Employment Lawyers Can Answer Your Employment Law Questions
Hi Priscillia, is it possible to send over the exact wording of the clause?
does this work? It's the first 5 pages: http://pdog.me/1Eb6iBl
HI i am afraid not. Is the wording of the relevant part as you have typed in the question?
"Umbrella Company" means a supplier which:(a) engages one or more consultants under a genuine overarching contract of employment;(b) treats all income generated by the consultant(s) so employed as employment earnings; and(c) accounts to HMRC for full PAYE and National Insurance contributions in respect of all employment income earned by the employed consultant(s).
yes, let me open the contract in text form so that I can copy/paste more context
In essence is the question you are asking whether the individual will be liable to pay tax and NI in the UK or whether it will be deducted at source?
exactly! That is the question. My apologies for the vagueness
Ok unless the person is engaged as an employee of the company the client would not deduct tax and NI from source. The contractor or the umbrella company if it pays the contractor is liable to make the payment to HMRC. The clause spells this out as the word 'account' in paragraph C places an obligation on an umbrella company (if one is used) to pay tax not the client.
correct, and thank you. However...(for the purposes of avoiding confusion, let's combine my company and our contractor into one term = Contractor), because the Contractor is being paid by the UK-based umbrella company, and the UK -Umbrella company is being paid by their client, the client never touches the Contractor's payment directly. So this *would* mean that the umbrella company is deducting at the source.
I assume it's for any possible future tax liabilities that could arise
Yes that's right. Again this will depend on the relationship between the umbrella company and the contractor. If the contractor is a subcontractor then the Umbrella company will not deduct tax at source and the contractor will be liable to HMRC for tax and NI payments.
that answers my question!
Thank you :)
No problem all the best with this. Do please remember to take the time to rate my answer. Thank you and do come back to me in the future if you have any further questions.
Will do! You were very helpful! Thank you