Astro Findings
When choosing an umbrella company to use for your freelance business, there are a number of things to keep in mind. Many companies use flashy advertising gimmicks which can be misleading and they may even make false promises, so it’s important to get as much information about the company as you can.
While many companies will advertise that they are IR35 compliant, in reality, all umbrella companies are. With changes in the laws over the years, the only remaining option is to be paid by PAYE, making compliance irrelevant. One sign that a company is not trustworthy is if they claim that you can submit expenses without receipts. That may be true, but the HMRC will likely investigate the company eventually, and you will be held accountable for any expenses you cannot prove.
Pay particularly close attention to the company’s fee structure. Most charge a flat rate for the services they provide, but some charge a percentage of your wages. This can be bad, especially if you make good wages. The more you make, the more they will charge you, so look out for this type of plan. Also, check to make sure they charge no entrance or exit fees, or a penalty for early termination of your contract.
When looking at a perspective umbrella company, find out how quick their payment is. Some will take longer than others to submit invoices and send out payments, and you will wait longer to be paid. Ask if they hold money for holiday pay, sick pay, or any other reasons. If this is something you want, great, but if not, you should know before you sign on.
Customer service is an important part of any company, and your umbrella company is no different. Though they may have fast, online services, you need to know how long it will take to get help if you have a problem. Ask if you will be assigned a manager or if you will have to talk to everyone in the office to solve your problem.
A good umbrella company should be able to provide you with testimonials from clients and good references. Another useful tool is to ask around for referrals from fellow freelancers and friends. Word of mouth is usually a good indicator of a company’s reputation, and friends and colleagues will be able to tell you which companies are good, and which ones to avoid. If you ask the right questions and know what to look for, you will have no trouble finding the right umbrella company for you.
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Tags: Business, Finance, tax, umbrella companies
Posted in Taxes · September 1st, 2010 · Comments (0)
National Insurance contributions (NICs) are paid to build up a person’s entitlement to certain state benefits, including the State Retirement Pension. The amount that an individual is liable to pay depends on their own personal circumstances.
Who should pay National Insurance?
National Insurance is payable by all UK individuals aged over 16 that are either employed or self-employed and their earning are above a certain level. If you are an employee and reach the state retirement age you are no longer required to make NICs. Similarly if you are self-employed and reach the state retirement age you immediately are no longer required to make class 2 NICs, and from the tax year following the year you reached the state retirement age you are no longer required to make class 4 contributions.
The types of National Insurance contributions are detailed below:
Class 1 – paid by employees, sometimes politicians have referred to this as “an employment tax” or “a tax on Jobs”. Two elements to class 1 contributions which are employee’s contributions are deducted from an employees pay. Employer’s contributions are paid by employers when they pay employees.
Class 2 – this paid by self employed people. It is a flat rate regardless of earning (provided that the self-employed person has earning over a certain level, if earnings are lower than this level then a “small earning exemption” may be applied for). These are normally paid either quarterly via a bill from HMRC or monthly by direct debit.
Class 3 – These are voluntary National Insurance Contributions, in certain circumstances some people may wish to make these. For example, but not limited to, you have not made sufficient contributions in the year or perhaps you are living abroad but want to maintain your potential UK state benefits. It is highly recommended that you speak to an experienced professional prior to making such contributions.
Class 4 – These are payable by self-employed people in addition to Class 2 contributions, if their income is above a certain level. The level of these contributions are dependent on earnings. Class 4 National Insurance contributions are normally payable with income tax calculated on an individual’s Self-assessment tax return.
If you have any concerns about your National Insurance payments or record we suggest you contact a suitably qualified and experienced professional such as a Chartered Accountant.
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The author does not guarantee the accuracy of any information provided in this article and recommends that you do not take any action, whatsoever, based on the information provided. By the fullest extent permitted by law, the author does not accept any responsibility for any actions you may or may not take based on information contained in this article. This article contains general information and is not a substitute for specific independent professional advice.
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Posted in Taxes · July 26th, 2010 · Comments (0)