PAYE Umbrella Company Advice for Contractors
Here we give you some PAYE Umbrella Company Advice. These type of companies sprung up after the IR35 legislation was implemented in 1999.
They are a device where contractors, who are caught by IR35, can still claim some expenses against tax.
The umbrella companies pretend that contractors are employees of the company, for tax purposes.
The contractor pays the umbrella company a monthly fee for doing all his, or her, admin and paying him, or her. All the contractor has to do is get his, or her, timesheet signed and send in the expenses receipts and the umbrella company does the rest.
They deduct the PAYE tax money, after expenses have been excluded, and send the PAYE to HMRC as if the contractor ia a permanent employee.
Contractors prefer to stay outside IR35 so that they can use limited companies. Limited company contractors pay an average of £10,000 a year less in tax and NI contributions than umbrella company contractors.
[caption id="attachment_854" align="alignnone" width="259"] PAYE Umbrella Company Advice for UK contractors[/caption]
