PAYE vs "Umbrella" 3rd party payroll

[Conmeister]

Hi guys

Just been given some temp work with a firm and they've put me through a trades agency called Rullion. Rullion have outsourced their payroll side of things to another firm called Paystream. These have sent me through a breakdown of how i will get paid. It seems to be very convoluted and it looks like i'd be getting paid less a week than my last job despite now having a better hourly rate and doing more hours!!! I appreciate they take a fee but it seems large deductions are being made. Has anyone used these before?

Rullion have stated i can use a PAYE scheme if i prefer. To be honest i'm not sure which is best option.

Anyone who is in or has been in a similar situation, any advice would be greatly appreciated.

Cheers
Conor

 

[stevey1983]

Hi, when i worked for rullion last year i was in the same situation and they put me thourgh a payment company called The Guild, i was paid weekly and this is how they broke it down:

Fee paid by client = £1000
Guild Margin (Fee) = £18.00
Insurance (public liability) = £0 (as have my own)
Gross Paid = £982.00
Amount Deducted for TAX (CIS) @ 20% = £196.40
Total Net Paid = £785.60

Hope that helps

 

[Adam W]

I've been in a similar situation - working for a company who pay an agency, who pay a payroll company who pay me; everyone taking their slice of my money along the way.

They operated both PAYE and CIS which were much the same - you still take home about the same, I think the only difference was with CIS you have to sort out your own NI contributions.

I suppose their only redeeming feature was if you sent them expenses receipts every week they would offset it against the tax you pay, eg if you were to earn £100 you would pay £20 tax, but if you put in £50 of receipts you would get about £9 of that back after they've obviously taken their cut.

 

[mogga]

and remember 40p per mile against tax the NI you pay is only class1 not class 2 needed for contribution based job seekers

You can claim the cost of agent(payroll) against tax tools PPE ( remember You are SELFEMPLOYED so YOU are responsable for PPE tools meters ect ect you dont get the whole ampount spent back ( beleive it or not a M8 thought the Tax man gave you back what you spent on tools ect) You can also claim tax back on subsistance but there is some qualifying for that

 

[sparksflying]

Hi guys

Just been given some temp work with a firm and they've put me through a trades agency called Rullion. Rullion have outsourced their payroll side of things to another firm called Paystream. These have sent me through a breakdown of how i will get paid. It seems to be very convoluted and it looks like i'd be getting paid less a week than my last job despite now having a better hourly rate and doing more hours!!! I appreciate they take a fee but it seems large deductions are being made. Has anyone used these before?

Rullion have stated i can use a PAYE scheme if i prefer. To be honest i'm not sure which is best option.

Anyone who is in or has been in a similar situation, any advice would be greatly appreciated.

Cheers
Conor

There is always someone who wants a slice of the cake, your cake... I had a similar thing some time ago and got frustrated at the way they would offset expenses if they got the receipts late or if I made a slight error with the vat number on the fuel receipt. They also charged me £40+ a week for this and the fact that you then pay your own NI and company NI, you are not really any better off. At least with paye, you know where you are... And more importantly you know where your money is.

 

[DwayneStacey]

With PAYE.
You pay less tax.
Say you earn £500/week.
start with 500.
min wage 337.50 (pay tax and N.I on this, once this is deducted from the 500 + their fee, usually £20) you can claim expenses upto the original £500.
It works out that you will take home around £395 so almost 80% of your wages.
Expenses are travel @ 45p mile, daily subsistence @ £12 day, food allowance £5 day, etc.

With CIS.
£500 - £20, they then take a flat 20% so £384 take home.
You have to pay your own N.I @ £2.52 week.
But you can claim back money on most of your expenses when you fill out your self assessment.

 

[bibzo]

Pay to get paid


These agency parasites are killing the industry

 

[Deleted member 38070]

Just come across the umbrella scheme, had not heard of it before, offered 13.50 an hour 40 hours= 540 gross job is 48 miles away so that's 96 miles a day at 45p a mile it's 43.20 a day x 5 = £216 a week + 5 days food + laundry comes to roughly 260 a week.
gross is 540 per week, do they take the 260 expenses away from the 540 and tax the 280? This is what the agency is saying, I only have a choice of paye or paye umbrella, obviously I'd like to take home as much as possible. Any advice appreciated.. Confused.. The agency said in my case I'd take home more of my wage as I have to travel so far to do the job..

 

[grantr37]

claiming mileage is a nightmare, a lot of places will not entertain doing it for you, and if you get any mileage from your employer(of the about 2% that actually do many don't help with the first 50 miles a day) then you get taxed on that mileage payment at about 45% as "benefit in kind" if you get a company van (regardless of if you are allowed to use it for personal use or not, although 95% of the time forbidden from doing so) then legally if you are not paying tax on it you could be found liable, few companies know this when handing out van keys, the tax man sees all vehicles given for use for any work and/or personal purposes(except taxis etc) as "benefit in kind" this is taxed varying by the vehicle type, model, value and "class" i.e an "executive saloon" such as an audi gets taxed higher than a ford fiesta or a vauxhall astra minivan......the tax people have a list of vehicles and what they think they are worth on a weekly basis in terms of "what would it cost to rent/lease one of those"

Expect to get £30 a week extra tax taken for an astra minivan or a ford fiesta, or £40.00 for a ford focus, renault laguna.....and £70-80 a week docked(added to tax deduction from wages) for an Audi or BMW company/works vehicle......even if you are forbidden from personal use...

This covers pool cars (where legally they are supposed to get you to sign for the keys/sign in-out but seldom do) as well as all company vans, and cars supplied to begin your journey to work from home each day by taking home at night...

The only way to avoid this tax for benefit in kind is to have a vehicle that is returned at the end of each working day and the keys hung in the office/safe and to make your own way home by your own personal vehicle or by taking public transport/a lift...

If you take a vehicle home at night and don't see a -£ on your wage slip then it might come back and bite you hard, this will only happen if your employer (ltd company) gets a tax inspection, but this happens to all businesses at random without prior advice, instantly any time of day or night.....they walk in in jeans and a t-shirt, or a little old lady and whip out the tax office ID card"shut the shop/office and send everybody home I am a tax inspector, call in the owner/directors right now"..and the usual response is that the tax comes after you, even if you try to argue your case or if you did not know/understand this tax on vehicle usage....


less companies have company cars these days anyway, a lot if not most have vans, but the allowable value for company cars dropped down from something like £39,000 to £12,000 about 2 years ago, so that there can be no tax allowances whatsoever claimed if the vehicle purchased as a "pool car" comes in at a cost above this....full VAT is taken right away as well on cars bought over this value, instead of being deferred until re-sold "secondhand including VAT" or "destroyed by a registered vehicle garage" i.e scrapped....


The tax man did this as they were getting annoyed at company managers getting a £40,000 BMW or a new land rover, charging the expense of purchase to the business in full, then giving the keys to their wife or son/daughter to use as their own personal vehicle.....without paying "tax for perks"....the £12,000 ceiling meant that the flashy cars got put out of reach and only small cars such as ford fiestas, vauxhall corsa's, renault clio's etc could be claimed......when challenged at some point in the past, I am sure from what I read before somewhere that another reason given was to "put gas guzzling executive saloons off the road"....

I don't know about a company fuel card if you are using your own personal vehicle, I think as long as you have bought your own private insurance policy and bumped it up to "work and business for the registered keeper/owner" then you can use a company fuel purchase card without being taxed, again a mileage register book might have to be filled in, which they may compare against a map and what their opinion of fuel usage might be....they had a fuel card log book in one place I worked in and they used to come into the canteen and pester the people who had the charge cards to fill in forms, one guy was awkward about writing in and signing every week so they came in and took his fuel card and his company charge card(company credit card) off of him in front of everybody else....he was in charge of purchasing spares and tools and had to go into the office basically every day after that to tell the office women what he needed them to order for him, then the directors started questioning every box of screws or spare lamp down to the penny and moaning that they thought he was not going to the lowest priced places, which they promptly googled and made him change to.....resulting in 5 and 6 week waits on parcels instead of 24 hours from the old suppliers...


vehicle mileage at work is something that I am going to need to look into further, it has been 3 years since I was fed the horror stories by a tax adviser and I think it has changed again this year in terms of allowable use etc...

 

[grantr37]

https://www.gov.uk/tax-company-benefits/tax-on-company-cars

HM Revenue & Customs: Forthcoming changes to the car benefit rules



found this......

 

[flyingsausage]

Just come across the umbrella scheme, had not heard of it before, offered 13.50 an hour 40 hours= 540 gross job is 48 miles away so that's 96 miles a day at 45p a mile it's 43.20 a day x 5 = £216 a week + 5 days food + laundry comes to roughly 260 a week.
gross is 540 per week, do they take the 260 expenses away from the 540 and tax the 280? This is what the agency is saying, I only have a choice of paye or paye umbrella, obviously I'd like to take home as much as possible. Any advice appreciated.. Confused.. The agency said in my case I'd take home more of my wage as I have to travel so far to do the job..

You need to watch these umbrella companies,as I think a lot of them don't pay a mans tax.
Many of the agencies own the umbrella company they force you through,so they are making money from you twice.

You also have to read all the terms and conditions as some will take extra money of you for union dues, and the other favorite is insurance,they kid on they pay these for you but they just keep the money.
Many of them now will take a hold back a percentage off your wage or a set amount of hours of your wage every week for holiday pay and then charge you a fee to pay it to you and also bump you with emergency tax.

Some are ok for claiming mileage and some expences for food etc and others are a nightmare.
A few I have worked with let you put in as many miles as you want and put in £20 a day for food which really takes your tax down if you can claim a thousand miles a week.

I have wrapped one job because it has not been worth working because of the umbrella company,this was really draconian and want a VAT receipt for petrol and a roll and sausage and they then claim the VAT back and keep it for themselves(even when it was expenses out of my own pocket).
This one wanted the post code of where you are working and a VAT petrol receipt of £15 for every 100 miles claimed,they want a VAT receipt for any tools and PPE claimed.
So I could hardly claim anything for expenses and they charged me £30 a week and also took four hours off me as well every week for holiday pay.
I was doing mega hours and got right royally pumped by the tax man for employer's national insurance and emergency tax as well(because I could claim very little to offset this)
It was a case of I was getting pumped for nearly half my wage(which was under the rate) and with them taking their cut and the holiday pay deduction as well,it was not worth working on that job.
It was a case of working 72 hours and having a look in at the bank on the way home after finishing work on the Friday and thinking they had mucked up my wages,but on checking my emailed payslip that night,it was a case of disgust and signing on the following Monday.

So you have to watch out.

You are better of going down the CIS route if you are going to be doing a lot of this work,as you pay less tax and can claim a will get a few grand back for your holiday every year after you do your tax return.

 

[flyingsausage]

What happened to me has happened to many other sparks I know so you have to be careful with umbrella companies.

I was teamed up with a books in spark and he cleared £400 more than me for working the same hours(never again).

And that was me backed from another agency.

 

[grantr37]

Agencies and umbrella companies have asked for receipts for all kind of things before, they claim them and write in that they cleared the refund from petty cash, which they did not.....a favourite is to tell you to buy your own PPE then they bill the employer(customer/client) £50 which they are legally allowed to bill for and they keep it for themselves, the client company then gets this £50 deducted from tax liability....the agency gets £50.00 and you get nothing.... Agencies also get £50 written off from each "employee" every December (tax man's employee gift write off allowance that every employer is entitled to) which is intended to pay for a night out at Christmas, or a company to employee gift etc.....they mainly take this out of petty cash from the business accounts and use it for their own night out.....I worked in one place for over a year, and we organised our own Christmas night out for the lads....the office staff and managers got a company paid night out on the tiles at champagne bars and used the roughly £4,000 that was set aside to be shared with all employees on 8 people...they also got bottles of champagne delivered by a wine merchant to the site office and placed at each of their desks and a pile of MnS vouchers each......we got nothing... when we were in a bar during the night out, 4 of the office workers appeared in a good few sheets to the wind....well about 15 of us were in that place and the rest had dispersed to other bars and clubs......all of us walked out and just as it happens a bus was going past which stopped, we jumped on and got off at another pub over a mile away...left the office people behind....cleared out...

 

[flyingsausage]

I have never had any PPE from an agency,have always been asked expected to supply my own and told to wear it.
It can be funny when you are working for a company and they moan at you for wearing their rivals overalls.

Some umbrella companies let you claim mileage with no receipts and also claim £20 a day for food as well with no receipts.
I don't like doing it but you have to claim as much as you can so you will not be hammered with tax.
If you re getting hammered with emergency tax and employer's national insurance and the umbrella will not let you claim plenty of expenses to offset this,in many cases it is not worth working for.


It is natural to get bitter when you get paired up with a books in spark who is getting all he is due and they start moaning about everything and you have to put him straight about how lucky he is to not be forced to work for buttons for an agency.


In my case above for me taking home £400 a week net less than the books in spark I was working with was a personal insult to me and I was not going to take that again.

 

[rmc86uk]

It can be funny when you are working for a company and they moan at you for wearing their rivals overalls.

I know where your coming from. I got told off for having a coat on with a rival M&E firm on it so I had to peel the name off. The other thing that gets to me is every site you go on the main contractor want this type of glove or that type of glove! There should be a UK wide standard for all sites in my opinion.