My umbrella company sets up two ways to get paid:
method a) is via PAYE, where they declare my gross pay as my salary
and
method b) is via their percentage scheme, where they declare some of my gross pay as my salary, and some of it they declare through the business. This means that they can pay a lower rate of tax through the company, and therefore I can receive more.
They asked me how I'd like to be paid, way a, or way b.
I was sceptical about method b, and so I asked whether it was illegal or in breach of HMRC regulation, and they assured me that it wasn't illegal, and that it was compliant with HMRC, and that my tax liability was with them.
My question to you guys is what they are saying true? Is it illegal to do what they are doing? If it's a 'grey area' which is not strictly illegal, and I won't be punished for it, then I'm okay with that, but I want to make sure I don't go against HMRC legislation.
Regards,
method a) is via PAYE, where they declare my gross pay as my salary
and
method b) is via their percentage scheme, where they declare some of my gross pay as my salary, and some of it they declare through the business. This means that they can pay a lower rate of tax through the company, and therefore I can receive more.
They asked me how I'd like to be paid, way a, or way b.
I was sceptical about method b, and so I asked whether it was illegal or in breach of HMRC regulation, and they assured me that it wasn't illegal, and that it was compliant with HMRC, and that my tax liability was with them.
My question to you guys is what they are saying true? Is it illegal to do what they are doing? If it's a 'grey area' which is not strictly illegal, and I won't be punished for it, then I'm okay with that, but I want to make sure I don't go against HMRC legislation.
Regards,
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