Your charge rate when you work as a contractor is inclusive of all payments including holiday pay and employers NI. If the agency were to pay you directly under a PAYE system then your rate would be adjusted down to allow for the fact that the agency would be paying the employer’s NI.
Your charge rate is made up of your salary, sick & holiday pay and employer’s NI. You will pay employee’s NI and PAYE tax on this rate once employer’s NI & Eden’s margin is deducted.
To take full advantage of being part of a PAYE Umbrella company Eden need your genuine business expenses to be able to offset these against your tax. If you do not submit expenses to Eden, then you will end up being taxed on the full gross amount of your salary and will pay more in tax and NI.
First introduced on April 6, 2000, IR35 changed the way that contractors could pay themselves. The legislation aims to ensure that individuals who work through an ‘intermediary’ pay the same Tax and National Insurance as would a ‘similar’ individual carrying out the same work as an employee. For further information see the HMRC website at www.hmrc.gov.uk
Each Umbrella company agrees their rates separately with the Inland Revenue based upon average genuine business expenses. These rates can be claimed without the need to submit the actual receipts and therefore reduce administration costs. If you wish to claim more, you can as long as receipts are provided to support the claim.
Yes, this is possible; however, the bank charges will need to be deducted from your salary for each payment made.
‘Business expenses’ are the expenses you submit weekly or monthly to Eden in line with our expense policy. These are not paid in addition to salary, but used to offset against your potential tax bill. They are deducted, as shown on your payslip, from your gross pay to reduce the amount of tax and NI you pay. Once these are deducted, the expenses are then added back on to give you your net pay figure. ‘Chargeable expenses’ are expenses that the client has agreed to pay over and above your normal rate.
‘Net pay’ differs between contractors working the same hours on assignment for various reasons. These may include: different tax codes, different pay rates agreed with the client or a difference in genuine expenses claimed.
Find an assignment either through an agency or directly.