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Points claimed for earning are always Gross (i.e. pre-tax). As long as the Net Salary on the letter from umbrella company matches the amount on your bank statement there is no problem whatsoever.pyke wrote:According to the guidance,
If the applicant is a contractor who does not operate either through his/her own company or as an employee, he/she may provide
an accountant’s letter confirming a breakdown of his/her gross and net earnings for the period claimed and personal bank statements clearly highlighting all credit payments made to his/her account from employment undertaken during the earnings period claimed.
I don't quite understand which amount the points will be based on - gross or net? Bank statements would be net, after a lot of deductions. My umbrella company states gross, taxable and net amounts. Taxable amount being the gross after deducting their fees and employer NI contribution. There is a lot of difference between the gross, taxable and net amounts and it will be tough if they are using the net amounts.
pyke wrote:Thank you.
pyke wrote:According to the guidance,
If the applicant is a contractor who does not operate either through his/her own company or as an employee, he/she may provide
an accountant’s letter confirming a breakdown of his/her gross and net earnings for the period claimed and personal bank statements clearly highlighting all credit payments made to his/her account from employment undertaken during the earnings period claimed.
That is aimed at those who operate through an umbrella company, I think.MPI wrote:Does this guidance apply to for those through Umbrellas?
Thank you, Ali. That does make a difference. Can someone confirm this, please? That it is the taxable amount that NI and PAYE is based on, not the gross amount? Even if these are not expenses that are reimbursed, merely allowable expenses used to reduce the amount taxed.aliq09 wrote:The net income will be expense minus i.e suppose you earn 100 pounds and make an expense of 30 pounds now your taxable income will be 100-30=70 . On 70 pounds you will pay NI . PAYE and other stuff so HOme office will see this 70 as your income . Please be careful with this trap
pyke wrote:That is aimed at those who operate through an umbrella company, I think.MPI wrote:Does this guidance apply to for those through Umbrellas?
Thank you, Ali. That does make a difference. Can someone confirm this, please? That it is the taxable amount that NI and PAYE is based on, not the gross amount? Even if these are not expenses that are reimbursed, merely allowable expenses used to reduce the amount taxed.aliq09 wrote:The net income will be expense minus i.e suppose you earn 100 pounds and make an expense of 30 pounds now your taxable income will be 100-30=70 . On 70 pounds you will pay NI . PAYE and other stuff so HOme office will see this 70 as your income . Please be careful with this trap
That would make it really self-defeating to claim deductable expenses such as accommodation and transport in order to reduce the taxable amount, wouldn't it? It's a double-edged sword.