Page 3 - Not Always Umbrella

The options The options Off-Payroll deductions The fee payer, or the party that usually pays the contractor’s limited company (PSC) will continue to do so. The only difference is that once caught by IR35, the fee payer must now deduct PAYE Tax and National Insurance from the gross amount due to the PSC before they make a payment for the same. The fee payer will also have to pay employers National Insurance (ENIC) and apprenticeship levy (AL) in addition to this amount. Pro’s: The contractor keeps their PSC Con’s: The contractor receives a lower PAYE net wage compared to their PSC, still has to pay for an accountant & insurance within the PSC and the fee payer has much more additional work and costs. Employed PAYE The contractor gains employment by either the agency or the hirer. With employment comes statutory benefits, such as holiday pay, SSP, maternity/paternity, legal obligations and employment terms. Pro’s: The contractor gets additional statutory benefits and may even get enhanced benefits, healthcare, car etc. Con’s: The contractor receives a lower PAYE net wage compared to their PSC, the employer has additional costs such as ENIC, AL, employers pension contributions (EPC), holiday pay, statutory benefits, additional work load and all the legal employment responsibilities. peoplegroupservices.com 02