Reply to: Payeworx

[sreed]

I'm sure I posted a while back about some firms offering a 70-75% return because it caught / tricked a different type of contractor - one who knew that 90% was impossible but something closer to 50-60% you get via PAYE seemed plausible.

Madness isn’t it. If they taken “only” a 5-10% margin, they’d struggle to sell the proposition, but soon as they bump it up to 20%+, it’s all good! Compared to the average brolly provider, the money they’d have minted through this fudge is mind-boggling.

Out of interest, I sent them an enquiry form for this scheme through their website yesterday, and as per the response that I got today - they’re still offering it! God only knows if the grunts at Payeworx even know about the HMRC list.

[eek]

I'm sure I posted a while back about some firms offering a 70-75% return because it caught / tricked a different type of contractor - one who knew that 90% was impossible but something closer to 50-60% you get via PAYE seemed plausible.

[lucyclarityumbrella]

CBP deduct around 2% from the larger payment as a fee, and a further 19% which they claim is Corporation Tax (CT). However, the rate of CT in the IOM is 0%. The scheme users are expected to distribute the alleged dividend amount as they see fit.” That’s some margin! Now that they’ve made a HMRC’s list, they’ll no doubt go into administration shortly, leaving their clients over the last many years holding the bag.

[sreed]

“

The scheme user enters into an employment contract with Payeworx (PWL), and the scheme user’s Personal Service Company (PSC) is issued a share in Contractor Buddy PCC Limited (CBP), a connected protected cell company based in the Isle of Man (IOM). PWL pay the scheme user a salary that is around the minimum amount required by the National Minimum Wage Act 1998. CBP make a separate larger payment without deducting Income Tax and National Insurance Contributions to the scheme user’s PSC, supposedly for a dividend. CBP deduct around 2% from the larger payment as a fee, and a further 19% which they claim is Corporation Tax (CT). However, the rate of CT in the IOM is 0%. The scheme users are expected to distribute the alleged dividend amount as they see fit.” That’s some margin! Now that they’ve made a HMRC’s list, they’ll no doubt go into administration shortly, leaving their clients over the last many years holding the bag.

[lucyclarityumbrella]

Not the only one it seems!

"The most recent update was on 24 August 2023 with the addition of Payeworx Ltd and SmartPay Limited."

[cojak]

And today Payework finally made HMRC's list of dodgy schemes see https://www.gov.uk/government/public...s#payeworx-ltd

Finally!

[eek]

And today Payework finally made HMRC's list of dodgy schemes see https://www.gov.uk/government/public...s#payeworx-ltd

[cojak]

Ha-ha-ha-ha-ha...

https://i.ibb.co/cTCj9S0/Capture.png

PS: why can't I post pictures any more?

Oh, clever. They've dropped the outlandish >80% lark to a more 'believable' 77%.

(And it's better that you don't post a picture in this instance, trust me...)

[wattaj]

Not too sure what I'll find...

Ha-ha-ha-ha-ha...

https://i.ibb.co/cTCj9S0/Capture.png

PS: why can't I post pictures any more?

[wattaj]

I see that PAYEworx have popped up again on LinkedIn. I've asked them to better explain their "IR35 Protected Limited Company", but I'm not holding my breath for a clear and unambiguous answer in public... I might request one of their "information packs".

Not too sure what I'll find...

[lucyclarityumbrella]

I bet they are QC approved too

Undoubtedly! Probably HMRC approved too

(and in case HMRC are watching that was a joke, we all know you don't approve anyone or anything, although maybe you should when it comes to umbrella's! hint hint)

[Drei]

And you've just invented the MSC again by another name and they are completed banned.

Makes sense, this means they would have to work out shares in real time according to contracts and profit. The only way I can see this, is at the end of every financial year, so you would have to make do with your £18k a year, then at the end the XX Company will pack up go and whilst enjoying all them "dividends" from all the contractors probably in a bank in Panama or one of the other islands in the Caribbean.

In regards to the NHS contractors, not sure what to say. They seem to be pretty happy doing it still. I know for a fact one of them is doing this to avoid paying higher child support, which is damn low.

[SimonMac]

Ask if they have a DOTAS number

I bet they are QC approved too

[eek]

I guess it all depends on how Payworx pays your LtdCo, it can't be a "normal" shareholding as YourCo payment of dividends has to be at the same level as everyone else's. Then you are looking at alphabet shares which although not illegal it need to be handled very carefully

Alphabet shares: Get the details right | AccountingWEB

And you've just invented the MSC again by another name and they are completed banned.

[SimonMac]

Hold on, so if you work for a consultancy firm and your salary is £30k a year, but the firm charges £800 per day for your services, how would that be illegal?

Every service provider does that, Microsoft Consultant is charged at £750 a day but the consultant receives a salary of £45k a year. Now your LTD company has a share in the Consulting Firm, in this case the Umbrella, therefore your salary is £18k and the LTD company receives £50k in dividends. Your LTD does whatever it wants with that money. You can then get as dividend payout or they could invest in something else. Either way, you still pay your tax on the dividends received, or not get any money, therefore not avoiding tax.


The only issue I can see is you trusting them to pay your LTD the dividend. If they do it monthly then great.

I guess it all depends on how Payworx pays your LtdCo, it can't be a "normal" shareholding as YourCo payment of dividends has to be at the same level as everyone else's. Then you are looking at alphabet shares which although not illegal it need to be handled very carefully

Alphabet shares: Get the details right | AccountingWEB