companys refusing to pay CIS?

[einstein]

either umbrella or limited company?

Anyone know why?

 

[Nigel]

It’s not being PAYE, that’s an issue.
It’s this bogus PAYE that the agencies want us to take, where, we aren’t employed by anyone, and we have to pay the employer’s NI contribution.

Under an umbrella you are your own employee just like a company director so employers NIC is down to you.

 

[Deleted member 26818]

Under an umbrella you are your own employee just like a company director so employers NIC is down to you.

Company Directors don’t pay employer’s NI contributions.

 

[Nigel]

Company Directors don’t pay employer’s NI contributions.

What??? Of course they do. Haha

 

[Nigel]

Well they don’t but the company does obviously.

 

[Deleted member 26818]

Exactly.
If the director is employed, the company that employs them pays the employer’s NI contribution.
It could be that the director is the owner and sole director of a Ltd Company, so technically the director is employing them self and as the employer pays employer’s NI contribution.

The Umbrella scheme is not a Ltd Company paying a director.
It’s a scheme for agencies to pay workers that they supply to companies.
If the agencies want to employ workers, then the agencies should pay the employer’s NI contribution.
Then as an employee, the worker will have a contract of employment, be entitled to holiday pay, sick pay, etc.

 

[Nigel]

Exactly.
If the director is employed, the company that employs them pays the employer’s NI contribution.
It could be that the director is the owner and sole director of a Ltd Company, so technically the director is employing them self and as the employer pays employer’s NI contribution.

The Umbrella scheme is not a Ltd Company paying a director.
It’s a scheme for agencies to pay workers that they supply to companies.
If the agencies want to employ workers, then the agencies should pay the employer’s NI contribution.
Then as an employee, the worker will have a contract of employment, be entitled to holiday pay, sick pay, etc.

This is it. What an umbrella company is is a group of small Ltd companies under one umbrella. So your ‘company’ is probably called ‘28562836’ but it is a Ltd company under the umbrella of the agency. As such ‘technically’ you are the Director of company 28562836 and so you pay employers NIC on the wages you give to yourself as Company Director.

 

[Deleted member 26818]

In the past, there were Umbrella payment companies, where each worker became a director of the umbrella company (usually after having paid a fee) and then the worker was paid a minimum wage, tax and employer’s and employee’s NI was deducted, and the rest paid to the worker as a dividend.
Such companies were outlawed some time ago by HMRC.

Your suggestion that Payroll companies are now setting up each worker as a Ltd. Co. then paying the worker as a director of a company the worker has no knowledge of, sounds ludicrous.
Would the payroll company set up these Ltd. Companies in advance, then just allocate each worker to the next available Ltd. Co. on the list?
Or would they just set up a new Ltd. Co. for each worker, as and when the agency passed on the worker’s details?

The biggest question, is how would they obtain authorisation to deal with Companies House, Corporation Tax and the CIS/PAYE department without the worker’s knowledge?