Payment Companies

[Alex2012]

Used Fairgate payment company 6 weeks ago never a problem, started different job, got my text saying i was going to get paid Thursday, checked bank account that evening I had not been paid. Has anyone else had this problem.

Thanks Alex2012

 

[Andy 7671]

Only with Connor Williams 5 or 6 years ago. Most are pretty good.

I detest paying over a grand a year to get paid, and Im sitting here now doing my own accounts.

 

[flyingsausage]

I have had the same problem in getting a text only for nothing to be in the bank.
Fairgate is one of the better ones.

If you are not CIS some of them want to take holiday pay off you.As well as VAT recepts for petrol etc - they then claim the VAT back for themselves.

I was offered an agency job last year ang you had to use a certain payroll company,they worked it out for me that by the time they took their fee and holiday pay from my wages and all reciepts had to be VAT ones it was not worth taking the job and signing off the dole.

 

[Marvo]

I'm not sure exactly what they do but why would you use a payment company instead of getting paid directly?

 

[RISElectrical]

For long contracts when sub contracting you shouldn't be working for the same company on a full time basis, more than 3 months (last time I checked) therefore payment companies basically act as an agency/middle man so that the employer doesn't have to take you on cards in. Or at least that's my understanding of it in its simplest form.

 

[flyingsausage]

The agencies offer you no choice but to go through a payment company so you are not on their books.
You are working for them through a third party and are classed as self employed.This is what is reffered to as 'bogus self employment'.
Most agencies have an agreement with a payment company where they get a kick back from the payroll company for every spark they force to use them.
You then have to pay for the service of the payroll company with a fee taken out off your wages.

My post above where I was saying it was not worth me working was for a two week job I was offered last year.
The rate was £12 an hour and you had to pay a payroll company £30 to process your wages,they also took holiday pay from your wages as well at the rate of three and a half hours a week.
For claiming for petrol they were wanting a petrol VAT reciept and not every garage gives you them.
On the payroll companies form you could clearly see that they claimed all the VAT back on petrol/tools etc and kept this money to for themselves.
I was unemployed at the time and needed money into the bank quickly but when I added up my fee and taking holiday pay from me then the cost of petrol at £15 a day and the dole money I would lose ot was not worth taking.
You have to take into account the firt three days of dole money you lose when you are making a new claim.

I did offer to the agency to work for them direct through PAYE but they were not interested.
This is what we are fighting to end - we want rid of the agencies from our trade.
If you are a CIS spark I can see the attraction of agency work and paying less tax and getting a tax rebate every year.
But I do not see why I should have to be forced to work as self employed.
It would be different if you were paid the extra on the rate that you should get get if you are agency but now they seem to like paying way under the rate.

 

[Andy 7671]

£3o!!!!! to calculate 20%, a sum most people could do on their heads. Parasites. No certified accounts, different agencies force you to use different companies.

 

[UNG]

For claiming for petrol they were wanting a petrol VAT reciept and not every garage gives you them.

If you are charged VAT then they must by law issue a VAT invoice / receipt if or when requested

Had this problem with a very large company who would not issue a VAT invoice for goods I had purchased having contacted the VAT office the threat of a full and very detailed VAT inspection soon resolved the problem after I quoted the sections, sub sections and paragraphs of the VAT documents and mentioned that the VAT office had given me the information and would investigate if the invoice was not forthcoming

 

[Marvo]

The agencies offer you no choice but to go through a payment company so you are not on their books.
You are working for them through a third party and are classed as self employed.This is what is reffered to as 'bogus self employment'.
Most agencies have an agreement with a payment company where they get a kick back from the payroll company for every spark they force to use them.
You then have to pay for the service of the payroll company with a fee taken out off your wages......

Thanks for the explanation but I'm still a little confused.

Surely the scenario you describe would mean you're actually employed by the payment company?? What's the difference between the payment company and a labour broker or agency....apart from obviously the name??

 

[GLENNSPARK]

so you are forced into going through a payroll company....that then kicks back some of the money they stole....yes thats stole from you.....i`d tell it to get ****ed...

 

[VoltzElectrical]

Thanks for the explanation but I'm still a little confused.

Surely the scenario you describe would mean you're actually employed by the payment company?? What's the difference between the payment company and a labour broker or agency....apart from obviously the name??

they ask you some questions that your answers essentially mean that you are self employed under the IR 35 regulations.

I would love to see this shady practise stop. But how to do it? When you look at how the whole scenario regarding de-skilling of the trade etc.. is going, it doesn't bode well for the outcome of trying to get this stopped.

It's all very well to say 'oh well I don't want the job then', but when you are faced with the prospect of either sitting at home earning nothing, or taking a job through an agency operating this scheme, then you take the job, then bend over and take one from 'The Man'.

Really, the only hope we have is for this battle to be taken up by HMRC in the name of tax avoidance, or more specifically, NI avoidance, as those are the contributions being avoided by the agencies using this scheme.

 

[flyingsausage]

so you are forced into going through a payroll company....that then kicks back some of the money they stole....yes thats stole from you.....i`d tell it to get ****ed...

You are quite right in what you are saying - I think the use of these payment companies is legal fraud.
In this forum I have read about sparks who have highlighted this problem to Union Reps and MP's but it all seems to fall on death ears.

What has happened in many cases is that whoever owns the agency also owns the payroll company - I am sure you can smell the corruption.
Most agencies now insist on this - no payroll company no job.
I worked for Search a few years ago and it was a case of use payroll company or not work.
Another agency I worked with a while ago - Randstad forced me to go through one as well.If I wanted to work PAYE they would take £2 an hour of my rate under the guise that they had to pay me holiday pay(lies).

I have suffered when they have mucked up my wages and charged me twice the next week,once for the current weeks wages and once for the wages I was short the week before.(£50 of a very poor wage in the first place)

Even if you are a CIS spark you still have to use one of these payroll companies to get paid.

 

[flyingsausage]

I'm not sure exactly what they do but why would you use a payment company instead of getting paid directly?

For most agencies it is either work through a payment company or you don't work for them at all.

 

[flyingsausage]

Thanks for the explanation but I'm still a little confused.

Surely the scenario you describe would mean you're actually employed by the payment company?? What's the difference between the payment company and a labour broker or agency....apart from obviously the name??

This is all set up so that you are not actually working for the agency, you are working for the agency through a payment company(umbrella company).
Each payment company will send you out a contract and if you read it you will see that you are classed as selfemployed and have no employment rights because of this.This is how the client or agency can pump you at a moments notice with no right of a come back from you.

If you work for agencies all year you could end up using seven or eight different payment companies.

 

[flyingsausage]

they ask you some questions that your answers essentially mean that you are self employed under the IR 35 regulations.

I would love to see this shady practise stop. But how to do it? When you look at how the whole scenario regarding de-skilling of the trade etc.. is going, it doesn't bode well for the outcome of trying to get this stopped.

It's all very well to say 'oh well I don't want the job then', but when you are faced with the prospect of either sitting at home earning nothing, or taking a job through an agency operating this scheme, then you take the job, then bend over and take one from 'The Man'.

Really, the only hope we have is for this battle to be taken up by HMRC in the name of tax avoidance, or more specifically, NI avoidance, as those are the contributions being avoided by the agencies using this scheme.

There must be tens of billions of pounds lost in tax every year because of this National Insurance advoidance.

 

[flyingsausage]

My main problem with agencies is you are not paid anything extra for the employers NI or the holiday pay that they ant their clients are saving.
You are also mostly paid under the rate these days with no extra for overtime.

I was offered a job last year where the agency was paying £13 an hour for all hours Monday to Friday(12 hour shifts) and then the agency was also paying £17 an hour all hours at the weekend (10 hour shifts).
The payment company you had to go through set a percentage of your wage to the side every week for holiday pay,and also charged £30 a week.
No expenses or traveling time was paid to agency sparks - the books in sparks got all they were due in overtime rates(time and a half and double time)and also had their SJIB holiday stamp paid every week.
A few agency sparks did all the hours and were coming out with £300 or more less than the books in sparks as if they did alot of hours they were also hit by employers NI coming off their already poor wages- this is not very fair.
And at the end of the job the agency sparks got their holiday pay minus the £30 fee and a big dose of tax.

My point is if the company can pay the books in guys the proper rates they can pay the agency guys the proper rates as well.This was a six month long job so any agency spark there for the duration was ripped of for thousands.

 

[flyingsausage]

I am only telling some of the stories that have happened to me recently by agencies.

I, like many other sparks simply do not have a choice but to work for them from time to time.
But I do know sparks that have not been able to get any books in work for years and had had no choice but to wrk for them in all that time.It has also forced to good sparks I know to leave the trade for poorer paid work just for the chance to have a regular job.

 

[GLENNSPARK]

thing is though....they say theres an oversaturation of the market at the mo in the electrical trade....but out of all those how many are actually qualified, competent electricians.....and how many are just cable pullers and 5 week wonders....

 

[VoltzElectrical]

thing is though....they say theres an oversaturation of the market at the mo in the electrical trade....but out of all those how many are actually qualified, competent electricians.....and how many are just cable pullers and 5 week wonders....

There are a lot of competent qualified sparks in this situation for your information. The problem here is a massive tax avoidance loophole being exploited by the agencies at the great expense of quality and desperate labour.

The sooner the HMRC closes this loophole, the better. Forget the de-skilling of labour, this is a far more pressing concern affecting many more people than the aforementioned issue.

You've got a lot of opinions Glennspark, many of which are valid. I hope that you are never in this situation at the end of your apprenticeship as I anticipate that this forum will be aflame with your embittered views.

This is a cancerous employment tactic that needs to be put to bed, but how to do it is something I don't readily have the answer to, although I will readily sign up to anything anyone has to suggest.

Perhaps it's up to me to suggest something? I will give it some thought. Maybe I will start a thread to gauge some opinion and possible ways forward.

Watch this space comrades,

 

[GLENNSPARK]

well i know i can be opinionated voltz......but i can cope with critisism n all....i wasn`t getting at anyone..my views arn`t aimed at anyone in particular....and i agree that its something that needs sortin.....i dont like the idea that folk are getting scammed...apparently legally....needs to go does that.....

 

[flyingsausage]

thing is though....they say theres an oversaturation of the market at the mo in the electrical trade....but out of all those how many are actually qualified, competent electricians.....and how many are just cable pullers and 5 week wonders....

I do not think anyone can have a correct answer for that but I can give my opinion - before the start of the downturn(which was four years ago in my book)there was aclaimed shortage of sparks.
The industry along with the Government of the time though of ways to deal with this instead of putting wages up to attract more apprentices into the trade.
They though up the domestic installer who does a five week wonder course and goes about telling all in sundry he is a spark.
They also thought that they would use these fact track courses to flood the trade with all these 'new sparks' to sort out the shortage problem.
And just when these five week wonders were comming out of their courses by the thousand the downturn happened and many electricial companies were thinking of ways to save money.

The main thing they did was to pump most of their sparks and use agency sparks getting paid less than the rate as their default manning of jobs.
The companies then said how can we save even more money and thought 'lets just use sparks mates and the improvers,who needs sparks anyway'and these guys will be cheaper to employ than sparks - and also lets just use an agency to get the rates down as low as possible.

This is in my book how there is now too many sparks in the country at this moment in time.
With many companies only using agency sparks now that is forcing rates down.
There are far too many agencies out there but the companies are the ones with all the power as a company can just keep phoning up companies till one will say 'yes we can get you approved 2391 sparks for £10 an hour'.
The companies like that fact and use it to their advantage to drive rates down,as they know there will always be sparks out there looking for work,or plenty of sparks mates willing to do the job for £7.50 an hour.

 

[flyingsausage]

well i know i can be opinionated voltz......but i can cope with critisism n all....i wasn`t getting at anyone..my views arn`t aimed at anyone in particular....and i agree that its something that needs sortin.....i dont like the idea that folk are getting scammed...apparently legally....needs to go does that.....

Well said - we are getting scamed by these scum agencies and scum employers that use them.

 

[GLENNSPARK]

2391 sparks for £10 per hour......well at one point i think it was £8 per hour....thing is though.....if all you are doing is going round replacing lamps...or something like that...you dont need to be 2391....but some of these agencys are still insisting on it....so thats a way of getting a 2391 sparks on the books for the kind of rate they want to pay for lamping up....or something like that....

 

[VoltzElectrical]

2391 sparks for £10 per hour......well at one point i think it was £8 per hour....thing is though.....if all you are doing is going round replacing lamps...or something like that...you dont need to be 2391....but some of these agencys are still insisting on it....so thats a way of getting a 2391 sparks on the books for the kind of rate they want to pay for lamping up....or something like that....

This is obfuscating the issue.

I you want lamps replacing, employ a mate.

If you want conduit installed, employ an improver.

If you want circuits wired, employ a spark.

If you want things tested, employ an approved spark.

BUT, and here is the CRUX of the issue...

Pay the appropriate rate. And pay it to the bloke through the appropriate channel. DON'T try to duck your obligations of NI contributions, when the guy is working for you for 6 months on daywork and try to claim he is self-employed then let him take it on the chin to the tune of nearly £30 a week off his wages for the privilege of getting paid.

This is the real issue here guys, the loopholes that are being exploited at the expense of the man at the coalface.

 

[Marvo]

How long has the payment company 'loophole' been exploited and why doesn't it sound like there's any legislation in the pipeline to close it?

 

[GLENNSPARK]

This is obfuscating the issue.

I you want lamps replacing, employ a mate.

If you want conduit installed, employ an improver.

If you want circuits wired, employ a spark.

If you want things tested, employ an approved spark.

BUT, and here is the CRUX of the issue...

Pay the appropriate rate. And pay it to the bloke through the appropriate channel. DON'T try to duck your obligations of NI contributions, when the guy is working for you for 6 months on daywork and try to claim he is self-employed then let him take it on the chin to the tune of nearly £30 a week off his wages for the privilege of getting paid.

This is the real issue here guys, the loopholes that are being exploited at the expense of the man at the coalface.

but the present status quo dictates otherwise....as you say here..it aint on....i actually sympathise with people forced into this position..i really do....

 

[GLENNSPARK]

How long has the payment company 'loophole' been exploited and why doesn't it sound like there's any legislation in the pipeline to close it?

well there wont be any legislation to close it will there....as the government can claim to be `creating employment opportunities`....and somebody someware...no doubt with influence over policy...will be making cash out of this racket.......

 

[Marvo]

So the UK government is happy with the status quo even though it's being used as a mechanism to avoid national insurance?

 

[VoltzElectrical]

How long has the payment company 'loophole' been exploited and why doesn't it sound like there's any legislation in the pipeline to close it?

I don't know Marvo, but it's catching on with a lot of agencies. As i have previously stated, I don't know the best way to address this phenomenon, maybe approach my local MP? i worked for an agency for 6 months last year, paying £18 a week to get paid by the umbrella company, so believe me, I know what it's all about.

Will the authorities listen? I doubt it.

This is only one of a few issues that need sorting out within the industry. The other main one is the need for electricians to have a 'license to practice' like they do in America, Australia, NZ to name a few. None of this competent person scheme rubbish that you pay annually for.

We need to stand up for our industry soon, but I fear we will not and that will be that.

any suggestions welcomed.

 

[GLENNSPARK]

So the UK government is happy with the status quo even though it's being used as a mechanism to avoid national insurance?

but if trying to appeal to a mass audience...such as an electorate....what grabs the headlines more?....a bit of NI the government missed out on....or falling unemployment figures?...

 

[VoltzElectrical]

but if trying to appeal to a mass audience...such as an electorate....what grabs the headlines more?....a bit of NI the government missed out on....or falling unemployment figures?...

But the work is still there to be done. it's just a question of HOW it's payed for. The companies profiting from this loophole should not be doing so at the expense of the guy doing the work.

Let's keep the focus on the real issue here.

The work needs to be done, let's stop greedy middle men from dodging their responsibilities.

 

[Marvo]

This is only one of a few issues that need sorting out within the industry. The other main one is the need for electricians to have a 'license to practice' like they do in America, Australia, NZ to name a few

These sound like completely separate and unconnected issues. The 'license to practice'would be an industry internal issue not a national government one surely...

Surely the JIB grading is as good as a 'license to practice' isn't it?

Sorry if these are stupid questions but I have zero knowledge of the UK electrical industry. I'm learning fairly quickly though

 

[VoltzElectrical]

These sound like completely separate and unconnected issues. The 'license to practice'would be an industry internal issue not a national government one surely...

Surely the JIB grading is as good as a 'license to practice' isn't it?

Sorry if these are stupid questions but I have zero knowledge of the UK electrical industry. I'm learning fairly quickly though

Yes they are separate, but not unconnected issues. The current government requires certain electrical work to be 'notified' to the local authority. To do this, you can either pay them to come out and inspect the work (very expensive) or notify under a 'scheme'. The madness is though, that to be a member of a 'scheme' you don't have to be a qualified electrician. You only have to be deemed 'competent' which largely involves paying the membership fees.

So although they seem unconnected, they are connected as the whole thing falls under the 'government' and the way the industry is regulated.

 

[flyingsausage]

One spark approached his Labour MP in Glasgow about this two years ago when they were still in power,he pointed out serveral Government funded jobs that this was happening on(a prison,serveral hosiptal jobs etc).

The response was 'any employment is good employment' to say he was angry was a an understatement.

 

[VoltzElectrical]

Whereas in the aforementioned countries, you have to take the underpinning knowledge exams, and a trade competency exam, before getting a licence to practice. There is no way you can just apply to a scheme to come out, check a socket installation, see your copy of the regs and cheap as chips PL insurance, take £500 then off you go.

 

[VoltzElectrical]

While time served, excellent sparks, are not allowed to do domestic notifiable works unless they pay their dues to a 'scheme'. No wonder they are called scams.

 

[flyingsausage]

Yes they are separate, but not unconnected issues. The current government requires certain electrical work to be 'notified' to the local authority. To do this, you can either pay them to come out and inspect the work (very expensive) or notify under a 'scheme'. The madness is though, that to be a member of a 'scheme' you don't have to be a qualified electrician. You only have to be deemed 'competent' which largely involves paying the membership fees.

So although they seem unconnected, they are connected as the whole thing falls under the 'governmet' and the way the industry is regulated.

The only time there is any sort of regulation in this industry is when someone gets hurt or dies.

We also need some clarification on the term 'competent person' which is a very loose term at the best.
How can a five week wonder who has bliffed his way through the 2391 be classed as 'competent' against a spark who has been in the trade 20 years but does not have the 2391 ?

 

[flyingsausage]

So the UK government is happy with the status quo even though it's being used as a mechanism to avoid national insurance?

The last Labour lot brushed this under the carpet many times as they were chasing big companies for some donation money.
This government will be no different

 

[flyingsausage]

While time served, excellent sparks, are not allowed to do domestic notifiable works unless they pay their dues to a 'scheme'. No wonder they are called scams.

I do not do domestic work myself but I do agree with you.
This forces most domestic work to be dome on the side or cash in hand.
On every job I go onto nom there is alway some spark with a rewire or a garage to wire or put up some new lights - will any of this work ever get checked no chance.
I do notice that the odd sparks that I do not rate work wise and would not let wire a plug in my house always seem to have plenty off work on the side.

 

[flyingsausage]

These sound like completely separate and unconnected issues. The 'license to practice'would be an industry internal issue not a national government one surely...

Surely the JIB grading is as good as a 'license to practice' isn't it?

Sorry if these are stupid questions but I have zero knowledge of the UK electrical industry. I'm learning fairly quickly though

The full UK electrical industry needs looked into from top to bottom and all the non qualified and cowboys need kicked out of the trade - but it will never happen as money will always win