InvisibleMan

wondered if anyone was doing this atm? if so

have you had any experience/knowledge of contractors working rights compared to that of full time workers.eg pay,holidays...

anyone heard of having to pay Employers NI? are they allowed to deduct that from your pay?

Hard facts please, cheers

DrEvil

If you run a limited company, the company you are contracting at should pay you X pounds per hour, from this amount it is your responsibility to pay employers NI/TAX and employees NI/TAX under the banner of your ltd company.

If you are PAYE through a company, they deduct this and pay you whats left.

AFAIK

InvisibleMan

so they are entitled to deduct their NI along with your NI too? then i guess all agencies deduct it, its just that ive never heard it before

[Edited by InvisibleMan - 7/29/2003 3:46:42 PM]

Stevie

Doesn't sound like contracting. Sounds more like employed!

You need an IR35 proof contract, and a better agency by the sounds of things. They are doing you no favours IMHO.

There is absolutely no need to pay NI on any more than £6000pa if done properly.

MarkO

If you're properly contracting (like I am) then you are a separate company - payroll is completely irrelevant to what the client pays. They simply pay you monthly amounts in response to an invoice. If, say, you invoice them for 5k, and they're claiming that the 5k is 'after employer's NI' then that's their business, their accounting tricks is nothing to do with you.

If, however, they suggest that they should pay you less than 5k because they need to deduct employer's NI, then that's quite different, and implies you're employed, and not contracting. In which case, check what the company is contributing to your pension, and find out how many days paid leave you have.

Think about it this way. If you employed a window cleaner, and he charged you a tenner, would you expect to deduct some cash from that tenner to cover your NI costs as an employer? I think not...Although it's exactly that sort of behaviour which is responsible for IR35 being introduced in the first place.

InvisibleMan

it wasnt a big deal sort of contract more like a weeks temping. I was being paid PAYE, the amount per hour stated was gross. They took off employers & employees NI & attempted to deduct holiday pay too, which i opted out of.

Like i say no big deal, more of principle. If they shouldnt be deducting employer NI, then I just hope they are proud of themselves & enjoy the money....

TurboKitty

Ahhhh, so it's like working for an umbrella company?

Check here for the way they work.

By the way, I am in no way recommending this company. I just happen to know they have details of how umbrella companies work on the site.

DrEvil

Ah, you are PAYE through an agency, well then they definitely will deduct employees+employers TAX and NI... Holiday however is should not be included in this if you've opt'd out.

TurboKitty

In this situation, AIUI, the umbrella company is the employer and as such is required to pay employers NI and make provisions such as pension and holiday pay.

The way they do this is to charge you for both NI portions, and take a percentage of your income to be set against any days you take as holiday. So, they're not paying you holiday pay, merely paying you less, and keeping the extra back so they can pay you if you take a day off! It allows them to fudge their way around the law.

Mind you, I've never worked as part of this sort of arrangement, so I could be wrong.

InvisibleMan

ok so they can deduct. whats the reasoning behind that then? ive just never seen it written down that way, so probably has always been deducted

when you get a contract from an agency, they are your employer right? whats the difference than working full time with a company? do they deduct their contributions from your salary too?

[Edited by InvisibleMan - 7/29/2003 5:28:25 PM]

TurboKitty

The reasoning behind what?

InvisibleMan

why i have to pay their NI & tax along with my own???

TurboKitty

It's not their NI, it's their contribution to your NI. Basically, an umbrella company gives you the benefit of working as if employed, (so no need to have accountants or worry about IR35), but this leaves them liable for some costs, so they pass them on to you. Think about it, they get none of the benefits of you being employed by them except for the fee you pay them for the service, so why would they pay any costs arising from them providing that service to you?

Now, admittedly, being an agency, they're probably taking a percentage of what you make, but that's the standard agency arrangement - that's for finding you the work in the first place. Paying you by PAYE and effectively being your employer is an additional service on top of their role as an agency, and it leaves them open to additional NI costs that they would not have if you were working as a limited company.

TurboKitty

By the way, the above is still AIUI, anyone who knows any different, please feel free to comment.

InvisibleMan

hmmm ok sort of see. still bleeding me dry though....