Help with tax please

**One Click Group** · 31 October 2013, 09:04

If you're working through an umbrella company you will be taxed on a PAYE basis. The umbrella company will pay you net of tax and NI (assuming they are a UK based compliant umbrella company) so there should not be any additional tax liability at the end of the Tax Year.

Without knowing exactly what you are being reimbursed for, it's difficult for me to comment on the way your expenses would be treated by the umbrella. In general terms though, you may be able to offset some of the expenses you incur that are not covered by the expense allowance that the client pays you.

I would suggest you speak to an umbrella company and they can give you some guidance (perhaps the one you are using might be able to help?......).

**LisaContractorUmbrella** · 31 October 2013, 09:11

Originally posted by ajk View Post

Hi all , since leaving the forces after serving 11 years (army) I have been working on contract after contract in the oil and energy industry , until now I have always worked Paye but recently I started for an agency who is paying me through an umbrella company as a ltd company, but I havnt got a ltd company (yet) so I havnt paid any tax or NI. Do I need to keep 20% of my weekly wage for tax at the end of the tax year? How do I pay NI ? I travel all over the country and stay in lodgings for which I am given a lodge allowance weekly on top of my pay, can I claim for any mileage or meal allowance ?? Sorry for all the questions just trying to get my head around it all , thanks ...andy

Have you signed a contract of employment with an umbrella company? An umbrella company is your employer, they will raise invoices for the work that you do to your agency and then will pay you through PAYE when those invoices are paid. If a LTd Co were to be set up for you by the umbrella company and they were to raise invoices for you and pay you in dividends they would be contravening the MSC legislation.

Have you received any money from anyone yet or submitted any timesheets to anyone??

**Contreras** · 31 October 2013, 09:54

Originally posted by ajk View Post

Hi all , since leaving the forces after serving 11 years (army) I have been working on contract after contract in the oil and energy industry , until now I have always worked Paye but recently I started for an agency who is paying me through an umbrella company as a ltd company, but I havnt got a ltd company (yet) so I havnt paid any tax or NI. Do I need to keep 20% of my weekly wage for tax at the end of the tax year? How do I pay NI ? I travel all over the country and stay in lodgings for which I am given a lodge allowance weekly on top of my pay, can I claim for any mileage or meal allowance ?? Sorry for all the questions just trying to get my head around it all , thanks ...andy

The agency doesn't want PAYE employees and wants to contract you via a Ltd Co. - fine.

Either you set up your own Ltd Co., and that would be your employer.

Or you contract via an umbrella co., and they would be your employer.

Not both.

If it's via your own Ltd Co. then it's up to you (and your accountant) to decide how best to pay salary + dividends from your Ltd Co. to you.

If it's via an Umbrella then they should have provided you a payslip detailing the salary, tax & NI.

Have you been provided a payslip? - If not then ask for one and see what they say.

**ajk** · 31 October 2013, 11:54

I have pay slips, the umbrella company takes £15 pound and pays me gross, also there's a £4.95 taken off for contractors benefits ??, is it complicated to set up a ltd company ? The only expenses I incur would be mileage and the use of my own car , I keep a note of all mileage I do to and from different post codes , would I give this information to the accountant ? Is there anything else I can claim for ie Mot's , meal allowance etc and would I need receipts for these ? Thanks again

**LisaContractorUmbrella** · 31 October 2013, 13:26

Originally posted by ajk View Post

I have pay slips, the umbrella company takes £15 pound and pays me gross, also there's a £4.95 taken off for contractors benefits ??, is it complicated to set up a ltd company ? The only expenses I incur would be mileage and the use of my own car , I keep a note of all mileage I do to and from different post codes , would I give this information to the accountant ? Is there anything else I can claim for ie Mot's , meal allowance etc and would I need receipts for these ? Thanks again

So the umbrella company is taking £19.95 per week from you for doing absolutely nothing?? I would suggest that you move to another umbrella company that will take responsibility for paying you through PAYE and will therefore be responsible to deducting your tax and NI payments or set up your own Limited Company and invoice the agency directly - employ a good accountant and pay your taxes direct to HMRC. You will need to consider IR35 as this will have an impact if you are inside IR35 and have your own Ltd.

**moggy** · 31 October 2013, 13:26

Originally posted by ajk View Post

I have pay slips, the umbrella company takes £15 pound and pays me gross, also there's a £4.95 taken off for contractors benefits ??, is it complicated to set up a ltd company ? The only expenses I incur would be mileage and the use of my own car , I keep a note of all mileage I do to and from different post codes , would I give this information to the accountant ? Is there anything else I can claim for ie Mot's , meal allowance etc and would I need receipts for these ? Thanks again

So the umbrella company charge you £15 then pay you gross? doesn't sound right to me, what do you get for this service? are you sure they are not deducting tax and ni?

**northernladuk** · 31 October 2013, 13:34

Originally posted by moggy View Post

So the umbrella company charge you £15 then pay you gross? doesn't sound right to me, what do you get for this service? are you sure they are not deducting tax and ni?

My first guess would be OP hasn't fully understood, got the grasp or communicated the situation to us properly.

**LisaContractorUmbrella** · 31 October 2013, 13:37

Originally posted by northernladuk View Post

My first guess would be OP hasn't fully understood, got the grasp or communicated the situation to us properly.

Or he's come across a really dodgy umbrella company

**northernladuk** · 31 October 2013, 13:38

Originally posted by LisaContractorUmbrella View Post

Or he's come across a really dodgy umbrella company

You mean there are some that aren't?

Help with tax please