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Agency using payroll company


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Hi everyone

 

Hope someone can advise on this.

 

My daughter worked for an agency in an education establishment from September 09 until July 10. She has been asked to return this September.

 

Last year she was on £8.00 an hour plus her accrued holiday. She was told that she will now be on £9.00 an hour plus she is able to claim expenses such as lunch and travel as the agency is now using a payroll company. She has signed and has been sent a personal illustration.

 

This shows her gross wage (30 hours) but also shows that her holiday pay and expenses are actually part of the £9.00 per hour and she will also pay an adminstration fee to the payroll company, thereby ending up with a lot less net salary than she had on £8.00 per hour.

 

Has anyone encountered this before?

 

Obviously she will go back anyway because she was perfectly happy with the payrise and didn't apply for other positions.

 

Thank you for any help that can be given

 

Eve

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Hi everyone

 

Hope someone can advise on this.

 

My daughter worked for an agency in an education establishment from September 09 until July 10. She has been asked to return this September.

 

Last year she was on £8.00 an hour plus her accrued holiday. She was told that she will now be on £9.00 an hour plus she is able to claim expenses such as lunch and travel as the agency is now using a payroll company. She has signed and has been sent a personal illustration.

 

She can only claim expenses permitted by HMRC, whoever is managing the payroll. If she is on a normal work placement, then under no circumstances can she claim travel expenses as this is normal 'commuting' at her expense. Such expenses reimbursements would only be permitted if she were asked to work at another place temporarily and if the distance were further than normal - then the difference in mileage could be reclaimed. Likewise lunches. They are only reclaimable (as far as I am aware) for businesses where the purpose is solely in business generation, or where an employee is put to additional expense over and above the normal course of employment. Taking a prospective client out may therefore be permitted, but not a lunchtime sandwich as HMRC would view such consumption as necessary irrespective of whether the individual was at work or not.

This shows her gross wage (30 hours) but also shows that her holiday pay and expenses are actually part of the £9.00 per hour and she will also pay an adminstration fee to the payroll company, thereby ending up with a lot less net salary than she had on £8.00 per hour.

 

Read the terms very carefully before committing to anything. Although Rolled Up holiday pay is contrary to EU legislation, it is permitted in the UK as long as the employee is aware that a part of their pay represents holiday pay, or is reserved in trust until holiday is taken. Your daughter also needs to understand what would happen if she were to break the agreement with the Umbrella Company (as they are commonly referred to.

Has anyone encountered this before?

 

Yep - common practice but with a BIG 'Beware' sign attached. There have been many questions posted here and elsewhere after people have found themselves without a P45 or being charged for outstanding 'fees' after they change their employment. In many of these arrangements the individual becomes an employee of the Umbrella Company rather than the place that they work, which can cause later problems with employer disputes etc. Not to say that they should all be tarred with the same brush, just that I am not comfortable with the nature of some of the contracts involved.

 

Obviously she will go back anyway because she was perfectly happy with the payrise and didn't apply for other positions.

 

Thank you for any help that can be given

 

Eve

 

Some useful reading may be found HERE

 

Relevant CAG post HERE

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Thank you so much Sidewinder, for your indepth answer to my query. You have helped very much indeed and I will follow your links and try to do some research.

 

She and colleagues of the agency were invited to a meeting a month or so ago and were told that the education establishment had wanted them back this September. They were told that the agency would now be using a payroll company and they all signed there and then.

 

My daughter did receive a pack in the post but put it away with just a quick glance over. It was only in the last couple of days that a colleague who had been away all summer and missed the meeting contacted her. This colleague had been sent a personal illustration and had been very concerned and didn't understand. She telephoned the agency and was told if she didn't sign she wouldn't be able to return to work at the education establishment.

 

My daughter showed me the pack and we have gone through it (must admit that the jargon went over my head) but the illustration certainly seemed to show that the £9.00 hour included her holiday pay and expenses as I had written in my original message and certainly started the bells ringing in my mind.

 

It would seem that my daughter has actually signed up, so we must definitely look in detail to see exactly what her position is.

 

Once again Thank you indeed.

 

Best wishes

Eve

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I wonder hwo the tax would work on that as it would be based on the £9 per hours instead of the lower rate, i.e. if she were paid £8 she is taxed on that and when she goes on holiday she is taxed on £8, however here she is being probably taxed at £9 as it si inclusive. Not sure what sort of difference it woudl make..

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