IR35: Umbrella Case Study
Whilst Denis has been busy gathering information on IR35 to assist both interim managers and our client’s transition into the new legislation come April 2020, I have been looking into what happens to an interim managers pay if the contract falls inside IR35 and an umbrella company is used.
Here is a breakdown of the costs that will be paid out:
Margin
This will be the umbrella company’s profit on employing the interim manager and processing the payment. Average costs were £100 per month.
Employment costs
This covers Employer’s National Insurance Contributions. This was approx 10% of net invoice.
Income Tax
Pay-as-you-earn income tax (PAYE).
Employee’s National Insurance
Tax contributing to social security benefits. This was approx 8% of net invoice.
Holiday Pay
This depends on the umbrella’s holiday pay model – it’s worth asking about.
Here are the select few umbrella company’s I have spoken to and worked with in the past and I’m happy to pass on my recommendation:
JSA https://jsagroup.co.uk/ I have been working with these guys recently through an interim of ours – great to work with and have been very helpful when I’ve been calling for advice.
Parasol https://www.parasolgroup.co.uk/ These guys were at a recent conference Den and Jared went to on IR35 through the REC (Recruitment & Employment Confederation). Another of our interims has just signed up with them.
Omnia Outsourcing https://omniaoutsourcing.com/ Another company that has been recommended to us, so I had a long chat with one of the owners who impressed me and is passionate about best practice.
If you do require further info on this or IR35 in general give our hotline a call on 01775 828179 and you can also check out our IR35 page
Regards,
PS The information in this post is general in nature and should not be considered legal, tax or professional advice. We recommend you seek professional advice from accounting, legal and umbrella companies.
