Anyone using Kinsella or PaySchemePlus?

[tim123]

So the question has to be, what mechanism are you all using for invoicing and payment? Running a Ltd Co, using an umbrella, or a composite? PAYE??!

What is a good return figure? Is 75%+ too optimistic?

I read on here that someone was achieving 80% by using their own Ltd Co. I can't for the life of me see how that is possible - legally.

Close to 80% is achievable by making sure that all of your income is taxed at 22% or less and that you pay no NI.

The latter is achieved by a low salary, high dividend strategy. The former is achieved by dividend sharing with other directors (who have no other income). The numeb of others that you need depends upon turnover.

Both require you to have an IR35 friendly contract. The "arctic" case is an attempt by the IR to stop dividend sharing being tax efficient.

The low salary route buggers normal pension planning so you have have another solution to this.

Of course, not everybody can achieve this ideal, either because their total take is too high, or because they do not have non working acquaintances with whom they can usefully dividend share.

HTH

timbo

[ChimpMaster]

The issue - if I can call it - I face is that my daily rate is quite high and my expenses are very low. For expenses we're talking in the region of £500 / month whereas gross income is over 20 times that figure.

I don't overstretch (or 'over-create') on expenses, sticking closely to my accountant's advice. As I stay at home my only expenses are train fare, telephone, internet connection, accountant's fees and small sundry items. I have an IR35 friendly contract.

What I'm trying to get to, is that with a high income and low expense structure, it's not possible for me to achieve the purported 79% figure you advertise.

I barely manage 65% using a low-ish salary (not minimum wage) and dividend structure. My wife works so I cannot make use of her tax allowances. If it were possible to get anywhere near 80%, I'd be over the moon, and I'd send you a nice bottle of champers to boot!

But what with 660, and until Arctic resolves, surely you're all taking a risk not too dissimilar to those offshore loan companies?

Thanks for your advice guys.

BTW I tried to call PaySchemePlus to get more info -- what a load of clowns. The phone rang and rang for about 5 minutes, then someone picked it up and put it straight back down. I tried calling at several points during the day but no answer. STAY AWAY FROM PAYSCHEMEPLUS !!!

[Tex]

The low salary route buggers normal pension planning so you have have another solution to this.

Although not from April 2006 when the age based formula limiting pension contributions to a certain percentage of income is being removed so that you can invest 100% of annual income, up to a maximum £215,000 pa, in a pension and receive tax relief, subject to a lifetime limit of (I think) £1.5m. Do not exceed that limit as anything above that gets subject to ludicrous tax of something like 70% (yes, really)

[malvolio]

Bit like me, then - City rates, expenses of around £1200 a month (rail fares, light lunches, occasional team meetings down the wine bar). Point is, I don't pay them, the company does since they wouldn't be incurred if I wasn't working. So they never go anywhere near my income stream. Mileage does, since it's my car, not the company's, but that's not that much anyway.

But expenses are tax neutral. Once you're into higher rate tax, you can't make 79% anyway, best you can hope for is around 67%, so you're not doing that badly. And like you, She Who Must Be Obeyed now earns enough to take her into higher rate tax all on her own, so there's no point in her having shares in the company any more (although that may change when she retires in a few years!).

And ignore S660a - despite all Hector's puffing and blowing, there will not be a resolution for at least two years and nobody can expect you to jump through hoops now in case there's a change then. The current rules are as we always understood them to be, so go with them. The difference is you can challenge Hector if you think he's wrong, you can't challenge ephemeral get-rich-quick schemes, when they take all your money.

[Epiphone]

A mate of mine uses PAyschemeplus and is raking it in. The downside is that if Hector ever so much as glances at him he'll probably do five years in chokey. Sure he can claim anything and everything on expenses and PSP don't give a sh!t cause you have to sign a get out clause for them so if the smelly stuff hits the fan they've been paid and you're left with your pants round your ankles as Gordon Brown lubes up...

[Rebecca Loos]

I don't think you have understood Payscheme+ if you think it's an all-about-expenses scheme.
I use them and I have stopped claiming any expenses since it wasn't useful any more. I do have expenses that I could pass on but I don't even have to.

So yes it is a dodgy scheme, borderline, risky, probably very very challengeable etc etc but it's nothing to do with expenses.

[ChimpMaster]

I don't think you have understood Payscheme+ if you think it's an all-about-expenses scheme.
I use them and I have stopped claiming any expenses since it wasn't useful any more. I do have expenses that I could pass on but I don't even have to.

So yes it is a dodgy scheme, borderline, risky, probably very very challengeable etc etc but it's nothing to do with expenses.

So out of interest, if they are so dodgy, why do you use them?

I understand the loan mechanism but I don't understand how it is legal. I also don't understand why they can't answer a call from a potential customer!

Are you paying the loans into an offshore account (back home perhaps) ?

[malvolio]

The thing to remember about our Rebecca is that she has a clear and effective exit strategy. UK citizens don't have that luxury...

[Epiphone]

I don't think you have understood Payscheme+ if you think it's an all-about-expenses scheme.
I use them and I have stopped claiming any expenses since it wasn't useful any more. I do have expenses that I could pass on but I don't even have to.

So yes it is a dodgy scheme, borderline, risky, probably very very challengeable etc etc but it's nothing to do with expenses.

I haven't misunderstood anything 'cause I don't use them. All I know is people that use them claim very spurios expenses (I shall quantify that by adding "amongst other things") which, personally, puts me off them.

If you use them and like them then fill yer boots.

[Rebecca Loos]

you're right, I should have said "if people use them and achieve savings through spurious expenses claims, then they haven't fully understood the mechanism"
But whatever
Yes it is reassuring to have an exit strategy

May I point out though that the scheme is not actually illegal as the rules stand now.
But since HMRC is allowed legally to change the rules at any moment, retrospectively too, it is very likely that the scheme will become illegal whenever HMRC happen to look at it and decide they don't like it.
But surely this is true of any scheme, including people who think they are outside IR35, people who pay themselves dividends worth £000s from one company share only, .... anything has got the potential to be retrospectively illegal - in theory.

The fact that Payscheme+ offered you poor customer service is disappointing however. I think I only ever have to call them when I got started, and never since. It's not a good look.

cause you have to sign a get out clause for them

No. I never had to sign any such clause. Not sure what you are referring to.