UMBRELLA COMPANY - TIER1 EXTENSION

[ruk007]

Hi All,

Need suggestion on my Tier 1 extension which i apply next year end.

I work as a consultant and have been going through a umbrella company.

I am getting part of my billing as salary credited to my account and remaining amount credited to my wife's account as dividend. (As suggested by umbrella company)

The net salary credited to my account is sufficient for my Tier 1 extension. (Net = 3250, NI around 400 & Tax around 750. Total Gross ~ 4400)

However i think that the umbrella company is not paying the full amount of tax they deduct as per payslip and show my salary very minimal for year end tax calculation. (Last year P60 showed 10K as earnings)

1 Could anyone advise if it is ok for salary details matching between bank account and payslip and not match with P60. ?

2 Also is P60 needed to be submitted while applying for extension?

If there is any reconciliation with P60, i would be in trouble and better change it to limited company immeditely.


Regards,
.

[AccountantMatthew]

I've got to be honest ruk007, I'm confused!

If you work for an umbrella company you will be an employee (you have a P60 so that makes sense) so I don't quite see where the dividend for your wife comes into it; dividends, of course, are paid to ordinary shareholders of a company.

The P60 is your end of tax year statement showing what PAYE has been paid by you and also the National Insurance for that job. Your payslips for that tax year should match to those totals.

Often with umbrella companies, your net salary will be lower that what your hourly rate is because from your hourly rate x hours the client is billed, they will deduct expenses, allowances and their fee. This will then be your taxable pay and you will be taxed on that - this is then where you get the higher %age of pay to take home. It also means that your net salary will be lower.

... but I digress.

I think the starting point is to talk to your umbrella company and get some answers as to what they have done, how they have done it and why they have done it. Potentially get something in writing if you are still unsure and then run it by someone else. Once you have that then all may become clearer.

All the best.

[ruk007]

Thanks for the reply Matthew.

[Sushil-ACCA]

Hi All,

Need suggestion on my Tier 1 extension which i apply next year end.

I work as a consultant and have been going through a umbrella company.

I am getting part of my billing as salary credited to my account and remaining amount credited to my wife's account as dividend. (As suggested by umbrella company)

The net salary credited to my account is sufficient for my Tier 1 extension. (Net = 3250, NI around 400 & Tax around 750. Total Gross ~ 4400)

However i think that the umbrella company is not paying the full amount of tax they deduct as per payslip and show my salary very minimal for year end tax calculation. (Last year P60 showed 10K as earnings)

1 Could anyone advise if it is ok for salary details matching between bank account and payslip and not match with P60. ?

2 Also is P60 needed to be submitted while applying for extension?

If there is any reconciliation with P60, i would be in trouble and better change it to limited company immeditely.


Regards,
.

for visa purpose u need to see what is yr taxable salary and dividend recived by you

if it meet yr requirement than fine otherwise increase yr dividend

[ruk007]

Sushil,

If in the payslip the net and gross salaries meet points for extension and would that mean the same amounts needs to be reflected in P60?

As i would be submitting Bank statement and Payslips as a proof of income, do i need to bother on the tax paid on P60?

Regards,
RUK

[Sushil-ACCA]

Sushil,

If in the payslip the net and gross salaries meet points for extension and would that mean the same amounts needs to be reflected in P60?

As i would be submitting Bank statement and Payslips as a proof of income, do i need to bother on the tax paid on P60?

Regards,
RUK

TAXABLE PAY in pay slip ar considered by HO

NOT GROSS REcipts , net recipts r coroborative evidence of recipts

p60 r ignored by HO

[Sushil-ACCA]

Sushil,

If in the payslip the net and gross salaries meet points for extension and would that mean the same amounts needs to be reflected in P60?

As i would be submitting Bank statement and Payslips as a proof of income, do i need to bother on the tax paid on P60?

Regards,
RUK

TAXABLE PAY in pay slip ar considered by HO

NOT GROSS REcipts , net recipts r coroborative evidence of recipts

p60 IS ignored by HO

[ruk007]

Thanks Sushil