Frequently asked questions

Why do I pay Employee and Employer’s National Insurance?

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.

What does my agency pay rate include?

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.

Why is it so important for me to submit my expense forms to Eden?

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.

What is IR35?

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

Why do PAYE Umbrella companies offer different rates for subsistence when claiming expenses?

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.

Can I have my salary paid into an overseas bank account?

Yes, this is possible; however, the bank charges will need to be deducted from your salary for each payment made.

What is the difference between ‘chargeable expenses’ and ‘business expenses’?

‘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.

Why do I work the same hours as my colleague and get paid a different amount?

‘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.

How does the PAYE Umbrella process work?

Find an assignment either through an agency or directly.
Speak with Eden and receive a Registration Pack.
Complete a Registration Form, a P45/P46, and return them to Eden with a copy of your photo ID.
The agency confirms your assignment with Eden, and Eden sends you an assignment schedule which you complete and return.
You complete an Eden Expense Claim weekly or monthly and send to Eden with any receipts and business mileage forms for the previous week’s or month’s work by Monday 5 pm at the latest.
You complete an agency time sheet each week, which needs to be signed by you and your supervisor and returned to the agency. Eden will make you aware at the time of registration if they also require a copy of your time sheet. If so, you must do this by the deadline you are given.
Eden will process your hours, and then invoice the agency for your services.
The agency then confirms the payment of the invoice, and Eden pays you using the hours and expenses supplied (deducting our margin in the process), ensuring you maximise your income and minimise your tax.
Payment is made by Eden into your account by BACS transfer unless otherwise arranged. You can normally expect to be paid on a Friday unless the agency is late sending Eden payment for your services.
At the end of your assignment, should you choose to terminate your agreement with Eden, Eden will issue you with a P45 for your next employer. At the end of the tax year, provided you are still registered with Eden, a P60 will be issued. Remember that you can use Eden for all your assignments whether you find them yourself or go via an agency. There is no charge to stay registered with Eden when you are not working.