Tax information and Umbrella Companies
Like New Zealand UK has a staggered tax system - the more you earn, the higher the tax rate.
We'll help you organise a NI number on your arrival or will assist you with an 'Umbrella Company' as detailed below
If you choose to go down the PAYE route, the tax office will also allocate you a tax code which will be used by employers to deduct the relevant tax from your salary. This will be dependant on your annual earnings.
To begin with you will start work on a ‘basic rate of tax’ (code BR) while your actual tax code is being arranged.
Under the UK Pay As You Earn (PAYE) tax scheme each person is allocated a yearly amount of tax-free earnings (approximately £4,800). If you work with more than one employer you need to decide to which employer you will allocate your tax-free earnings.
Working as a Limited Company 'Umbrella Company'
Many teachers from overseas working through Prospero are currently able to offset a wide range of business expenses against what they earn, which means their income tax and national insurance liabilities are reduced and as a result their take home pay is increased.
Examples of expenses that may be claimed back depending upon circumstances are:
- Flights to the UK and back home
- Accommodation (rental, hotels or B&B)
- Transportation costs (public & private) incurred in travel to and from work, plus parking fees
- Some flight costs for immediate family
- Limited car hire costs
- 'Home-as-office’ and stationery expenses
- Daily subsistence e.g. some meal costs
In order for you to take advantage of this, Prospero and BUZZ can process your pay differently to the PAYE method.
Specialised payroll service providers can facilitate this using what is known as an ‘umbrella solution’.
These 'Umbrella Solutions" will also increase your daily pay rate by 9% as we are no longer required to pay employers national insurance.
To work in the UK via an ‘umbrella solution’ route is relatively simple and dependent upon your circumstances could well prove to be financially rewarding.
We'll walk you through the benefits and help you get it all sorted when you arrive on the ground!
