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PAYE from an umbrella company and clarification regarding the ILR

Posted: Mon Jul 25, 2022 5:47 pm
by roseburn
Applying for ILR in 5 years route having FLR(M)

I'm a contractor within IR35 regulations so getting paid as PAYE from an umbrella company, I'm bit confused on the below two items

1, what to select on the online ILR application form whether it is Permanent or temporary?

2, then on the supporting documents, i need to get a letter from the employer stating what type of employment i.e. whether is permanent/fixed term contract or agency ?

can you suggest on these please

Re: PAYE from an umbrella company and clarification regarding the ILR

Posted: Mon Jul 25, 2022 7:37 pm
by zimba
You will be treated as full time employee of the umbrella company

Re: PAYE from an umbrella company and clarification regarding the ILR

Posted: Mon Jul 25, 2022 9:45 pm
by roseburn
Thanks Zimba,

Shall i select as below ? and request the umbrella company to provide letter mentioning as permanent

1, what to select on the online ILR application form whether it is Permanent or temporary?

select as 'Permanent'

2, then on the supporting documents, i need to get a letter from the employer stating what type of employment i.e. whether is permanent/fixed term contract or agency ?

type of employment - 'Permanent'

Re: PAYE from an umbrella company and clarification regarding the ILR

Posted: Tue Jul 26, 2022 10:45 am
by Ticktack
roseburn wrote:
Mon Jul 25, 2022 9:45 pm
Thanks Zimba,

Shall i select as below ? and request the umbrella company to provide letter mentioning as permanent

1, what to select on the online ILR application form whether it is Permanent or temporary?

select as 'Permanent'

2, then on the supporting documents, i need to get a letter from the employer stating what type of employment i.e. whether is permanent/fixed term contract or agency ?

type of employment - 'Permanent'
Yep, it's permanent employment with the Umbrella companies! They pay your taxes PAYE.

Re: PAYE from an umbrella company and clarification regarding the ILR

Posted: Tue Jul 26, 2022 10:13 pm
by roseburn
thanks that helps.

Is my understanding right, i'm on non-salaried employment so i will have to submit last 6 months Payslips and the annual gross salary is calculated based on the below guidance ?

(Total gross income from employment held throughout the 6-month period, divided
by 6) multiplied by 12 = Income from non-salaried employment that can be counted
towards the financial requirement.

Re: PAYE from an umbrella company and clarification regarding the ILR

Posted: Thu Jul 28, 2022 5:09 am
by AmazonianX
Correct

Re: PAYE from an umbrella company and clarification regarding the ILR

Posted: Fri Jul 29, 2022 9:52 am
by roseburn
Thank you.

Another couple of questions that i need clarification and would be grateful if someone clarifies.

1, Payslip from Umbrella company is having three parts to the Gross pay -

a, Basic pay
b, holiday pay
c, Additional taxable wage

for the purpose proving financial requirements, the gross pay for the month will be calculated adding all three above components or (holiday pay and/or wage) need to excluded ?

2, I have some cash savings in the personal bank account, and this savings is from the employment that i have been doing for more than a year now - as per application i need to declare the source of savings, and i'm planning to submit bank statements and P60. Do i also need to do self assessment for the year ended march 2022 considering only income i have is from employment and tax has been deducted at source?

Re: PAYE from an umbrella company and clarification regarding the ILR

Posted: Fri Jul 29, 2022 10:31 am
by AmazonianX
roseburn wrote:
Fri Jul 29, 2022 9:52 am
Thank you.

Another couple of questions that i need clarification and would be grateful if someone clarifies.

1, Payslip from Umbrella company is having three parts to the Gross pay -

a, Basic pay
b, holiday pay
c, Additional taxable wage

for the purpose proving financial requirements, the gross pay for the month will be calculated adding all three above components or (holiday pay and/or wage) need to excluded ? I would think all makes up the gross income and does this go inline with what is in your employer letter? Let MODs and more knowledgeable persons confirm

2, I have some cash savings in the personal bank account, and this savings is from the employment that i have been doing for more than a year now - as per application i need to declare the source of savings, and i'm planning to submit bank statements and P60. Do i also need to do self assessment for the year ended march 2022 considering only income i have is from employment and tax has been deducted at source? Only if you are going through the cash savings route that's when you need to present and declare source of saving.

Re: PAYE from an umbrella company and clarification regarding the ILR

Posted: Fri Jul 29, 2022 3:48 pm
by roseburn
Thanks AmazonianX for your inputs, and will wait for MODs and other experts to suggest

1, yes this is what the umbrella contract says

holiday pay - Gross Pay is inclusive of my paid annual leave entitlement

Additional taxable wage - is dependent upon your own efforts on your assignment,

2, I'm planning to combine above umbrella employment with the cash savings : cat A + cat D

Re: PAYE from an umbrella company and clarification regarding the ILR

Posted: Sat Jul 30, 2022 2:03 pm
by roseburn
Appreciate if any one can guide me through on the above query…thanks

Re: PAYE from an umbrella company and clarification regarding the ILR

Posted: Tue Aug 02, 2022 6:21 pm
by roseburn
Reposting this, to get a last minute clarification. Any suggestions please

1, I think my earnings will most likely suffice CAT (A) financial requirements under non-salaried income, but just to be on the safer side i want to also include the cash savings option CAT (D) if incase one of the pay component in pay-slip not being accounted for.

Adding cash savings on top of the CAT (A) as above will be good idea or have a potential to confuse the CW.

2, Also the period i'm about to claim is from Feb 2022 to July 2022 - P60 only covers for the first two months - is that fine as well?

Re: PAYE from an umbrella company and clarification regarding the ILR

Posted: Wed Aug 10, 2022 9:33 am
by AmazonianX
roseburn wrote:
Tue Aug 02, 2022 6:21 pm
Reposting this, to get a last minute clarification. Any suggestions please

1, I think my earnings will most likely suffice CAT (A) financial requirements under non-salaried income, but just to be on the safer side i want to also include the cash savings option CAT (D) if incase one of the pay component in pay-slip not being accounted for. Appendix FM clearly states financial requirements If you earn at least £1550/month and have 6months payslips and can get corresponding 6months account statements OR you have cash savings of £62,500 then use either options and not both. If you use both and end up confusing the CW (it has happened before) and got unpleasant outcome to your application, you won't find it funny.

Adding cash savings on top of the CAT (A) as above will be good idea or have a potential to confuse the CW.

2, Also the period i'm about to claim is from Feb 2022 to July 2022 - P60 only covers for the first two months - is that fine as well? Yes, P60 not of relevance.

Re: PAYE from an umbrella company and clarification regarding the ILR

Posted: Sun Aug 14, 2022 3:03 pm
by michalc
In case anyone stumbles onto this: I was a very similar situation - a contractor inside IR35 paid via an umbrella company. But we put "Temporary" as the type of employment, and ILR was approved yesterday morning (yep - Saturday).

We did include letters from both the client and the umbrella - they confirmed it was fixed term contract. Admittedly it didn't ask for a letter from the client, but they are my de-facto employer (which is why I'm inside IR35 - it's de-facto employment), so it seemed appropriate to include such a letter.

I obviously can't speak to which is correct in general / in other cases. If it was the "wrong" thing, in our case it didn't hurt us enough to not grant ILR.