I've recently been made unemployed from a job I have had for many years and decided to try my hand at contracting. I have been researching the in's and out's of it for several weeks, and I can't seem to get my head around the whole payment of employers NIC. If I am going through an umbrella company (which I plan on doing), why am I liable to pay their NIC?
Also (and this is my main point/question), I am aware that most agencies will offer two rates - A PAYE (through the books) and an Umbrella rate. How much higher should the umbrella rate be to take into account this extra tax? Should I also make sure the umbrella rate is high enough to offset the umbrella company's fee?
I'd appreciate all the help you can give as I have already received two contract offers and need to give them an answer by Wednesday!
Thanks in advance
IL