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  1. #1

    Ddraig Goch


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    Default PS IR35 - Paystream and still use ltd instead of umbrella

    Anyone do this?

    Umbrella costs approx 100 a month. In the meantime, I've still got ltd I want to keep going - 1/2 fees at 57 a month. Total 157 a month.

    Looking into this solution from paystream. 5 per week. With full accountancy fees of 114 then. Total approx 136. Would be easier if agency would do but they won't do it.

    How does this work if you keep ltd? I understand with umbrella they're your employer and they do all the payroll and tax and just provide you with the net.

    Is it different if you still use ltd and paystream? Or do they just deduct things like employer ni and then pass the rest to ltd for you to sort out your own NI and PAYE (or your accountant at least)?
    Last edited by psychocandy; 20th April 2017 at 09:28.
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  2. #2

    Still gathering requirements...

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    Yes this is possible, and I know an Accountancy Contractor Specialist firm that has a solution to only pay one fee for both services (Umbrella and Ltd Company)...

  3. #3

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    Is it just 5 per week though? You've added the LTD costs in monthly figure in the first example but not the second and mentioned weekly. Great comparison.
    Last edited by northernladuk; 20th April 2017 at 09:29.
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  4. #4

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    AFAIK, it's not changed in the past two days when you asked the same kind of question (or even from when I wrote the FAQ which you've read):

    Quote Originally Posted by TheFaQQer View Post
    It has to be the fee payer - the law is quite clear on this.

    If you are direct, that's the client.

    If you are via an agency and there are no other companies in the mix, it's the agency.

    If you are via an agency and there are other companies in the chain, then it's the company closest to the intermediary that is used by the individual (eg a payroll company paying your limited company).

    Fee payer = the company that pays the fees to your company.

    If you use an umbrella company then this is all irrelevant.
    Quote Originally Posted by TheFaQQer View Post
    Inside IR35 in public sector, the fee payer must make the calculation and deduct the tax before paying net to the contractor.

    Which is why trying to involve a payroll company is just stupid because you're going to pay someone else to receive the gross amount from the agent / client, calculate and deduct the tax and pay the net amount to your company. Kind of like an umbrella really, but paying the limited company rather than the individual - it adds no benefit.
    But I'll say it yet again:

    In the public sector, the fee payer must deduct the tax and National Insurance before paying the contractor company the net value.

    If Paystream are going to make that payment for the agency, and are prepared to take on the legal liability of being the fee payer if the assessment made by the client is incorrect, and are only charging 5 a week then that would ring alarm bells with me.
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  5. #5

    Ddraig Goch


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    Quote Originally Posted by northernladuk View Post
    Is it just 5 per week though? You've added the LTD costs in to the first example but not the second.
    Added now. Slightly cheaper and also preferred for me at least.
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  6. #6

    Ddraig Goch


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    Quote Originally Posted by TheFaQQer View Post
    AFAIK, it's not changed in the past two days when you asked the same kind of question (or even from when I wrote the FAQ which you've read):





    But I'll say it yet again:

    In the public sector, the fee payer must deduct the tax and National Insurance before paying the contractor company the net value.

    If Paystream are going to make that payment for the agency, and are prepared to take on the legal liability of being the fee payer if the assessment made by the client is incorrect, and are only charging 5 a week then that would ring alarm bells with me.
    Yes this appears to be the case. The agency in question appear to have worked out a deal with them to do this - presumably because they really don't want to do it themselves.

    I guess they feel forced to offer this but are still strongly pushing umbrella....
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    Quote Originally Posted by psychocandy View Post
    Added now. Slightly cheaper and also preferred for me at least.
    So you are doing all this buggering about for 11 quid a month and a some (possibly) misguided preference? Why don't you just use a brolly and get on with it like everyone else?

    What are the benefits to your preferred solution?
    Last edited by northernladuk; 20th April 2017 at 09:33.
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  8. #8

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    Quote Originally Posted by psychocandy View Post
    Yes this appears to be the case. The agency in question appear to have worked out a deal with them to do this - presumably because they really don't want to do it themselves.

    I guess they feel forced to offer this but are still strongly pushing umbrella....
    There's no "appears to be the case" - the law is clear. The fee payer MUST deduct employers NI, employees NI and PAYE before paying your company. The fee payer takes on the legal liability for the assessment made by the client. The fee payer CANNOT pass this liability anywhere else.

    So, for 5 a week, they have to make the calculation, deduct the NI and tax, pay that to HMRC, and accept the liability for anything that goes wrong in a decision for which they have no input. As I said, that would set alarm bells ringing with me.
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    Quote Originally Posted by northernladuk View Post
    What are the benefits to your preferred solution?
    Benefits - 11 saving, no more posts about using an umbrella

    Downsides - cannot pay into pension, payroll company has to accept liability for client decision (how deep are the pockets?), agency doesn't really want to do this, already committed to an umbrella company, requires a change of contract to make the change, more posts about using a payroll company.

    I can see why that 11 a month is the important thing.
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    Quote Originally Posted by TheFaQQer View Post
    Benefits - 11 saving, no more posts about using an umbrella
    You want to put money on that?
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