Hi all,I’m really considering going LTD as my mate has told me how good it is earning wise. I’m from the Birmingham area so there’s plenty of work. Is it as good as it sounds as I would be leaving a company to do it.
Unless your thinking of buying a lorry id settle for self employment instead .
If you want to run the risk of a hefty NI/Tax bill years down the line then go for it. HMRC are rolling out IR35 compliancy and will take years to inform the Driver of their potential breaches of it, this allows large amounts of revenues to build up only to be handed over to the treasury. Great isn’t it when the tax man has numerous legislations at their disposal but only enforce them on the Driver when it makes it worth their while and turn a blind eye to the agencies for facilitating potential non compliance by the Driver.
robbo99:
If you want to run the risk of a hefty NI/Tax bill years down the line then go for it. HMRC are rolling out IR35 compliancy and will take years to inform the Driver of their potential breaches of it, this allows large amounts of revenues to build up only to be handed over to the treasury. Great isn’t it when the tax man has numerous legislations at their disposal but only enforce them on the Driver when it makes it worth their while and turn a blind eye to the agencies for facilitating potential non compliance by the Driver.
This ^.
HMRC down the line won’t have any interest in your story. You will get a large tax bill and if you don’t pay it, large men with crap tattoo’s will help you 
(And then charge you extra for the ’ privilege ') 
Is your mate wearing oversized shoes, grease paint, a red nose and works in a circus ?
I am paye for the reasons above so not affected but did wonder something if anyone has any thoughts.
If in 5 years time for example the tax man decides that ltd driver was employed and owes x amount in back tax will ltd driver have a claim against the various companies they have worked for for unpaid holiday, pension, ssp etc?
Obviously depending on the company still trading but surely if its the ruled that the driver was employed for tax reasons then surely they get the associated benefits?
kcrussell25:
I am paye for the reasons above so not affected but did wonder something if anyone has any thoughts.If in 5 years time for example the tax man decides that ltd driver was employed and owes x amount in back tax will ltd driver have a claim against the various companies they have worked for for unpaid holiday, pension, ssp etc?
Obviously depending on the company still trading but surely if its the ruled that the driver was employed for tax reasons then surely they get the associated benefits?
That’s why it’s always LTD. In theory you could work as a sole trader and raise invoices etc, and afaik then liability for ir35 etc rest with the firm’s you work for, but in limited co model it rests with the Ltd.
kcrussell25:
I am paye for the reasons above so not affected but did wonder something if anyone has any thoughts.If in 5 years time for example the tax man decides that ltd driver was employed and owes x amount in back tax will ltd driver have a claim against the various companies they have worked for for unpaid holiday, pension, ssp etc?
Obviously depending on the company still trading but surely if its the ruled that the driver was employed for tax reasons then surely they get the associated benefits?
In an ideal world I would say that the worker should be entitled to benefits you mention if it was found that the worker was deemed to be an employee and not a legitimate Ltd Co for the work he carried out.
In the real world, I wonder how much time and money it would cost to recover benefits especially if the worker had worked for many agencies over the 5 year period, especially for odd days / odd weeks work carried out. It would probably take a worker to go through the courts as a test case to get a ruling.
The Pimlico Plumbers ruling is being appealed through the courts and will probably take years to settle.
robbo99:
kcrussell25:
I am paye for the reasons above so not affected but did wonder something if anyone has any thoughts.If in 5 years time for example the tax man decides that ltd driver was employed and owes x amount in back tax will ltd driver have a claim against the various companies they have worked for for unpaid holiday, pension, ssp etc?
Obviously depending on the company still trading but surely if its the ruled that the driver was employed for tax reasons then surely they get the associated benefits?
In an ideal world I would say that the worker should be entitled to benefits you mention if it was found that the worker was deemed to be an employee and not a legitimate Ltd Co for the work he carried out.
In the real world, I wonder how much time and money it would cost to recover benefits especially if the worker had worked for many agencies over the 5 year period, especially for odd days / odd weeks work carried out. It would probably take a worker to go through the courts as a test case to get a ruling.
The Pimlico Plumbers ruling is being appealed through the courts and will probably take years to settle.
Just to clarify, my drivers are PAYE and I have no-one, nor would I, who is self-employed work for me.
However, if I was Charlie from Pimlico, I’d be getting my highly paid accountant to shovel as much as poss into pensions, wifes pension, Cayman Islands, latest tax wheeze, pay myself dividends of a few zillion and then say there you go, I’m finishing my company and there’s £3.50 left after paying suppliers, pay any outstanding holiday/SSP/pension out of that and laugh all the way to my mansion in the Bahamas. He doesn’t need to work, he could finish if he wanted to.
Yeah it works great earnings wise until you get a bill through the door for what the tax man decides you owe them because you didn’t qualify as being in self employment. In my mate’s case it was over £3k and that was just for one year he did it and he was nowhere near as severe as some are at trying to make as little profit on paper as possible.
Also the downside your mate probably didn’t mention like trying to get a mortgage or remortgage for a house when you have nothing more than a provable salary of £11,500. Of course there are lenders who would take into account the dividends and other stuff but by god will you be paying a lot more in interest on your mortgage.
albion:
robbo99:
kcrussell25:
I am paye for the reasons above so not affected but did wonder something if anyone has any thoughts.If in 5 years time for example the tax man decides that ltd driver was employed and owes x amount in back tax will ltd driver have a claim against the various companies they have worked for for unpaid holiday, pension, ssp etc?
Obviously depending on the company still trading but surely if its the ruled that the driver was employed for tax reasons then surely they get the associated benefits?
In an ideal world I would say that the worker should be entitled to benefits you mention if it was found that the worker was deemed to be an employee and not a legitimate Ltd Co for the work he carried out.
In the real world, I wonder how much time and money it would cost to recover benefits especially if the worker had worked for many agencies over the 5 year period, especially for odd days / odd weeks work carried out. It would probably take a worker to go through the courts as a test case to get a ruling.
The Pimlico Plumbers ruling is being appealed through the courts and will probably take years to settle.Just to clarify, my drivers are PAYE and I have no-one, nor would I, who is self-employed work for me.
However, if I was Charlie from Pimlico, I’d be getting my highly paid accountant to shovel as much as poss into pensions, wifes pension, Cayman Islands, latest tax wheeze, pay myself dividends of a few zillion and then say there you go, I’m finishing my company and there’s £3.50 left after paying suppliers, pay any outstanding holiday/SSP/pension out of that and laugh all the way to my mansion in the Bahamas. He doesn’t need to work, he could finish if he wanted to.
The pimlico is different from what I asked because they are disputing status, side note I believe him to be an employee on a tax fiddle who suddenly wanted to be an employee when it suits.
My question was that if hmrc decides you are an employee the debate is over (unless either side wants a long and expensive fight) so I would expect that to be beyond doubt. I agree it is likely to not be worth for odd day/week bookings but I know some drivers who are “permanent” but employed ltd, still see it advertised on Facebook. In that case I think it would be well worth chasing. I think moneyclaim online is quite cheap and easy and whilst Albion rightly says the owner of Pimlico could stop tomorrow a lot of companies wouldn’t want to. Could it actually put some out of business for these bills going back a few years?
kcrussell25:
albion:
robbo99:
kcrussell25:
I am paye for the reasons above so not affected but did wonder something if anyone has any thoughts.If in 5 years time for example the tax man decides that ltd driver was employed and owes x amount in back tax will ltd driver have a claim against the various companies they have worked for for unpaid holiday, pension, ssp etc?
Obviously depending on the company still trading but surely if its the ruled that the driver was employed for tax reasons then surely they get the associated benefits?
In an ideal world I would say that the worker should be entitled to benefits you mention if it was found that the worker was deemed to be an employee and not a legitimate Ltd Co for the work he carried out.
In the real world, I wonder how much time and money it would cost to recover benefits especially if the worker had worked for many agencies over the 5 year period, especially for odd days / odd weeks work carried out. It would probably take a worker to go through the courts as a test case to get a ruling.
The Pimlico Plumbers ruling is being appealed through the courts and will probably take years to settle.Just to clarify, my drivers are PAYE and I have no-one, nor would I, who is self-employed work for me.
However, if I was Charlie from Pimlico, I’d be getting my highly paid accountant to shovel as much as poss into pensions, wifes pension, Cayman Islands, latest tax wheeze, pay myself dividends of a few zillion and then say there you go, I’m finishing my company and there’s £3.50 left after paying suppliers, pay any outstanding holiday/SSP/pension out of that and laugh all the way to my mansion in the Bahamas. He doesn’t need to work, he could finish if he wanted to.
The pimlico is different from what I asked because they are disputing status, side note I believe him to be an employee on a tax fiddle who suddenly wanted to be an employee when it suits.
My question was that if hmrc decides you are an employee the debate is over (unless either side wants a long and expensive fight) so I would expect that to be beyond doubt. I agree it is likely to not be worth for odd day/week bookings but I know some drivers who are “permanent” but employed ltd, still see it advertised on Facebook. In that case I think it would be well worth chasing. I think moneyclaim online is quite cheap and easy and whilst Albion rightly says the owner of Pimlico could stop tomorrow a lot of companies wouldn’t want to. Could it actually put some out of business for these bills going back a few years?
For HMRC to make a decision on someones employment status (IR35) then that is their view of a workers status, ie employee or Director of a stand alone Ltd Company. A worker can’t just make a claim to money claim online against an ex or current employer just because HMRC demand a payment of back dated tax / ni from the worker due to him / her being classed as an employee. These matters have to go through Tax Tribunals and can go all the way through the court system right to the top. Uber, Pimlico Plumbers, Ryan Air Pilots, Christa Ackroyd, (ex BBC look North presenter) and many other examples prove the many grey areas involved in deciding someones employment status. When a test case has gone the full rounds, (and if the worker loses), then that would be the time to try to recover any monies owing for holiday pay and so on but as stated being owed it and recovering it are two different matters.
Don’t listen to this lot they no ■■■■ all……. I been doing ltd for last 8 years pal and as long as you do it correctly you wont have any problems just don’t fiddle the system and get a good high st accountant.
dandyhighwayman2:
Don’t listen to this lot they no [zb] all……. I been doing ltd for last 8 years pal and as long as you do it correctly you wont have any problems just don’t fiddle the system and get a good high st accountant.
So you have your own O licence and you are not under any supervision, direction or control. And you operate your own wagon.
Good on you mate. (Unless you don’t have your own O licence and are talking ■■■■■■■■ ) All being well doing it for 8 years mate, that does not mean it’s legal/correct though. Do us a favour though, if you get a massive tax bill, post it on here so we can all laugh at you.
dandyhighwayman2:
Don’t listen to this lot they no [zb] all……. I been doing ltd for last 8 years pal and as long as you do it correctly you wont have any problems just don’t fiddle the system and get a good high st accountant.
And yet the advice from Backhouse Jones, the country’s leading transport operator and DVSA at an RHA conference, is that to be self employed, you have to have a truck. That’s it, in its simplest form. I think those two outfits may know quite a bit .
My lads roll up, get paid a decent rate, paid all the way through. They get 28 days holiday, pension, only SSP, but that’s better than nothing, guaranteed pay 8 hours a day if the wheels don’t turn. They don’t have to pay an accountant. And being all moralistic because I pay my personal taxes, no dividends, my lads can feel smug that they actually contribute to society instead of trying to take all the time.
dandyhighwayman2:
Don’t listen to this lot they no [zb] all……. I been doing ltd for last 8 years pal and as long as you do it correctly you wont have any problems just don’t fiddle the system and get a good high st accountant.
So you fully understand the implications of IR35 then ?
albion:
dandyhighwayman2:
Don’t listen to this lot they no [zb] all……. I been doing ltd for last 8 years pal and as long as you do it correctly you wont have any problems just don’t fiddle the system and get a good high st accountant.And yet the advice from Backhouse Jones, the country’s leading transport operator and DVSA at an RHA conference, is that to be self employed, you have to have a truck. That’s it, in its simplest form. I think those two outfits may know quite a bit .
They might “know quite a bit” but they are both wrong as there is nothing set in law that states any such requirement. There is a pretty simple list of questions on HMRC website to check your employment status and whether you are inside or outside IR35 and no matter which way you try to interpret or twist the criteria, 99% of “self-employed” or ltd co drivers fall inside IR35 on 3 crucial points :
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Control. Self employed workers should exercise a significant degree of independent control over how they organise and carryout their work. That doesn’t happen as a self-employed or ltd co driver as you are told when and where they want you to start work. They are in control, not you. = inside IR35.
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Workmanship. Within reason, the more freedom the worker has in the detail of the way the work is carried out the better. You must also make it clear that the worker will have to put right any faulty work at his or her own expense. That doesn’t happen in any haulage yard where you are given an armful of delivery notes and a route manifest telling you how they want the job done. They are in control, not you. = inside IR35.
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Substitution. One of the strongest tests of self employment is the right to substitute a worker who is equally capable of carrying out the work. If you are unable to do the work yourself you must be able to provide a substitute in your place. No driver is going to be able to do that, but even if they could the client is unlikely to accept them. = inside IR35.
All these one-man band ltd co drivers that are just blindly carrying on regardless thinking it doesn’t apply to them are deluding themselves. I was one of them and told myself and anyone that’d listen that it’d be fine as I made sure my books were all in order and didn’t take the ■■■■ with claims and expenses so they wouldn’t be interested in little fish like me. And touch wood it hasn’t come back to haunt me yet, but there’s no doubting that it’s very much on HMRCs radar these days and the recent cases where they’ve hit drivers and other industries with big tax bills shows that they’re stepping up their game. Regardless of how good my books are and how expensive my accountant is, if they decided to single me out for a tax inspection there is no question that I’d be deemed to be inside IR35 for failing the 3 criterion above (just as any another one-man band driver would).
Would they actually come after you? How lucky are you feeling, punk? Truth be known I’d probably still be winging it right now, but the changes to the CT threshold and rendering FRS worthless along with greatly reducing the expense claims and other stuff to offset my tax bill all combined to become the final nail in the coffin for me and no longer worthwhile doing. Sure, if you can get companies to use you for £20 an hour through the week then it’s worth the risk and you can build up a slush fund if you’re unlucky enough to get HMRC come knocking. But let’s be realistic: no company is going to use you at 20 quid an hour. You struggle to get more than 2 or 3 an hour above what the permies are getting as all the agencies are in the race to the bottom with the rates and for an extra couple of quid an hour when you’re not getting any holiday pay and you have to pay your NI, togs, equipment, PLI and accountant out of that, with no guarantee of work from one day to the next and no guarantee of being paid by the company/agency for the work you’ve done either it’s just not financially beneficial anymore.
It was the FRS that made it worthwhile as you were effectively increasing your income by 20% (10% in real terms) just by being voluntarily registered for flat-rate VAT. That was a nice little boost and went quite a long way to paying one’s personal tax bill each year. Now, if you’re unlucky enough to get a tax inspection, by the time they’ve finished you’ll have actually earned less than a PAYE driver, once you factor everything in.
Nothing will change though but I predict over the coming years we’ll see an increasing amount of “HELP! I’ve just had a tax inspection and have to find £20k by the end of the month!!!” posts populating forums all over the land.
There’s none so blind as those who will not see…
If it sounds too good to be true…
It is.
Sent from my SM-G950W using Tapatalk
As someone who has been on the receiving end of a HMRC audit it’s not nice.
3 years worth of accounts, access to bank statements for those 3 years, payment providers I used, in fact I was so open I felt like I’d been felched by a velociraptor (quick dinosaur reference for the kids).
Anyway I had been doing my own accounts working from home, all was ok apart from I’d made the schoolboy error of offsetting my entire mortgage against my income. This was a little naughty and I ended up having to pay back £3k in back taxes and sharpish.
On the plus side I avoided the HMRC penalty of 100% fine of tax owed due to coming clean and having a little sob. IIRC I got hit with 10%.
N.B. The fine can be up to 200% if your well dodgy.
To be fair my tax inspector was gorgeous.
Anyway the wheels of the HMRC may turn slowly but they do turn, some will get away with it some won’t.
Like I said if you do it correctly then you have nothing to worry about unlike a few I know.
Pay yourself minimum wage and low dividends and pay your taxes accordingly.
Keep control of all your accounts, I use Microsoft excel and a good accountant.
Show profit in your business HMRC cannot take unless its been taken.
Don’t read to much into RHA I had dealings with them years ago and total waste of space
Take as many holidays as one wants because your under nobody control
IR35 ? I invented it