Conor:
Roymondo:
Harry Monk:
Agree with this. I do agency work on a PAYE basis, when I started my own limited company was still active from my owner-driver days so I could have worked on a limited company basis for £2 an hour more but when I did the maths it just wasn’t worth it. Possibly in my case it’s slightly different in that I can claim back all of the income tax I pay when the tax year ends but I figure I’d have to work a hell of a lot of hours to make limited company worthwhile.I roughed out some figures, assuming 50 hours a week, every week.
Under PAYE (£10 per hour, paid over 52 weeks, as under current legislation you’d be entitled to holiday pay):
Gross pay £31,200
Tax (£3,940)
NI (£2,764)
Net pay £24,496Running as a Ltd Co at £12 per hour, paid over 48 weeks (i.e. no holiday pay)
Company income £34,560
Salary (£11,500)
Employer NI (£445)
Accountant fees (£500)Profit before tax £22,115
Corporation Tax @20% (£4,423)
Profit after tax £17,692Assuming all profits paid as dividend, your total income from the company would be £17,692 + £11,500 = £29.192. There would also be a £400 employee NI deduction, so net figure of around £28,800
I’ve probably missed something along the way, but that’s pretty much the bare bones of it.
Yes you’ve missed the fact that you get 5.6 weeks paid holiday not 4 weeks so the self employed would have to be over 46.4 weeks, not 48. You’ve also missed out the workplace pension contributions, currently 1-3%, soon to be 3% for all which would add just over £1000 to the PAYE not taking into account the reduction in income tax due to employee pension contributions. You would also have to reduce the self employed gross by £960.
That brings the difference down to a couple of grand, £40 a week, and for that you get to sign away all your employment rights, the right to be paid on time or even paid at all.
And sick pay.
And guaranteed work. If I’m quiet and have no work, my lads get paid at least their 8 hours a day. Goes quiet on limited and you get diddly squat.
And as I keep pointing out, you are not self-employed as a driver unless you own a vehicle - that is HMRCs position, the RHA & FTAs position and Backhouse Jones transport solicitor’s position. Over three conference type things I’ve gone to, that position has not changed.
And really, do you think that an agency or whomever is asking you to go Ltd/self-employed because it’s better for you or better for them… 