PAYE and NIC paid by agency - double taxation? PAYE and NIC paid by agency - double taxation?
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  1. #1

    Nervous Newbie

    Join Date
    Nov 2019

    Default PAYE and NIC paid by agency - double taxation?

    Under the new rules, PAYE and NIC have to be deducted by the paying entity - either umbrella company or agency.

    It's my understanding that subsequent payments from my Personal Services Company (PSC) must be as PAYE, and not dividends.

    So now we have the payment flow of client->agency (PAYE and NIC deducted)->PSC

    It seems that I'm going to be taxed twice if I have to withdraw funds from the PSC only via PAYE.

    What am I missing? Or aren't I missing anything?

  2. #2

    Fingers like lightning

    GhostofTarbera's Avatar
    Join Date
    May 2018


    The employer Ni comes out of your rate

    Payroll company can’t pay your NI as they get like £30 a month from you

    You pay it

    You pay it

    Not fair, we have known this for years

    Sent from my iPhone using Contractor UK Forum

  3. #3

    More time posting than coding

    Join Date
    Oct 2019


    You're not going to be double-taxed. If you operate via an umbrella then your own company won't be involved at all - the umbrella will simply pay you personally the net proceeds, after PAYE deductions (including both employer and employee NI) and their fee.

    In the unlikely situation that you are in an inside IR35 role and get an agency to pay your company (rather than yourself) net of all PAYE deductions, you don't need to pay further tax and NI when taking this out of the company. But there's no point really - just use an umbrella.

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