PayAngels.co.uk safe?

lukewd

Hi there, I just wanted to reach out and find out if anyone out there has used PayAngels.co.uk before? Are they a safe alternative to setting up your own limited company via your accountant if you are freelancing or consulting?

It seems an accountant will charge about ±£2000 to manage the whole thing, whereas PayAngels seem to be able to save you up to 90% of your income.

Is it all legit?

Stevie_Palimo

There is a saying :- If it seems to good to be true it more than likely is.


Personally I'd not wish to use a Company that claim to save me 90% on my taxes and have found from my research and using of accountants that cheap is not always best, I now go with a accountant that is middle of the road but does what I need him to do.

Pennywise

You'll get a decent, qualified accountant for half that. Usually the umbrella/agency fees are very close to an accountant's charges.

Anyone offering 90% returns on above-average incomes isn't legit. They'll be using some kind of offshore or loan scheme, or some kind of scheme where they substitute expenses for wages. Or including your genuine travel claims as part of income as a smoke and mirror trick. (How can it be income if you spend it?).

The only purpose of such schemes is tax avoidance. HMRC regularly attack these kinds of artificial avoidance schemes, often leaving people with bills of such a magnitude they have to sell their homes (if they've been using a scheme for several years). Ask the people who've recently received huge bills who used a well known Isle of Man scheme!

TheCyclingProgrammer

Any "contractor service" that claims you can take home 90% of your earnings is undoubtedly a scam or based on dodgy tax avoidance schemes that will cost you a lot of money when you get caught.

Realistic take-home for a Ltd company contractor, IMO, is anywhere from 65-75%, depending on your level of expenses and turnover (the former I find to be pretty consistent at around £14-16k including salary and occasional equipment purchase, turnover obviously being quite variable). It also depends how much you pay in dividends as you may choose to leave profits in the company which may in the future be extracted at lower tax rates on liquidation (if the government hasn't got rid of ER by then for small businesses by then!).

As a rough example, from a turnover of £100k, assuming you pay yourself a salary up to the personal tax threshold and you're the only director/employee, say around £15k expenses including the salary (this might be a lot more if you have a lot of travelling), taxable profit of £85k, £17k Corporation Tax leaving you with £68k. If you took the whole lot as dividends, you'd be looking at roughly £31k without any additional income tax and the remaining £37k taxed at an effective rate of 25% on the net dividend leaving you with just short of £59k, plus you original salary of £11k, giving you £70k take-home (70%, of course).

Registering on the flat rate VAT scheme could give you an extra couple of grand profit (assuming the input VAT on your expenses is low).

lukewd

Thanks all. I'll take that advice and steer clear!

Futuristic

https://beta.companieshouse.gov.uk/company/07135919

http://fansonline.net/middlesbrough/mb/view.php?id=4147023

Pennywise

The only contact details on the pay angels website is an 0844 phone number. So they're even breaking the law as regards the legal requirement to put an address and their limited company details on it. Don't touch with a bargepole.