RE: Employers National Insurance

r-more — Mon, 24 Dec 2018 13:50:55 GMT

You’re welcome, Merry Christmas!

RE: Employers National Insurance

Emma Daw — Mon, 24 Dec 2018 00:02:35 GMT

Thank-you so much for your help ! That's made it all so much clearer. Have a very happy Christmas !

RE: Employers National Insurance

r-more — Fri, 21 Dec 2018 18:18:01 GMT

From a tax and National Insurance perspective, you are “employed” by the umbrella company. Whoever a persons employer is, the employer has to pay emploer’s National Insurance in proportion to the wages they pay their employees - so basically there’s your tax (PAYE), your National Insurance and employers National Insurance.

In a typical employment situation, you would get your pay (less deductions) and the employer would pay employer’s National Insurance in addition to your pay. With an umbrella company, the only source that could be used to pay the employer’s NI is the fee income you generate, hence the deduction. If an umbrella company were to pay the employer’s NI out of their own pocket, they wouldn’t make any money and there would be no point in offering the service - the alternative would be to increase their fees to cover the contribution, but you would still end up paying it.

Setting yourself up as a limited company may be a more financially favourable option, but that’s a ”may” and you need to also factor in issues of company administration And would only work if you are genuinely self employed and not just self employed on paper.