Reply to: Paystream - admin charge out of Gross pay and not Total umbrella income

[Mikexx]

call paystream, tel them if they don't change their operational model to suit you, you'll....
you'll....
stamp your feet, and cry and cry and cry until you're SICK!!

That's not very helpful; is it?

If I do phone them it will be to say I have jumped.

[sadkingbilly]

call paystream, tel them if they don't change their operational model to suit you, you'll....
you'll....
stamp your feet, and cry and cry and cry until you're SICK!!

[Mikexx]

Because it’s your choice. If you chose not to use salary sacrifice, then you wouldn’t pay the £8 monthly fee (or whatever the exact amount is). It is not the umbrella company that is forcing you to use salary sacrifice whatever way you have it set up, it is your personal choice.
Or, if you are able to look at it objectively, why should your personal decision be taken out of their income?

Of course it's my choice. But I don't see your argument, especially when you might see the very name salary sacrifice a contradiction. It would be rational to beleive that costs and admin charges asssociated with this would also be a 'salary sacrifice'.

I am also making a NEST pension payment out of net income. While 20% tax gets added back in from the government I still pay NI on these payments.

I have contacted another umbrella company and they are very clear that all fees and admin charges, including those associated with a salary sacrifice, are made out of the total umbrella income. I have no idea why PayStream are different.

[Protagoras]

No, it's not my choice any more it is my personal decision to use PayStream ..

I don't quite follow how your personal decision isn't your choice.

If you don't like the terms offered by your umbrella 'employer' is there something that's preventing you moving to another one whose terms are more attractive?

[WTFH]

No, it's not my choice

OK, who at Paystream FORCED you to do salary sacrifice, if you say it was not your choice?
You made the choice of salary sacrifice. It’s not HMRC or some mythical law that says any options YOU choose must be paid for by someone else. At one point in your life you have to man up and accept that you are responsible for the choices you make, and some of those require you to pay admin fees that you wouldn’t have to pay if you didn’t make those choices.

[Mikexx]

Because it’s your choice. If you chose not to use salary sacrifice, then you wouldn’t pay the £8 monthly fee (or whatever the exact amount is). It is not the umbrella company that is forcing you to use salary sacrifice whatever way you have it set up, it is your personal choice.
Or, if you are able to look at it objectively, why should your personal decision be taken out of their income?

No, it's not my choice any more it is my personal decision to use PayStream, yet their fee is paid out of Total Umbrella Income. It is their choice to make the admin charge out of PAYE income. I had hoped for a pointer to case law, HMRC rules or statute law but still no independent justification.

[sadkingbilly]

Sometimes I think

aye, - right

[willendure]

Sometimes I think that going inside IR-35 would be bad, not because of the extra tax, but simply because you have another layer of admin deciding how your money is dealt with. Love having my own Ltd and being able to calculate all my taxes and expenses correctly without having to argue with idiots.

[woody1]

We're talking peanuts* in the grand scheme of things, aren't we?

* or a couple of cups of Starbucks a month

[WTFH]

Are you saying is there is no legal basis for doing this and it is their choice? Seems crazy to me and the best way to upset their clients.

No, it's YOUR choice. YOU chose to have a salary sacrifice, and as such, you need to pay the fee for processing that. YOUR choice.
If you go into a restaurant and choose something off the menu and then there are extras (like veg, potatoes, sauces, etc) and you choose NOT to have any of the extras, then you don't pay for them. If you choose to have the extras, then you pay the extra amount for them. It is not the restaurant that absorbs the cost of every choice you make.

[WTFH]

I've just checked the OP's posting history, he's wanting an answer from us that he isn't going to get.
His use of the word "legal" is a common one from people who are looking for a way out of a situation that they chose to get themselves into without understanding beforehand.

The additional admin charge is for his choice to do salary sacrifice. His choice. The umbrella fee is something that everyone who uses them will pay, irrespective of whether they do salary sacrifice or not. Any fees for optional extras are separate to the umbrella fee and come out after the standard umbrella fee has been taken.

[Protagoras]

Some umbrella companies charge a fee for the 'optional service' of salary sacrifice and some don't (or at least didn't).

Assuming that there are still umbrella companies around that don't charge a fee for salary sacrifice then OP presumably has the option to seek another 'employer'.

[eek]

You are confused - it is the money of the umbrella firm.

now the umbrella firm is honest and only deducting a small fee to their work but it would be perfectly legal for them to pay you minimum wage and pocket the rest.

as for the fee, technically any fee that is for an optional service (and salary sacrifice is an optional service that has an admin overhead that has a cost) has to be treated as a post tax deduction - it can’t be an employer cost.

the only way around that would be to have different fees but that creates a different set of issues so umbrellas do this in the way they prefer / HMRC have requested over the years

[Mikexx]

Because it’s your choice. If you chose not to use salary sacrifice, then you wouldn’t pay the £8 monthly fee (or whatever the exact amount is). It is not the umbrella company that is forcing you to use salary sacrifice whatever way you have it set up, it is your personal choice.
Or, if you are able to look at it objectively, why should your personal decision be taken out of their income?

Are you saying is there is no legal basis for doing this and it is their choice? Seems crazy to me and the best way to upset their clients.


You seem to be confusing whose income this is.

It is not "their income" and not sure why you should think it is?

The total umbrella income is my pay for work done that is sent to the umbrella company. Out of that I pay their fixed fee and my salary sacrifice.

Out of that I pay employers NI and Aprenticeship Levy

The net amount is tehn my Gross pay. Out that I pay Employees NI and Income tax and PayStream hand this money to HMRC on my behalf.

Then they take their admin charge.

So it was never their money, nor the salary sacrifice, nor the admin fee if it was taken out total umbrella income. It is all my money bar salary sacrifice, fees, NI and Income tax.

[WTFH]

I'm looking for an explanation why the "admin charge" can't be taken out of the total umbrella income. If the salary sacrifice can be take out of the total umbrella income then why not the "admin charge".

Because it’s your choice. If you chose not to use salary sacrifice, then you wouldn’t pay the £8 monthly fee (or whatever the exact amount is). It is not the umbrella company that is forcing you to use salary sacrifice whatever way you have it set up, it is your personal choice.
Or, if you are able to look at it objectively, why should your personal decision be taken out of their income?