Tax return advice - part umbrella, part freelance Tax return advice - part umbrella, part freelance
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  1. #1

    Nervous Newbie


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    Mar 2018
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    Question Tax return advice - part umbrella, part freelance

    Hi

    Not sure if anyone can advise me, I work on a freelance basis for a few companies, in the middle of which I was offered some agency contract work.

    I use an Umbrella as I don't have a Limited company; the work is in 4 hour stints and can vary from nothing in a month to working 2 to 3 days a week for weeks (all from home). I also have a few other sporadic activities which are freelance and included in my tax returns - I have professional indemnity insurance for this - plus am covered by the umbrella company.

    I'm on a BR tax code with the Umbrella company, although may change this if the work continues and increases - the company take quite a sizeable chunk on a good month before deducting tax and (where applicable) NI.

    I'm after some advice as to how to deal with this on my tax return - all my income and expenditure is on a cash basis - I don't earn a fortune - being disabled and not in a position to work away from the home for long periods any more, I take what I can get basically.

    There are no Dividends because I'm not a director - so they take a chunk out of my gross income for fees and pension, then deduct tax and NI from the remaining amount.

    For the purposes of the tax return, is the money the umbrella company take off me (before tax and NI) redundant?

    Also, some of the software and equipment I use cover's both sets of work.

    I claim no expenses through the umbrella company

    Hope the above makes sense

    TIA

  2. #2

    Respect my authoritah!

    NotAllThere's Avatar
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    The work you do through the umbrella is PAYE - you are just an employee. Your declarable income is the money you get + the income tax and employees NI that the brolly remit to HMRC. You should get a P60 and P11d from the brolly with all the relevant details on them.
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  3. #3

    Nervous Newbie


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    Quote Originally Posted by NotAllThere View Post
    The work you do through the umbrella is PAYE - you are just an employee. Your declarable income is the money you get + the income tax and employees NI that the brolly remit to HMRC. You should get a P60 and P11d from the brolly with all the relevant details on them.
    Thanks - I understand that I'm an "employee" of the company - no P11D as no claimable expenses - so everything else would be incorporated into my freelance work - and the surplus the umbrella company cream off doesn't really exist?

  4. #4

    Fingers like lightning


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    Make sure this is a true "umbrella" and that you are employed under a contract of employment, some companies I have seen are declaring themsleves as a brolly and then treating the contractors as self-employed.
    If you are a true employee, then come year end, you will receive a P60 which you can then use to complete your tax return and it will simply be listed as declared earned income with no additional taxes due.

    HTHs

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