Ipo

oregonuk1

IPOs just out of interest what do they start from is it if you have a surplus of £99.00 they can take 50% of that?. some one put a table up but did not look it it.

fermi

oregonuk1 wrote: »

IPOs just out of interest what do they start from is it if you have a surplus of £99.00 they can take 50% of that?. some one put a table up but did not look it it.

No. They start at £100 surplus.

The starting band is 50%, so the minimum viable IPA/O that can be set up is 50% of that £100. So £50 per month.

dojoman

Hi Fermi, thanks for the table for IPA, what confuses me is this. If you have £99 or less you keep all of that, but if you have £100 do you only keep £50 out of that or am I reading it wrongly. Or is an IPA only on the amount above the £99 figure?

skylight

Nope. You are reading it right!!

If you have £99 you get it all, but if you have £100 then you have to pay £50 to the OR and keep £50. Its not necessarily right, but I guess that the rules have to start and finish somewhere.

fermi

dojoman wrote: »

Hi Fermi, thanks for the table for IPA, what confuses me is this. If you have £99 or less you keep all of that, but if you have £100 do you only keep £50 out of that or am I reading it wrongly.

Nope. You have it right. :cool:

I know it does seem very daft, but there is a (sort of) reason.

Obviously it costs the OR (via MB) to collect and do the admin on an IPA. Therefore, there is a minimum amount per month below which it would simply not be economical for the OR to collect an IPA. It would cost them more to do it than they get out of it in the end.

That "minimum" amount has been set (somewhat arbitrarily) at an IPA of £50 per month.

Because an IPA only takes a percentage of surplus income and the lowest band is 50%, that means that the OR has decided it is not economical to set up an IPA where it would be less than £50 per month based on a £100 surplus.

If you have less than £100 surplus then (in theory) it is not worth them collecting.

So it sort of makes sense, it a very strange and twisted way.