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New contractor help

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    New contractor help

    Hello

    Firstly apologies if my question has already been posted

    I am new to contracting ans got a new contract with public sector via a recruiting agency.

    The contract is within IR35 and the agency outsource uk cannot allow me to use a limited company ( the software they have doesnt support apparently) so im stuck with 5 umbrella companies they have on a list .

    My question is umbrella pay is 8991 Month and after déductions, apprentice levy, ni , tax take home is 5293 per month .

    Are there any ways to increase earnings ?. As it seems excessive the amount been taken .

    #2
    You are getting 58% take home after tax and deductions.

    If you want more money you are going to need to find a contract that is outside of IR35 and use a Ltd.

    Changing to another legitimate umbrella may increase your take home by 1 or 2% but that is about it.

    Do not go to any umbrella promising you more than this as you will get into to tax trouble with HMRC.

    Basically if you want more money, find a contract that pays you more money.
    "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
      Just to reiterate this point:
      Originally posted by cojak View Post
      DO NOT go to any umbrella promising you more than this as you will get into to tax trouble with HMRC.
      ---

      Former member of IPSE.


      ---
      Many a mickle makes a muckle.

      ---

      Comment


        #4
        As others have said, this is what you'll get. The one thing you can do is to put funds into a pension via Salary Sacrifice (different Umbrellas have different offerings) - that will save tax and NI. There's dozens of posts on the Umbrellas board about it - just do a search.

        Comment


          #5
          Thanks All very helpful.

          Crazy that the government takes so much , afterall with contract it has end date, you dont have many of the benefits and security of standard employment etc.

          Is contracting still a lucrative despite government taking so much for most people on here ?

          Comment


            #6
            Originally posted by Mangobongo View Post
            Thanks All very helpful.

            Crazy that the government takes so much , afterall with contract it has end date, you dont have many of the benefits and security of standard employment etc.

            Is contracting still a lucrative despite government taking so much for most people on here ?
            At the moment with gigs like hens teeth and the IR35 looming again next year? No. Worst period for contracting since it probably became a thing. Those making anything like they did last year are the very lucky ones at the moment IMO.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              As mentioned you may get a bit more, most umbrellas will give you a quote although when your payslip arrives it often leaves a lot to be desired.

              There are lots of online PAYE/NI calculators but most arnt designed with contractors in mind (they may or may not show Employers NI), you can get Brightpay software free trial which I found useful.

              Also worth noting that most calculations assume that your £8k a month will be your full annual salary (i.e 8 x 12 = 96k), if you only work one month this year you wont owe any PAYE or NI, so a refund will be due also if you only work 4 months then it will be quite different as youll be below the 40% paye threshold.

              As mentioned a Pension Salary sacrifice will help, whether your brolly will do it has been discussed, pre IR35 change I was about to go down this route and found my brolly Parasol could do monthly pension SS.

              Its not quite true to say you cant use a Ltd Co...you can get paid into a Ltd..the money you receive will already be Net (i.e paye n NI deducted) but its hard to see any real benefit to this.

              Comment


                #8
                Originally posted by Mangobongo View Post
                Thanks All very helpful.

                Crazy that the government takes so much , afterall with contract it has end date, you dont have many of the benefits and security of standard employment etc.

                Is contracting still a lucrative despite government taking so much for most people on here ?
                Bit odd to say the gov takes so much, its pretty much the same for all perms/inside IR35....yes there are no real benefits but you are back to the IR35 argument and as rightly pointed out by the House of Lords report.

                Comment


                  #9
                  Originally posted by andydd68 View Post
                  As mentioned you may get a bit more, most umbrellas will give you a quote although when your payslip arrives it often leaves a lot to be desired.

                  There are lots of online PAYE/NI calculators but most arnt designed with contractors in mind (they may or may not show Employers NI), you can get Brightpay software free trial which I found useful.

                  Also worth noting that most calculations assume that your £8k a month will be your full annual salary (i.e 8 x 12 = 96k), if you only work one month this year you wont owe any PAYE or NI, so a refund will be due also if you only work 4 months then it will be quite different as youll be below the 40% paye threshold.

                  As mentioned a Pension Salary sacrifice will help, whether your brolly will do it has been discussed, pre IR35 change I was about to go down this route and found my brolly Parasol could do monthly pension SS.

                  Its not quite true to say you cant use a Ltd Co...you can get paid into a Ltd..the money you receive will already be Net (i.e paye n NI deducted) but its hard to see any real benefit to this.
                  NB there are no refunds on NI just tax

                  Comment


                    #10
                    Originally posted by fidot View Post
                    NB there are no refunds on NI just tax
                    Not quite true but its not a simple process like PAYE - How to claim a National Insurance refund | AccountingWEB

                    Comment

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