Dividends

[agalfie]

Im new to this. Im looking into umbrella companies. A company called pay lift contacted me & said I have the option to be paid dividends to increase my net pay. He said it was legal … im thinking not. Am I right?

[hobnob]

Hi, and welcome to the forum.

The short answer is that yes, this is dodgy, so avoid them.

Basically, if your contract is inside IR35 then you have to use an umbrella company, and therefore you have to be take the money via salary (PAYE), not dividends. If your contract is outside IR35 then you can use your own limited company and split the money between salary and dividends.

Looking at Paylift's website, they claim to be a comparison site, i.e. you'll stick in your details and they'll tell you which umbrella is best. However, in practical terms there won't be much difference between legitimate umbrellas; their fee will vary slightly (typically £15-20/week), but that will be negligible compared to your overall take-home pay. There are other reasons to choose a specific umbrella (e.g. which pension schemes they support), but you wouldn't choose one based on price. That means that there's no need for Paylift's service. So, it seems more likely that they're acting as a front-end for a dodgy scheme in the background, i.e. they'll recommend their own company.

If you haven't already done so, I recommend reading through the sticky posts in this forum for more information about the pitfalls to avoid.

[northernladuk]

If they aren't taxing you to the hilt then it's not legit. Period. There is no way to avoid it. Anyone that does is running a scheme and you want to run.

If you go to various umbrellas and run the same numbers through their calculators they should all come out roughly the same. If any one is significantly higher then don't bother with them. That said the dodgy ones don't offer calculators so that's not a bad start when looking who to avoid.

If you've a choice of umbrella then the defacto recommendation on here is Clarity. Lucy runs the show and she's been posting on here for years. Won and award for being best Umbrella under 500 people and they've got an office doggie that actually sleeps less than the staff do.

Give Lucy a call. She'll see you right.

[eek]

Im new to this. Im looking into umbrella companies. A company called pay lift contacted me & said I have the option to be paid dividends to increase my net pay. He said it was legal … im thinking not. Am I right?

In the short term it’s legal, but that would definitely fall under the MSC legislation so HMRC will regard it as income and insist that the appropriate PAYE tax was paid (and May not refund you the tax you had already paid)..

so I wouldn’t go for it personally.

[WTFH]

Im new to this. Im looking into umbrella companies. A company called pay lift contacted me & said I have the option to be paid dividends to increase my net pay. He said it was legal … im thinking not. Am I right?

I've tried to do some research on "Pay Lift" and...
1. They aren't a company, just a web page. (Nothing on CoHo for them)
2. The web page is not registered correctly to any owner. (Nominet unable to verify the owner)
3. They do not have a physical address.
4. They have a non-geographic phone number.

If those 4 are not enough to make you run, the fact that the sales pitch includes "it's legal" means that they know it's dodgy and probably employ more lawyers than accountants.

[Guy Incognito]

Biggest red flag out there is a statement that something is legal.

[eek]

I've tried to do some research on "Pay Lift" and...
1. They aren't a company, just a web page. (Nothing on CoHo for them)
2. The web page is not registered correctly to any owner. (Nominet unable to verify the owner)
3. They do not have a physical address.
4. They have a non-geographic phone number.

If those 4 are not enough to make you run, the fact that the sales pitch includes "it's legal" means that they know it's dodgy and probably employ more lawyers than accountants.

Ignore that - look at the business model

Paylift is an "Umbrella Comparison" site designed to bring people into a sales pitch - so we won't know any of the details beyond that because they are hidden from view.