If you are currently your workforce through the normal PAYE scheme, then there are significant savings to be made. Placing workers onto contracts through Umbrella companies can save up to all of what you pay in Employer’s National Insurance - currently an additional 13.8% on all salaries over £136 per week. It could be the perfect solution for taking on new recruits or for formalising existing staffing arrangements.
It doesn’t cost the company a penny either. An umbrella company provides a way for workers to get paid rather than a recruitment agency or host firm paying them via their own PAYE scheme’ The worker actually becomes an employee of the umbrella company and as result may even offset any business expenses against their taxable income. The result is that usually the employee takes home more pay than if they were paid at the same rate via PAYE.
No umbrella company has special dispensation from HMRC to do this. Only HMRC can determine what business expenses can be claimed and they must always be wholly necessarily and exclusively incurred in carrying out the duties of the employment. What does the worker get? Legitimate tax relief on their expenses, which results in an uplift in their take home pay. It’s a win-win.
For more information on how this system could benefit you contact Michael Sweeney at Good People via michael@goodpeopleservices.com.
