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Payeworx

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    #21
    Payeworx

    Requested illustration and then received a call from the owner

    Umbrella company is part of a “holding company” which your personal limited company holds shares

    Example:
    19k paid via umbrella (min wage)
    350 per week fee to “holding company”
    Corp tax paid by holding company and dividend paid to limited.
    Limited runs as normal

    Basically the same method used by “hybrid Umbrella” companies in Ireland

    I’m sure that will give HMRC something to chew over ???
    Should be a good test case in court ?

    Comment


      #22
      Originally posted by Jockaby View Post
      Requested illustration and then received a call from the owner

      Umbrella company is part of a “holding company” which your personal limited company holds shares

      Example:
      19k paid via umbrella (min wage)
      350 per week fee to “holding company”
      Corp tax paid by holding company and dividend paid to limited.
      Limited runs as normal

      Basically the same method used by “hybrid Umbrella” companies in Ireland

      I’m sure that will give HMRC something to chew over ������������������
      Should be a good test case in court ������
      Nope - HMRC will say you aren't pay tax correctly and just bill you the correct amount.

      Keep away unless you want years of pain.
      merely at clientco for the entertainment

      Comment


        #23
        Originally posted by eek View Post
        Nope - HMRC will say you aren't pay tax correctly and just bill you the correct amount.

        Keep away unless you want years of pain.
        Just had chat with them...they are adamant they a) comply with IR35, I have to agree with this and b) Comply with tax laws, I'm not qualified to comment but they claim they pay the correct tax and NI at the front end..i.e on the initial £18k, the rest will be paid to you via Dividends as explained above and you will of course be liable to pay tax on this amount, be it Corp tax or dividend tax.

        As I dont intend earning much each year..maybe not even above the £12.5k tax threshold then it wouldnt help me.

        Comment


          #24
          It’s not IR35 you have to worry about, it’s TAX AVOIDANCE.

          All EBT and Loan Scheme provider’s were/are adamant that they comply with whatever tax rules they are trying to get around.
          "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
          - Voltaire/Benjamin Franklin/Anne Frank...

          Comment


            #25
            Originally posted by andydd68 View Post
            Just had chat with them...they are adamant they a) comply with IR35, I have to agree with this and b) Comply with tax laws, I'm not qualified to comment but they claim they pay the correct tax and NI at the front end..i.e on the initial £18k, the rest will be paid to you via Dividends as explained above and you will of course be liable to pay tax on this amount, be it Corp tax or dividend tax.

            As I dont intend earning much each year..maybe not even above the £12.5k tax threshold then it wouldnt help me.
            What they aren't telling you is that you and solely you are responsible for correctly reporting and paying your tax bill and as the money was paid to the umbrella to be used as income, HMRC will expect to see it appearing as income...

            Now you may get away with it from April 2020 to say January 31st 2022 when you send in your self-assessment return but when the return doesn't match what HMRC expect it won't be them fixing your mistake...
            merely at clientco for the entertainment

            Comment


              #26
              Ask if they have a DOTAS number

              Comment


                #27
                Hold on, so if you work for a consultancy firm and your salary is £30k a year, but the firm charges £800 per day for your services, how would that be illegal?

                Every service provider does that, Microsoft Consultant is charged at £750 a day but the consultant receives a salary of £45k a year. Now your LTD company has a share in the Consulting Firm, in this case the Umbrella, therefore your salary is £18k and the LTD company receives £50k in dividends. Your LTD does whatever it wants with that money. You can then get as dividend payout or they could invest in something else. Either way, you still pay your tax on the dividends received, or not get any money, therefore not avoiding tax.


                The only issue I can see is you trusting them to pay your LTD the dividend. If they do it monthly then great.


                I never understood why your LTD company cannot be used as an Umbrella, keeping a small % as the processing fee and paying the correct PAYE. Why use an Umbrella company when your LTD company can do the exact same thing? You already have Pay Roll running, you'll just have to give yourself a much higher salary and pay the correct taxes and NIC.

                The other thing I can't get my head around is Public Sector contractors that have been doing the same role for years and yet they are still Outside IR35. I know a few of them in the NHS... gonna be honest, kinda pisses me off that they can still do it and I am forced to look at closing shop and going Umbrella.
                Last edited by Drei; 28 February 2020, 14:03.

                Comment


                  #28
                  Originally posted by Drei View Post
                  Hold on, so if you work for a consultancy firm and your salary is £30k a year, but the firm charges £800 per day for your services, how would that be illegal?

                  Every service provider does that, Microsoft Consultant is charged at £750 a day but the consultant receives a salary of £45k a year. Now your LTD company has a share in the Consulting Firm, in this case the Umbrella, therefore your salary is £18k and the LTD company receives £50k in dividends. Your LTD does whatever it wants with that money. You can then get as dividend payout or they could invest in something else. Either way, you still pay your tax on the dividends received, or not get any money, therefore not avoiding tax.


                  The only issue I can see is you trusting them to pay your LTD the dividend. If they do it monthly then great.


                  I never understood why your LTD company cannot be used as an Umbrella, keeping a small % as the processing fee and paying the correct PAYE. Why use an Umbrella company when your LTD company can do the exact same thing? You already have Pay Roll running, you'll just have to give yourself a much higher salary and pay the correct taxes and NIC.

                  The other thing I can't get my head around is Public Sector contractors that have been doing the same role for years and yet they are still Outside IR35. I know a few of them in the NHS... gonna be honest, kinda pisses me off that they can still do it and I am forced to look at closing shop and going Umbrella.
                  Only £750 a day - that's cheap and the rest of it doesn't work either - it's a tax avoidance scheme that HMRC would drop on from on high.
                  Last edited by eek; 28 February 2020, 14:29.
                  merely at clientco for the entertainment

                  Comment


                    #29
                    Originally posted by Drei View Post
                    Hold on, so if you work for a consultancy firm and your salary is £30k a year, but the firm charges £800 per day for your services, how would that be illegal?

                    Every service provider does that, Microsoft Consultant is charged at £750 a day but the consultant receives a salary of £45k a year. Now your LTD company has a share in the Consulting Firm, in this case the Umbrella, therefore your salary is £18k and the LTD company receives £50k in dividends. Your LTD does whatever it wants with that money. You can then get as dividend payout or they could invest in something else. Either way, you still pay your tax on the dividends received, or not get any money, therefore not avoiding tax.


                    The only issue I can see is you trusting them to pay your LTD the dividend. If they do it monthly then great.
                    I guess it all depends on how Payworx pays your LtdCo, it can't be a "normal" shareholding as YourCo payment of dividends has to be at the same level as everyone else's. Then you are looking at alphabet shares which although not illegal it need to be handled very carefully

                    Alphabet shares: Get the details right | AccountingWEB
                    Originally posted by Stevie Wonder Boy
                    I can't see any way to do it can you please advise?

                    I want my account deleted and all of my information removed, I want to invoke my right to be forgotten.

                    Comment


                      #30
                      Originally posted by SimonMac View Post
                      I guess it all depends on how Payworx pays your LtdCo, it can't be a "normal" shareholding as YourCo payment of dividends has to be at the same level as everyone else's. Then you are looking at alphabet shares which although not illegal it need to be handled very carefully

                      Alphabet shares: Get the details right | AccountingWEB
                      And you've just invented the MSC again by another name and they are completed banned.
                      merely at clientco for the entertainment

                      Comment

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