A week or so ago I asked about the use of loans as part of an agency worker's pay and the replies were very helpful. During the period under reveiw by HMRC my niece has used 3 different umbrella agencies. The last agency has just been taken over by a new one. Her payslip from no.4 shows the salary ytd as the same as her salary for that week. I enquired whether agency no. 3 would be issuing a P45, if not, why didn't the payslip show her accumulated pay. That query wasn't answered - i was told that the new agency would get back to the previous one. 3 of the 4 agencies calculate PAYE on about half of the salary (after various deductions). The remaining part has been described as a loan (already discussed), business income, and 'umbrella'. My queston is - agency no. 3, when asked, told me that 'business income' was a dividend and because she had received less than £5000, this would not be taxed. ( Obviously the man I spoke to had no idea that the threshold has been reduced for the current year) How can the agencies get away with this behaviour? Why aren't HMRC going after the agencies, rather than the contractors who are often forced to use them?
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“agency no. 3, when asked, told me that 'business income' was a dividend and because she had received less than £5000, this would not be taxed. ( Obviously the man I spoke to had no idea that the threshold has been reduced for the current year)”
Shocking. Prey tell, did your niece get issued with a share certificate and dividend voucher?