The Umbrella Companies Blog Archive: January 2009
Home of Umbrella Company Gossip Online

For those of you working under our Solo or CIS contracts you will notice a new addition on the bottom left of your remittance advice in the coming weeks. Under the heading of Tax and NI Advice for this Payment you will see an estimate of what Tax and Class 4 NI you need to set aside for this payment (if there are multiple payments in the week then you will need to add all these together).

In the case of CIS you will also see what tax has been deducted on your behalf but there could still be additional tax to pay at the end of the year. If you are earning enough to pay higher rate tax then there will be a significant additional amount to pay. In all cases you will see how much we suggest that you put away or reserve for your year end tax return.

This will be based on a standard tax code and on a non cumulative basis. It only takes into account the money you have been paid this week through Gabem. If you have been working elsewhere during the tax year and if your cumulative income takes you into a higher tax bracket you will need to take this into account when calculating the tax you will be liable for at the end of the tax year.

The tax advice will appear on every remittance advice we send you but will be for that payment period alone. In other words it will not be cumulative representing a Year to Date figure.

We hope you find this helpful. It is intended as a weekly snap shot of your possible tax liability. For an accurate year end calculation you will need to retain each remittance advice notification for your own records and ensure you are reserving sufficient funds for your tax return.

From the beginning of the next tax year in April 2009 we will be offering an additional service. You will be able to reserve the tax you will be due on a monthly basis with a Gabem Reserve scheme ensuring that not only will you have no nasty surprises but you will also have the funds available to pay your tax bill at the end of the year. We will be sending you more details of this service nearer the time.

Have a great weekend

Steve Girdler
30/01/2009

So we are finally definitively in recession and with a whopping negative growth of 1.5% for the last quarter. It's not the best of news but I don't think anyone is particularly surprised. The way the media was carrying on I'm almost surprised it's only just been made official.

That said it's good to see that optimisim is alive and well in the contracting industry: one survey claims that 40% of contractors expect to earn more this year than last even in the face of recession. That optimism is important, especially in a group as important to the economy as freelancers.

Those of you whose work or employer is involved with the 2012 Olympics have even more reason for optimism, with fresh investment from the government to the tune of £496 million pounds highlighting the projects overall importance. This is the sort of investment that will pay dividends in the long run (unlike my colleague's recent investment in the Royal Bank of Scotland), bolstering companies and other private projects down the line, helping to keep contract work ticking along nicely.

Optimism really is the only way out of this situation. We can ask the question "who's fault is it that we're here?" but in the long run that's not going to help. Best to carry on, knuckle down and act like you're winning.

Yours optimistically

Hugo
23/01/2009

Today I am pleased to be the bearer of good news for all of you who are Gabem Umbrella employees. As of next Monday (26th January) you will be able to claim for meals after you have been away from home for a certain number of hours.

If you are away from home for more than five hours you can claim for up to £7 and if you are away for more than ten hours you can claim up to £15. Like all work related expenses these have to be backed up by receipts, and will undergo our normal checking procedure, but that being said this should be something that the majority of you will be able to benefit from most days of the working week.

In other good news, our recommend a friend offer is continuing and presently has no closing date, so any time you mention us to a friend or colleague make sure they take down your Gabem number, otherwise you could both be missing out on £50.

Carrying on the almost "public service announcement" theme of today's blog, I have a couple of reminders for you. First, if you have received a self assessment and are going to be submitting it online, the deadline is the 31st. Speaking from experience leaving it until the last minute is an exceedingly bad idea, everyone leaves it to the last minute, and the HMRC computers tend to have issues handling that many tax returns at once. Save yourself the stress and hassle and get it in early.

The second reminder is about unclaimed holiday pay. The end of the financial year is looming, and as a result so is the deadline for claiming your holiday pay. All holiday has to be paid out by the 3rd of April or it will be lost, so I recommend putting in your request before Friday the 27th of March to ensure it ties up with any other payments you may be receiving.

Hope you're all having a good week.

Hugo
21/01/2009

Every year in April, we're informed by the Chancellor of the moment about all the tax and NI changes we are going to have to make. This would usually closely followed by a Krypton Factor like dash to put all the changes in place before the May deadline comes around. It's part of the business you learn to prepare yourself for and eventually just get used to.

This year it's different, with the changes already announced in the pre-budget report, we already know what we have to do, and the stress of April has almost disappeared.

Unfortunately the rest of the changes aren't as rosy, true there is a larger than usual increase in the personal allowance (£6035 increasing to £6475 for those on a standard tax code), but that is down to the high rate of inflation in September rather than any real windfall.

The main piece of bad news comes in the form of an NI increase, it's just a rather underhanded way for the government to tax the higher earners. NI will now be at 11% right up to where the higher rate of tax starts at £844 (called the Upper Earnings Level or UEL), from there it will switch to the 1% it does currently at £770 (which will now be called the Upper Accrual Point or UAP).

Another big change (although this is soley to the admin side of things) is that bigger companies (such as ourselves) will now be able to submit P45s to HMRC online (which we do already) and so will finally be to print off their own P45s. It's a minor thing, but one that I am sure is going to cause confusion, initially with smaller firms unsure if the new method is legitimate. Ultimately it should be a welcome streamlining process, even if they are just black, white and A4 in size.

Sorry for the technical babbling on a Friday afternoon, but I thought it would be better to keep you informed sooner rather than later. Anyway have a great weekend, and speak to you next week.

Hugo
16/01/2009

It's nice to have things back on an even keel after the Christmas disruption. I'm not saying that I wouldn't appreciate more time off, but there is plenty to do each week and less than 5 days doesn't always leave enough time to do it.

As you may have noticed our seasonal magazine "The Bottomline" came out this week, inside which is the opportunity to win an LCD TV. All the answers are in the magazine itself, so it's worth having a go. You can download a copy of it here if you're interested, and you can even answer it here (you do need to be a member of Gabem to enter).

Susan's Legal Bits hasn't been updated yet for this month as she's had a lot on her plate here with end of year HR stuff. I am going to try to push for a new one next week, failing that we may miss a month. I will badger her as much as I can, as I realise it's pretty popular.

Speaking of having a lot on your plate, the post Christmas diet season appears to be kicking off here at Gabem, and debate is strong here over which diet to follow. I'm going to stick with the uncomplicated eat less idea, but all the usual fad diets are coming out, and whilst I don't want to turn this into a recipe board, I'd be interested to know if anyone has managed to lose weight and keep it off, and how they did it. You can get in touch here with any advice or comments.

Hope you're having a good week.

Hugo
14/01/2009

A somewhat belated Happy New Year to you all! So far 2009 is off to a good start, we've had Charlie (who some of you may remember) return to the operations team after her maternity leave, our recommend a friend offer is back and payroll have finally forgiven me for the comment I made in the blog on the 24th of December.

The only real cloud so far has been a bit more scaremongering from Umbrella Supermarket. It seems the only topic they can think to talk about it umbrella companies going bust. This would be okay if someone had, they'd hear no complaint from me, you can be sure that I'd be talking about it too.

To make matters worse the forum thread their article links to is talking about prosperity4 who to my knowledge entered voluntary liquidation because of a legislation change rather than just going bust and leaving people unpaid.

Obviously things tough for everyone right now, and it is sensible to be more cautious, but an umbrella company is no more at risk than any other company. The safest thing you can do is to go with an established industry name rather than a company who are offering what seems to be the best deal. It's just the same sort of common sense checks you make when purchasing on the internet. None of this will guarantee solvency, but businesses that have been around for a while and are recommended by others are likely to be your best bet whatever the product or service.

But that's enough of doom and gloom, right now it's important to stay optimistic, if not for our own sakes, for the economy as a whole; apparently pessimism will only make things worse. It has to be true, I read it on the internet.

I hope the new year is treating you all well.

Hugo
08/01/2009