UK Tax and Types of Deductions
PAYE
As you are probably aware, there are two types of deductions in the UK which apply to you. Pay as you earn (PAYE) and National Insurance (NI). Both of these we are legally required to deduct at source based on the current rate of National Insurance and tax contributions.
Under the PAYE scheme we will also pay you your accrued holiday pay and the statutory sick pay (SST).
In order to increase your take home per week; please consider the followings:
PAYE Umbrella Company
You may wish to work as an employee of an umbrella company.
Generally, pay rates are higher than the normal PAYE; however, holiday pay and statutory sick pay are not paid through your locum agency.
Other advantages include your ability to claim some basic expenses. The umbrella company will be able to advise you what expenses you are able to claim. Please make sure that you choose a reputable umbrella company to work with.
Your typical take home by working under an umbrella company is around 60% - 65% of your contact pay.
Limited Liability Company
You may also wish to set up and work for your own Limited Liability Company.
Your accountant should be able to help you with this set up. Please note that this company must be genuine. Also make sure that it is a dedicated one-person limited company and not part of a contractor service company.
Your accountant will advise you what expenses you are able to claim.
Your typical take home by working through your own limited company is around 75% - 80% of your contract pay.
If you need further guidance on the above-mentioned, please contact your dedicated Bank Anthony Recruitment Consultant who will be able to offer useful suggestions.
