URGENT PLEASE HELP - Umbrella Payslips

[humble_soldier]

Hi guys,

I really hope you can provide me with advice here - I am really stressed about the amounts on my umbrella payslip.

Basically, I am claiming points for earnings higher than £35000. I am doing this in an 11-month time window (consecutive months) to allow a little more time for my application.

The lowest amount I have earned for a month (hours x pay) is £3150, and the highest for a specific month £3700.

To explain my payslip situation, I will use the example of £3150. This is the gross amount before any deductions. This amount is listed on my payslip as Total Gross Pay.

However, I can claim expenses like accommodation and travel, which is deducted from this gross income to give the gross taxable income. This amount is also listed on the payslips.

If these amounts are considered, I cannot claim points for earnings.

In a nutshell, what the umbrella contractors are seemingly doing, is to take my gross income, subtract expenses, and then calculate tax and NI on these amounts.

The actual amount of net income is my gross earnings (the hours worked x pay eg £3150) minus tax and NI. The expenses do not get counted to improve my net earnings.

However, on the left hand column of the payslip, there are three columns: Basic Pay, Holiday Pay and Expenses. The sum of these amount corresponds exactly to the Total Gross Earnings (eg £3150).

Is this going to pose a problem for my application? If not, what documents do I need exactly?

[dev106]

Here is the simple example of Umbrella payslip:

Payslip:

Gross Payments:
Statutory payments £0.00
Basic Pay £XXX.XX
Holiday pay £XX.XX
Net Profit Bonus £XXX.XX- Total-1

Less-Deductions:
Advances £0.00
Employees Social Security £XX.XX Employees Tax £XX.XX Student Loan £XX.XX
CSA Deductions £XX.XX
Attachment of earnings £XX.XX-Total-2

Add-Reimbursed Expenses
Phone Costs £XX.XX
Travel £XX.XX
Accommodation £XX.XX
Hotel/Business Expenses £XX.XX
Subsistence £XX.XX
Stationary £XX.XX-Total-3

Billing Expenses £XXX.X

Total net pay Total = £ (Total1+Total 3) - £Total 2


Payroll analysis this year year to date

Taxable gross Total 1 £XXXX.XX

Tax Employee Tax £XXX.XX

Social Security Employees SS £XXX.XX

Generally, as per my knowledge most of the umbrella companies pay the above mentioned basic pay by national minimum wage and later add all the non-taxable expenses to it and show you a big figure on your payslip.

Ex: national minimum wage = £5.80
No. of hours worked in a week = 40hrs
Total Basic pay = no. of hours worked x national minimum wage = 40 x £ 5.80
= £232
After this,

When you add your reimbursed expenses to the basic pay, it will then give you your total net pay.
Reimbursed expenses + basic pay = net pay

Note: Usually in most cases, the above reimbursed expenses wouldn’t be taxable expenses, so HO won’t consider this money as part of your earnings

If this is your case, then HO will consider only your basic pay for the period you are claiming which should be £35,000.

[humble_soldier]

In that case, I don't qualify.

I have also spoken to First Migration, who highligted the dangers of umbrella companies in this regard.

Thing is, I would have been fine with a limited company, but for the line of work I am doing, this route would have been illegal as per IR35 status. But they would be able to extend it.

But back to the umbrella company - if I claimed 0 expenses, I would be fine.

Is there any other hope for me?

Any way I can pay back the taxes?

[dev106]

I might be wrong, but I think it should be fine if you pay tax on the total money you claimed for your expenses...

[sijin]

Hi,

The only thing that you can look at is every month when you get your payslip, the detailed section of your payslip will show TOTAL GROSS TAXABLE= ?, TOTAL TAX PAID=?, etc

In this section they keep on adding the figures from previos month therefore you will be getting the total gross amount. If this meets your HSMP requirement then proceed or else you will have to work on it again.

Trust this info helps you.

Cheers,
Sijin

[humble_soldier]

[quote="sijin"]Hi,

The only thing that you can look at is every month when you get your payslip, the detailed section of your payslip will show TOTAL GROSS TAXABLE= ?, TOTAL TAX PAID=?, etc

In this section they keep on adding the figures from previos month therefore you will be getting the total gross amount. If this meets your HSMP requirement then proceed or else you will have to work on it again.

Trust this info helps you.

Cheers,
Sijin[/quote]

Hi Sijn,

On the right hand side of my payslip, here are hypothetical figures:

Total Gross Pay TD 35000
Gross for Tax TD 30000
Tax Paid TD 5000
Earnings for NI TD 29800
National Insurance 2000
Pension TD 0

[humble_soldier]

[quote="humble_soldier"][quote="sijin"]Hi,

The only thing that you can look at is every month when you get your payslip, the detailed section of your payslip will show TOTAL GROSS TAXABLE= ?, TOTAL TAX PAID=?, etc

In this section they keep on adding the figures from previos month therefore you will be getting the total gross amount. If this meets your HSMP requirement then proceed or else you will have to work on it again.

Trust this info helps you.

Cheers,
Sijin[/quote]

Hi Sijn,

On the right hand side of my payslip, here are hypothetical figures:

Total Gross Pay TD 35000
Gross for Tax TD 30000
Tax Paid TD 5000
Earnings for NI TD 29800
National Insurance 2000
Pension TD 0[/quote]

Also, in the left hand column, I will find:
Basic Pay 2800
Holiday Pay 300
Expenses 500

This equates to Total Gross Pay = 3600
Gross pay for tax = Basic Pay + Holiday Pay = 3100
My net pay is Total Gross Pay - PAYE Tax - NI - Admin Fee (on the particular payslip I have in front of me, my net pay is less than my basic pay and holiday pay).