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View Full Version : PS IR35 - Paystream and still use ltd instead of umbrella - VAT?



psychocandy
21st June 2017, 08:59
Confused here. Apparently, if you do it this way, you have to charge vat.

At the moment, using normal umbrella, I just fill in timesheet, umbrella processes it and lumps into my current account.

I'm looking into payroll service instead, but, apparently, vat comes into it. OK say its £100 a day, I invoice £500+VAT = £600. Paystream get £600 off agency, deduct employer NI, employee NI, tax etc (call it £250). Do they then pay £250 (left after tax etc) PLUS the initial vat of £100 into company account? £250 of which I can pay to myself?

Fred Bloggs
21st June 2017, 09:00
Why not just ask them to explain?

MonkeysUncle
28th June 2017, 10:30
Confused here. Apparently, if you do it this way, you have to charge vat.

At the moment, using normal umbrella, I just fill in timesheet, umbrella processes it and lumps into my current account.

I'm looking into payroll service instead, but, apparently, vat comes into it. OK say its £100 a day, I invoice £500+VAT = £600. Paystream get £600 off agency, deduct employer NI, employee NI, tax etc (call it £250). Do they then pay £250 (left after tax etc) PLUS the initial vat of £100 into company account? £250 of which I can pay to myself?

If you are doing the payroll services path then why not do it yourself.
I was using Paystream umbrella but found them to be useless.
I know just do the payroll through my limited company.

So (using your example):
i invoice £500+VAT = £600
The agency take off NI/PAYE and pay me the rest + the £100 VAT.

I pay VAT at the end of my VAT period.

I found this to be easier than having to deal with Paystream constantly.

psychocandy
28th June 2017, 11:09
If you are doing the payroll services path then why not do it yourself.
I was using Paystream umbrella but found them to be useless.
I know just do the payroll through my limited company.

So (using your example):
i invoice £500+VAT = £600
The agency take off NI/PAYE and pay me the rest + the £100 VAT.

I pay VAT at the end of my VAT period.

I found this to be easier than having to deal with Paystream constantly.

Because the agency, Hays, are unwilling to do the NI/PAYE bit.

Hobosapien
28th June 2017, 11:34
Because the agency, Hays, are unwilling to do the NI/PAYE bit.

Probably due to how for a long time agencies have required contractors to use a Ltd rather than be self employed, so they avoid all the hassle of being the employer. Employee rights and being accountable for taxes and all that.

Not like Hays are some tinpot company that won't already have payroll in place for their true temps. :confused:

northernladuk
28th June 2017, 11:53
You sure about going with Paystream? There seems to be a couple of posts pop up that aren't that complimentary about them. Hate for you to be pissed of with them and have to moan to us constantly about it.

psychocandy
29th June 2017, 07:41
Bit dubious of using paystream but this is the only way to go ltd via the agency in question.
Waiting to speak to them today but basically, the way it works is:-

1. Submit invoice plus vat in the normal way.
2. Agency pass to paystream who deduct paye and ni.
3. They pay this PLUS the vat to limited.
4. You pay yourself.

Good points about this:-
1. Paystream will pay whatever you want from the money they recieve into a pension fund of your choice (my main reason for moving away from umbrella - not many are interested in doing anything other than the minimum).
2. It costs just £5 per invoice. (Previously, I was paying £24 a week, PLUS half fees to accountant to keep ltd going - Now its full accountancy fees plus £5 per week)

Things not so sure about:-
1. Paystream will only deduct PAYE as per basic rate taxpayer. Not sure if you'd have to then account for the rest monthly via ltd or just at end of year tax return? NI is a flat rate dependent on income that week isnt it so that should be ok I guess?

2. Obviously, still need to pay accountants fees etc. Ltd has zero income now effectively. Accountant mentioned being able to claim these costs back as expenses so saving on the tax but you wouldnt save NI (because paystream paid this out already)? Confused here.

So anyone else done similar?

TheFaQQer
29th June 2017, 09:21
Things not so sure about:-
1. Paystream will only deduct PAYE as per basic rate taxpayer. Not sure if you'd have to then account for the rest monthly via ltd or just at end of year tax return?

That sounds sensible.

Would you rather have a tax bill via self assessment at the end of the year and pay that, or overpay tax now and then have to claim that back? I'd sooner have the money in my bank and know I get the figure right, compared with someone else guessing it based on a singular point in time assumption about the work that I'll do in a year and then have to make sure it's correct in the future.

psychocandy
29th June 2017, 11:20
That sounds sensible.

Would you rather have a tax bill via self assessment at the end of the year and pay that, or overpay tax now and then have to claim that back? I'd sooner have the money in my bank and know I get the figure right, compared with someone else guessing it based on a singular point in time assumption about the work that I'll do in a year and then have to make sure it's correct in the future.

Yep fair enough. I just wasn't sure whether legally you were allowed to do it this way.

Otherwise, in perm employer could do the same. Tax you on basic rate allow you to stick the rest in bank account for few months which would be nice. Surely not allowed?

psychocandy
30th June 2017, 07:46
Paystream to be fair are totally crap. Completely clueless. Depends which person you speak to you get a different answer.

I thought it was all sorted at £5 per invoice but now apparently its 0.75% - bit of a difference!

To be honest, I'd can them but I'm keen to get away from umbrella and back using ltd. And these are the only ones agency will allow.

psychocandy
30th June 2017, 07:50
PayStream is voted Contractor UK’s umbrella provider of the year - Contractor Weekly (http://www.contractorweekly.com/business-news/paystream-is-voted-contractor-uks-umbrella-provider-of-the-year/)

2013 but feck me...... The rest must have been bad.

Saying that my recent experience of umbrellas has not been good. They all seem to employ staff on minimum wage who have little idea what they're doing. Its money for nothing for them.

One decent umbrella seems to be the nice lady who posts on here but my agency wont deal with them.

northernladuk
30th June 2017, 08:01
This gig is gonna be over by the time you get this sorted.

psychocandy
30th June 2017, 08:04
This gig is gonna be over by the time you get this sorted.

6 month extension starting soon! BOOOOOOMMMMMM

northernladuk
30th June 2017, 08:52
6 month extension starting soon! BOOOOOOMMMMMM

Oh crap :(

psychocandy
30th June 2017, 09:08
Oh crap :(

NLUK - when you wake up sweating in the middle of the night and log on to CUK I'll be here!!!! :devil:devil:devil

nosolog
6th July 2017, 18:12
You sure about going with Paystream? There seems to be a couple of posts pop up that aren't that complimentary about them. Hate for you to be pissed of with them and have to moan to us constantly about it.

I know a very poor agency who continually mention Paystream whereby they force contractors to use Paystream claiming that Paystream is the only 'regulated umbrella' out there and that in the event of taxes not being correctly paid the agency may face lawsuits if its contractors use a different umbrella. Essentially the agency is referring contractors to Paystream, one can only guess what reward is in it for the agency!

MrMarkyMark
6th July 2017, 18:16
NLUK - when you wake up sweating in the middle of the night and log on to CUK I'll be here!!!! :devil:devil:devil

You were still here when you were a Job Club regular.

So, I guess, that's kind of guaranteed.

You are a bit of a bed wetter though :tongue

SteelyDan
7th July 2017, 10:51
I know a very poor agency who continually mention Paystream whereby they force contractors to use Paystream claiming that Paystream is the only 'regulated umbrella' out there and that in the event of taxes not being correctly paid the agency may face lawsuits if its contractors use a different umbrella. Essentially the agency is referring contractors to Paystream, one can only guess what reward is in it for the agency!

I'm sure there's an agency [can't remember name] who are subtly linked in a business sense with Paystream...

midlandlass
13th July 2017, 10:49
One decent umbrella seems to be the nice lady who posts on here but my agency wont deal with them.

No names mentioned - but we have had an exception to the rule with said agency for one of our contractors, who said they would walk unless he could work with us - just saying :happy

midlandlass
13th July 2017, 10:51
I know a very poor agency who continually mention Paystream whereby they force contractors to use Paystream claiming that Paystream is the only 'regulated umbrella' out there and that in the event of taxes not being correctly paid the agency may face lawsuits if its contractors use a different umbrella. Essentially the agency is referring contractors to Paystream, one can only guess what reward is in it for the agency!

Hmmmm if the agency can prove they have done proper due diligence then there should be no issues in terms of liabilities :grin

psychocandy
13th July 2017, 13:48
No names mentioned - but we have had an exception to the rule with said agency for one of our contractors, who said they would walk unless he could work with us - just saying :happy

Ha ha - personally I think it should be illegal for agencies to refuse who they work with like this....