurance has 2 components:-

Employees NI which you're used to seeing on payslips

Employers NI which unless you're working via an Umbrella you don't see (it's hidden, but paid), but is paid by your employer. Your employer funds that by the money they make from you being an employee.

Because you're using an Umbrella company and they EMPLOY you they are REQUIRED to pay Employers NI, that has to be funded from somewhere, that somewhere is the contract rate that the client or agent is paying you.

ANY Umbrella you worked this contract through would HAVE to pay the Employers NI and they take the money to pay that from the rate, they do tell you about it on their payment advice, will discuss it if asked and don't make a secret of the fact.

You really need to read what people have said on this thread (and many others on CUK) mid 60% retention via Umbrella is fairly average.

SueEllen
1st December 2014, 12:29
National Insurance has 2 components:-

Employees NI which you're used to seeing on payslips

Employers NI which unless you're working via an Umbrella you don't see (it's hidden, but paid), but is paid by your employer. Your employer funds that by the money they make from you being an employee.


When an employer quotes a salary they have already taken off the cost of the employers NI they would be paying to employ you.

gitanak
1st December 2014, 12:32
Ok, many thanks for all replies. Now it makes sense. Its actually very sad and ridiculously disappointing, how much is being deducted from poor people salary!

LisaContractorUmbrella
1st December 2014, 13:03
Ok, many thanks for all replies. Now it makes sense. Its actually very sad and ridiculously disappointing, how much is being deducted from poor people salary!

How have you been receiving payment up until now??

88zero
9th June 2015, 13:58
A shame they don't tell you about this hidden cost when you ask for an estimate on your net pay :mad:

Their solution is to claim more in expenses to offset against the national insurance.

I shall be going back to Giant after this whoa re much more straight forward and have no hidden costs.

Andy Hallett
9th June 2015, 20:16
A shame they don't tell you about this hidden cost when you ask for an estimate on your net pay :mad:

Their solution is to claim more in expenses to offset against the national insurance.

I shall be going back to Giant after this whoa re much more straight forward and have no hidden costs.

I'd be amazed if any legit brolly was able to offer you a better return. Both Parasol and Giant fit that category.

LisaContractorUmbrella
10th June 2015, 06:29
A shame they don't tell you about this hidden cost when you ask for an estimate on your net pay :mad:

Their solution is to claim more in expenses to offset against the national insurance.

I shall be going back to Giant after this whoa re much more straight forward and have no hidden costs.

When you say 'they', who are you referring to?? If it's an umbrella company they should certainly not be suggesting or orchestrating the claiming of extra 'expenses' if the costs haven't been incurred. ANY umbrella company that you contact should give you the same take home pay provided that you give them the same information each time on your rate and expenses incurred; the only difference should be any variance in their margin. Unfortunately some umbrella companies try to make their take home figure look better by including expenses in the calculation which have not been incurred - this may entice you through the door but you will definitely be in for disappointment when you open your first pay slip!

If there's one thing that an umbrella company should not be using as a marketing tool, it's the offer to 'increase' or 'maximise' your take home pay - if they're operating compliantly they can't it's as simple as that.

88zero
11th June 2015, 10:03
I'd be amazed if any legit brolly was able to offer you a better return. Both Parasol and Giant fit that category.

With Giant there's no additional 'Employment costs', only their margin.

thiswasmethen
8th August 2015, 00:37
Sweet, me too

Hi Spartan

I like you fell for the old Parasol B/S and have been ripped off it seems... Having contacted them I was amazed to find out the full extent of their tactics. They refuse to provide original voice recordings of my original call describing the their breakdown. After raising a complaint and grievance, they then added a contract to my profile without knowledge or consent, saying I accepted it. However, I took a screen shoot of my profile with them, when it did not contain a contract. Can you tell me if you managed to recover the employment costs from them and did you have to take them to court in order for them to pay? did they refuse to pay your wages as a result of you requesting a refund?

Thank you for sharing your insight on this company

thanks
thiswasmethen

skimpy
4th November 2015, 10:21
Good thing I found this thread about Parasol.
That's them off my list.

LisaContractorUmbrella
6th November 2015, 14:55
I'd be amazed if any legit brolly was able to offer you a better return. Both Parasol and Giant fit that category.

A legit brolly can offer no better return than any other - only difference in take home pay between 2 brollies should be down to their margin and nothing else.

ASB
6th November 2015, 17:54
A legit brolly can offer no better return than any other - only difference in take home pay between 2 brollies should be down to their margin and nothing else.

Muddying the waters: surely it is theoretically possible that different umbrellas could be using scale rates for expenses and have a legitimately agreed higher scale rate than another.

LisaContractorUmbrella
9th November 2015, 07:42
Muddying the waters: surely it is theoretically possible that different umbrellas could be using scale rates for expenses and have a legitimately agreed higher scale rate than another.

Scale rates are only permitted for subsistence expenses and the rules are pretty clear - breakfast and dinner are only allowable in exceptional circumstances unless the contractor is staying away from home and staying in hotel so any difference really would be negligible

midlandlass
18th November 2015, 19:03
Also worth noting that if you are in rented or a b&b with access to cooking facilities the breakfast and dinner may not be allowable either!

fred857
4th January 2017, 22:17
I left Parasol shortly after starting this thread back in 2012.

I decided to go the limited company route instead of going with another umbrella co. I've used InTouch since for my accounting and have had a good experience. I would recommend them if asked.