Deductions from wages

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    Can anyone help with this…… ❓

    I have a claimant who is working for an agency, and is paying the agency a fee to work out national insurance and tax deductions, and to pay these to the appropriate place. The fee is not tax and national insurance deductions, but an administrative charge.

    I think that this fee should not be deducted from the wages, but cannot find relevant caselaw to support the reason why it should not be deducted – Can anyone help please?



    Regulation 36 of the HB Regs 2006 deals with the calculation of net earnings of employed earners. This regulation says net earnings are calculated from the gross earnings less:

    income tax;
    class 1 national insurance contributions;
    half of any occupational or personal pension scheme.

    John Boxall

    Is he an employee or self employed?

    From what you have said it seems that he is self employed in which case it’s a business expense.

    If he’s ’employed’ then the employer has to deduct his tax and NI at no charge to the employee.

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield


    To me he looks like an employee rather than self employed – he is a contractor employed by an agency, so think we cannot count it as a self employed expense

    Thanks for all your replies so far



    What class of NI contrtibutions is the agency passing on?

    The NI will determine whether or not he is self employed

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