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Previously on "Offered new contract. Told it has to be PAYE or Umbrella. Which should I choose?"
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300pd will give you 160 after tax (no expenses remember)
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Originally posted by NotAllThere View PostTake agency PAYE. Then, if the agency goes bust, you're one of the first in the queue for payment.
One less link in the chain as well.
I presume that the PAYE option involves OP not having to pay employer NICs or apprentice levy.
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Take agency PAYE. Then, if the agency goes bust, you're one of the first in the queue for payment.
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Offered new contract. Told it has to be PAYE or Umbrella. Which should I choose?
Hi all, I have searched the forums but haven't been able to find information that will help answer my query, so I hope that you can help.
I had been contracting with my LTD company for the past 10 years in various UK organisations all outside IR35. All was going well but as a result of the HMRC IR35 reforms, I lost my contract in January 2020 and then Covid happened, so I've been out of work! I now have good news in that an organisations via the recruitment agency Reed want to offer me a new 6 month contract starting in August 2020 but they have stated that it has to be inside IR35 and therefore either via an Umbrealla or PAYE through the agency.
My query is that as I have the choice of using either an umbrealla, or going via Reed's paye, which do I choose? They have suggested that they can pay either 300pd via the paye or 330pd via umbrella. I am assuming the umbrealla route is better but they have said that if I choose the paye option, then I would also be given paid leave (13 days as part of this), and that apparently either option will result in me taking home about the same amount of money, by the end of the contract.
Please also note that I will be continuing to operate my LTD company, as I have one associate that works through my LTD company, and I also will be looking to secure an outside IR35 contract for myself after this contract finishes in 6 months time.
I have also read on the forum that for some people, using an umbrella company that will also you to pay into a pension before tax is possible but I am unsure if this is a benefit for me, as I already have a SIPP pension that I will be able to invest into via my LTD company for this year.
Thank you for any help that you can provide. Really appreciate all of the support that occurs on this forum.
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