Is it worth it?

[Guest Tracker]

Dot has a contract working via an agency on a temporary posting.

 

For all intents and purposes she is working for herself with none of the fringe benefits associated with employment such as sick pay, holiday pay, employment protection, redundancy rights or pension rights.

 

However, because it is via an agency HMRC take her as being employed so not only does she pay 11% employees NI on income between £100 and £670 per week PLUS 1% on income above £670 as well as IT at either 22% or even 40% BUT she also has to pay her own 'employers' NI at 12.8% on everything over £100 per week.

 

This makes a worse case scenario of deductions totalling 64.8% of parts of her income.

 

Is it worth working at these rates of direct taxation?

 

We think not - so we are limiting her hours and contract time to stay under the 40% threshold.

 

How about that for an incentive to work?

 

I wonder who brought i these levels of taxation?

 

Why - Grasping Gordon of course - who else would?

[KD]

dont wind me up im just about to get ready for going out

[Guest Tracker]

Que?

 

Moi?

 

As if!

[BGD]

What's the earnings threshold for the 40% Income Tax band nowadays in the UK?

[Guest Tracker]

BGD - 2007-12-01 7:20 PM

 

What's the earnings threshold for the 40% Income Tax band nowadays in the UK?

 

A mere £34,600 this tax year - see what I mean!

[donna miller]

Tracker,

You need to take some legal advice based on what you have posted.

Legally if Dot is working for an agency, then she is employed by that agency and is only liable for the same stoppages as any other employee.

 

You only pay employers NI cont when you employ other people.

 

If she is classed as self employed by the agency, they would not be able to stop anything from her earnings. She would have to invoice them ,then she would only have to pay self employed NI contibutions, these are about £8-12 per month. Her income would then be declared and assessed at tax year end, and any payments due after allowances, both personal and business were dedected.

 

A lot of agencies try this on to avoid paying NI conts for the people they employ.

[Guest Tracker]

Thanks Donna - we too have it sussed and 'discussions' are ongoing!

[flicka]

Tracker - 2007-12-01 6:56 PM

 

Dot has a contract working via an agency on a temporary posting.

 

For all intents and purposes she is working for herself with none of the fringe benefits associated with employment such as sick pay, holiday pay, employment protection, redundancy rights or pension rights.

QUOTE]

 

Tracker

You also need to appraoch the Agency regarding Holiday Pay

It became a legal requirement on January 1st 2007 for all contract workers via Agencies.

But note the Holiday pay entitlement is accumulated from an hourly rate deduction.

[J9withdogs]

Have you thought about forming a Limited Company?

 

Dividends paid free of tax - corporation tax paid at 20%, until they close the loophole, that is *-)

[Guest Tracker]

J9withdogs - 2007-12-01 7:49 PM

 

Have you thought about forming a Limited Company?

 

Dividends paid free of tax - corporation tax paid at 20%, until they close the loophole, that is *-)

 

Probably would save some tax but may well not worth the extra accounting and paperwork etc for occasional short term contracts - but thanks for the thought.

[Guest Tracker]

flicka - 2007-12-01 7:49 PM

Tracker

You also need to appraoch the Agency regarding Holiday Pay

It became a legal requirement on January 1st 2007 for all contract workers via Agencies.

But note the Holiday pay entitlement is accumulated from an hourly rate deduction.

 

Thanks John - it is already included.