Hi all,
I've been contracting for a little while through an umbrella company but recently got a new contract job and the agency suggested that I get in touch with Paystream to see whether a limited company would be a better solution for me.
I spoke to them and gave the relevant details of my contract including hourly rate, etc etc, and they emailed me a breakdown of what they could offer. One thing in particular puzzled me, and I wanted to run it by others who have more experience with such things. They advised me that they would be able to get me 89% of my gross earnings after their fees and taxes. When I looked at the details though, I saw that they had included an estimation of £140/week in expenses. I'm not disputing the expenses as it may be possible that I would be able to justify £140/week in expenses including travel, however, Paystream appear to have added the full £140 of expenses as 'income'. As I understand it, this shouldn't be the case, because if you have an expense (eg train ticket), you have to first pay for it out of pocket and then be reimbursed by your limited company. As such, as you're not GAINING the money spent on the expense, you're simply having the company to pay for it so as to reduce the taxable income of the company. If I understand correctly, given corporation tax of 20%, that would mean that there would be a net gain of £28/week compared to paying for it yourself, rather than £140/week.
Has anyone else dealt with Paystream and am I right in thinking that they are being quite dishonest with how much of your gross earnings they can provide? I've attached a screenshot of their breakdown in the link below in case it helps to understand my question better. I did flag it when speaking to them initially as it didn't make sense to me, but they assured me the breakdown was all correct and there was nothing to be concerned by. It was only after finishing the call and thinking about it further that was confident that they were being over creative with their numbers. What do you think of their breakdown? Is there anything else I should be wary of?
Breakdown screen capture:
http://s12.postimg.org/v7pto7bwt/Paystream.jpg
I've been contracting for a little while through an umbrella company but recently got a new contract job and the agency suggested that I get in touch with Paystream to see whether a limited company would be a better solution for me.
I spoke to them and gave the relevant details of my contract including hourly rate, etc etc, and they emailed me a breakdown of what they could offer. One thing in particular puzzled me, and I wanted to run it by others who have more experience with such things. They advised me that they would be able to get me 89% of my gross earnings after their fees and taxes. When I looked at the details though, I saw that they had included an estimation of £140/week in expenses. I'm not disputing the expenses as it may be possible that I would be able to justify £140/week in expenses including travel, however, Paystream appear to have added the full £140 of expenses as 'income'. As I understand it, this shouldn't be the case, because if you have an expense (eg train ticket), you have to first pay for it out of pocket and then be reimbursed by your limited company. As such, as you're not GAINING the money spent on the expense, you're simply having the company to pay for it so as to reduce the taxable income of the company. If I understand correctly, given corporation tax of 20%, that would mean that there would be a net gain of £28/week compared to paying for it yourself, rather than £140/week.
Has anyone else dealt with Paystream and am I right in thinking that they are being quite dishonest with how much of your gross earnings they can provide? I've attached a screenshot of their breakdown in the link below in case it helps to understand my question better. I did flag it when speaking to them initially as it didn't make sense to me, but they assured me the breakdown was all correct and there was nothing to be concerned by. It was only after finishing the call and thinking about it further that was confident that they were being over creative with their numbers. What do you think of their breakdown? Is there anything else I should be wary of?
Breakdown screen capture:
http://s12.postimg.org/v7pto7bwt/Paystream.jpg
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