Newbie: PayStream the options

[PhilAtBFCA]

MyPayeSafeUmbrella

From what I understand in this thread, Paystream form your company, with you as the Director and then register you for flat rate vat, and then keep the "profit" on the vat reclaimed.
I assume they do this by charging your Limited Company a fee equivalent to the flat rate vat element.
I can see that you gain because there is no fee to you, Paystream earn their money from the vat.

But I was wondering how close this is to your company being an MSC with Paystream being an MSCProvider.

Although you may be the director and shareholder, but its obvious that Paystream are pulling the strings here of the company, after all there is no advice about joining the flat rate scheme, just a decision made for you.

I think its a clever idea for making a "no fee" umbrella. But I do think there is a risk here in an unknown area, i.e. where HMRC are going to choose to apply the legislation, where they may want to attack first.

If the your company were found to be an MSC then all the expenses would not atract tax relief, and tax would be payable on them. You personally are first in line for that bill.

Clever stuff invented for no real reason except to earn fees is not worth it , IMHO.

Phil

[davedave]

Apparently they have the backing of the Professional Passport scheme, which is HMRC approved for auditing schemes. According to them HMRC have approved the no fee scheme as compliant

[MPwannadecentincome]

They don't charge a weekly fee, you only pay 10% of any expenses processed, up to a maximum of £50. First £20 is free, so if you process £60 you only get chrged £4

That does not sound like a significant amount of extra take-home?

[MPwannadecentincome]

From what I understand in this thread, Paystream form your company, with you as the Director and then register you for flat rate vat, and then keep the "profit" on the vat reclaimed.
I assume they do this by charging your Limited Company a fee equivalent to the flat rate vat element.
I can see that you gain because there is no fee to you, Paystream earn their money from the vat.

But I was wondering how close this is to your company being an MSC with Paystream being an MSCProvider.

Although you may be the director and shareholder, but its obvious that Paystream are pulling the strings here of the company, after all there is no advice about joining the flat rate scheme, just a decision made for you.

I think its a clever idea for making a "no fee" umbrella. But I do think there is a risk here in an unknown area, i.e. where HMRC are going to choose to apply the legislation, where they may want to attack first.

If the your company were found to be an MSC then all the expenses would not atract tax relief, and tax would be payable on them. You personally are first in line for that bill.

Clever stuff invented for no real reason except to earn fees is not worth it , IMHO.

Phil

That seems to make sense - not for me then ltd co. a better option I think!

[davedave]

to be honest it's not much extra take home at all, about 10 - 15 quid a week for me. But I'm not on a massive rate so better in my pocket than the umbrella companies