Tier1 extn - contracting thru Umbrella

[fundoopg]

Hi,

I am in UK for last 6 months and contracting thru an umbrella company. I will apply for my tier1 extn next year. My umbrella company pay me monthly salary, however in my pay slip I can see Salary as 10% and rest 90% as commission. I am not sure of this difference and wondering if that commission will be treated as my earning while applying for visa extn.

I have sometime to switch over to PLC model if needed and obviously I will get some tax benefits. But my first priority would be tier1 extn, so please suggest what I should do?

Thanks

[fundoopg]

Can someone please respond to my query about Commission or Salary? Anyone on umbrella applied for extension?

[tier1_applicant]

Two figures seems to have some error e..g
Salary is 10% only and commission is 90% which is quite unusual.
Are you paying tax on 10% or 90% or whole 100%?

[fundoopg]

I am paying NI and PAYE tax on total figure. My umbrella company said that salary is the minimum wage allowed which is not taxable and commission is their total profit minus expsenses which is taxable.

In UKBA website their is no reference to commission

[fundoopg]

Seniors,

Any response on commission paid please? Will it be considered as my earning?

[reachren]

Hi fundoopg,

The GROSS pay or TAXABLE pay is what case worker will take into consideration for your extension.Tell the umbrella company to specify Gross pay or Taxable pay in your payslip.

If you are claiming expenses every month your Gross pay/Taxable pay will be reduced a lot which can cause problem to your extension.so do not claim expenses if you wany Gross/Taxable at a certain slab.Do your mathematics well.

i was in the same boat .Questions welcome or PM me i can guide you well.

[fundoopg]

I pay my tax on that commission part as well. In my pay slip I have

80% as commission
5% as holiday pay
10% as salary
5% as expenses


Gross Pay is Commmission + Salary + holiday pay

I have P60+P45 to support that. Please let me know if this commission will be considered as earning while applying for Visa. I have started my limited company now so that I can show min salary + dividend but that will not cover whole 12 months so I must show this earning thru umbrella.

Please sugggest

[fundoopg]

seniors, please respond

[tier1_applicant]

"We will only accept allowances as earnings if they are declared in your payslips and your employment contract says that your employer must pay these allowances."
You should get explanation of commission from umbrella company to prove that is part of your regular earning and tax is paid on this.

[reachren]

Hi fundoopg,
As long as you are paying the right amount of tax (as you mentioned (Grosspay=commision+holiday pay+salary) then you should be fine to claim those amount as your gross pay.Get a pay slip which says Gross amount/Taxable amount and dont expect the case worker to calculate ((Grosspay=commision+holiday pay+salary)).
If the pay slip does not specify Gross amount tell your umbrella company to give you a salary statement of your monthly salary in company letter head(signed and if possible sealed) for the period you are claiming points for, which mentions GROSS/TAXABLE pay ,NET pay,NI etc.You can give statement of earnings INSTEAD of payslips.

[slugmeister]

The easiest way around this is to plan a year in advance. Your salary should be whatever the Tier 1 minimum is. So if you need, £32K, for example, in order to get Tier 1 then make sure your salary-- the part you are paying tax on -is £32K even if it means you have a smaller commission.

Yes, you end up paying more tax but the good news is that you get to stay in the country.

I regret not doing it this way completely. All the money I saved in tax I ended up spending on an immigration lawyer to sort the mess out. I was on a very, very good offshore EBT. The returns were great, but it made proving my salary, which was effectively minimum wage, extremely difficult.