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Where Taxpayers and Advisers Meet

PAYE construction labourers paying: Employers taxes

Labourer AL
Posts: 1
Joined: Tue Apr 18, 2017 10:37 pm

PAYE construction labourers paying: Employers taxes

Postby Labourer AL » Wed Apr 19, 2017 12:21 am

My name is Algirdas. I work as labourer in London construction through recruitment agency on PAYE scheme. I am writing regarding government legislations: construction PAYE labourers who, in my opinion are taxed twice and are victims of greedy construction companies, recruitment agencies and payroll companies, can not be self employed or have limited company. In my opinion all this situation in construction industry is "Legal Scam".
My tax code: 1150L/Cumulative. Pay rate: 8.50 - 10£ per hour before Tax. Average working week: 45-50h; I got paid weekly through bank.
I would like to ask several questions:

1) Is it legal for Employer to deduct Employers National Insurance from Employee (Me)?
2) Is it legal for Employer to deduct Employers pension contribution from Employee (Me)?
3) Is it legal for Employer to deduct Employers Apprentice Levy (new one!) from Employee (Me)?

In 2014 I had (by new legislations) to sign an agreement with my Payroll Company by which Payroll Company becomes my Employer and I become – employee.
Analysing my payslip I could not understand why and how my weekly NET wage dropped down so drastically. On this new compulsory umbrella PAYE scheme I am losing at least £3000 NET each year. Not even talking about sick pay, holiday payments (calculating from minimum wage) or clothes, tools expenses or unincreased hourly rate for 4 years...
It would be great if any tax experts could help me and give any advise on how to escape all this nonsense or if goverment could take actions from ripping money from poor people. I just don't want to be tricked by my Employer, Agency or avoid any Tax payments.

Posts: 446
Joined: Fri Aug 07, 2015 2:17 pm

Re: PAYE construction labourers paying: Employers taxes

Postby SteLacca » Wed Apr 19, 2017 1:10 pm

None are legal in the normal course of events, though Umbrella companies will generally have a clause in their agreement that confirms that you will be responsible for those costs. It's analogous to working via your own limited company, where your company would be responsible for those costs.

However, the likelihood is that they are deducting those costs from gross pay which, after exemptions, would amount to 13.05%, or £1.10 from an £8.50 payment. This reduces the payment to £7.40 (i.e. below National Minimum Wage) which is illegal whichever way you look at it.

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