Employers National Insurance - why am I pay thier expense?

[sasskennedy]

Hi,

I've been having a bit of difficulty trying to figure out where I stand with Employers National Insurance. I am a New Zealander, employed through an agency for the NHS, paid through an umbrella company. When I get paid, my employees national insurance is deducted, my tax is deducted AND my employers national insurance also comes from my agreed rate. I work for a very small salary and over 40% of it is deducted for taxes.

So far as I am aware, employers NI should be deducted from THEM and not from my agreed hourly rate.

When I did some research, I found that the Social Security Contributions and Benefits Act 1992 (c. 4), Schedule 1 s3 ((2)(b)), stated that regardless of the existence (or non existence in this case) of a contract, the secondary contributor shall not be entitled to make, from earnings paid by him, any deduction in respect of his own… secondary Class 1 contributions (Employers National Insurance) or otherwise recover such contributions from any earner to whom he pays earnings (me).

However, the secondary contributor MAY recover from the earner the amount of any primary Class 1 contribution (Employees National Insurance). Which I am, of course, more than happy to cover.

When I explained this to my agency and my umbrella, both insisted that it was the others responsibility. Then finally, they told me that I have to pay the 12.8% employers NI regardless.

Now, I am several thousand pounds out of pocket and can not seem to find the help that I need.

Can anyone help?

[insuranceagency]

Hi,
I am also a Employee in a company, now i understand that Why the companies provides the facilities to their Employees, Thanks to you now i must say that it is necessary to everyone what ever his Job, must have the Insurance.
------------------------------------

[Generix]

I'm no NI expert, but I would suggest the clue is in the name.

i.e. Employee NI is to be paid by the employee, Employer NI is to be paid by the employer.

Not sure if a clawback of Employer NI could be made via salary - to my mind that would result in a circular calculation - furthermore not sure if its even legal.

However you mentioned an umbrella co.

In some cases I have seen umbrella co.s work such that you become a joint dir of them and effectively they way they work is that each director becomes responsible for the respective employer NI due - or similar - I can't remember exactly as I was doing the VAT and only briefly read over the NI and tax implications - assume the savings was something to do with dividends rather than salary which may make my point moot? Maybe something similar? I dunno - just throwing it out there.

I have a question for you...why would anyone in their right mind leave New Zealand to come to the UK to work for the NHS!? (Maybe you like being underpaid and enjoy the poor weather? [presumably you didn't read about the high taxes ;p])

[3point14]

I think some of this will come from a misunderstanding between worker and client. If the rate quoted was a flat rate then it already includes the 12.8% employer NI or the client is simply unwilling to pay this. How you arrive at the pay rate is immaterial.

e.g.

£10 per hour, uplifted by 12.8% means you invoice for £12.80 per hour. This could easily be simply quoted as a job paying £13 per hour where the client will not uplift and is offering a flat rate. The prospective contractor has to understand this and it may vary from assignment to assignment.If it is a flat rate then the contractor has to back out the employer NI by dividing the rate by 1.128 to get the effective hourly rate. This is often further adjusted by it being inclusive of holiday pay and thus the rate at this point must be further reduced to get the effective real hourly rate.