Doing a bit of work for a new agency. They offered/encouraged me to sign up for a scheme which gets me a bit more pay £1.50 an hour or so. And allows me to claim mileage from home. Called a hybrid scheme. The way they said it it sounds like you get some of the benefits of being a limited driver, without being one.
Any reason not to sign up? Things that sound to good to be true sometimes are…
DON’T Do it !
If they mess your tax up it’s you who will get HMRC after you
Sent while from gods know where
Offered/encouraged ■■
Who is going to benefit from this scam then? Is this the new umbrella system ■■ HYBRID ■■?
Who’s going to benefit, doubt it’ll be the driver !
Tilt…
Swerve.
AVOID!!!
These schemes work in different ways so I can’t say exactly how this particular one works.
However, when they say your pay rate is more, it certainly isn’t costing the agency any more to employ you. It is probably costing them less.
It may well be an umbrella scheme where you are officially employed by a third party you have no connection with other than it pays your wages.
Also bear in mind that the payroll or umbrella company needs to make money too, but hang on there is no more money. This is where a significant portion of your tax savings on travel will actually be to pay this company, reducing any benefit there may be (there may not be any benefit and you could be worse off).
The inflated rate may well be the rate per hour that is passed on to the umbrella company. However, will an additional percentage be sent for holiday pay? The answer is possibly not. Will an additional percentage be sent to cover employer’s NI? Possibly not. The umbrella company may also have a fee structure that means you pay a certain amount even in weeks where you may work very little. When these things are taken into account suddenly £1.50 more really doesn’t cover it.
The simplest thing you can actually do is to get paid straight PAYE. If you really wish to claim tax back, then you can do this yourself. Either go self-assessment or you can claim online without going self-assessment if your total cost of travel and subsistence is less than £2500 per year.
You just need to keep a record of your mileage per day and also your shift lengths. A shift of over 5 hours counts for £5 per day subsistence and over 10 hours counts for £10 per day. The mileage rate is 45p per mile if I remember correctly. Effectively you would probably be able to claim 20% of whatever amount you spend on travel and subsistence. It can add up, so it is worth it.
Conor is your man for tax implications.
He’ll give you a full breakdown, give you his expert opinion and then all you need to do is the exact opposite and you’ll be fine
Right. Good advice. I drive part time, so any benefits would be proportionally less. I think I’ll give it miss. Interesting that you can do it yourself. I did wonder where the extra money was coming from.
I’d not think just this scheme on agency will get the tax man after you , I’m agency paye & get letters on a regular basis telling me I owe x,y or z
The-Snowman:
Conor is your man for tax implications.He’ll give you a full breakdown, give you his expert opinion and then all you need to do its the exact opposite and you’ll be fine
granddaddylow:
Doing a bit of work for a new agency. They offered/encouraged me to sign up for a scheme which gets me a bit more pay £1.50 an hour or so. And allows me to claim mileage from home. Called a hybrid scheme. The way they said it it sounds like you get some of the benefits of being a limited driver, without being one.Any reason not to sign up? Things that sound to good to be true sometimes are…
It’s illegal if they’re putting you in for mileage. Even if you were properly self employed HMRC treat travel between your home and the first place of work of the day and the last place of work of the day and back to home as ordinary commuting and it is not claimable.
Sounds like an umbrella scheme but I suspect they neglected to tell you about the fixed weekly fee which is the same whether you work 50 hours or 5 a week.
Do not take anything except PAYE.
It sounds dodgy to me, i know it’s a pain but you could call your tax office and ask them what it would mean to you and your earnings if you joined the scheme.
If you work on the principle that no employer ever will give you free cash willingly over a long term (excluding bonuses from good bosses few and far between) you won’t go far wrong.
Conor:
granddaddylow:
Doing a bit of work for a new agency. They offered/encouraged me to sign up for a scheme which gets me a bit more pay £1.50 an hour or so. And allows me to claim mileage from home. Called a hybrid scheme. The way they said it it sounds like you get some of the benefits of being a limited driver, without being one.Any reason not to sign up? Things that sound to good to be true sometimes are…
It’s illegal if they’re putting you in for mileage. Even if you were properly self employed HMRC treat travel between your home and the first place of work of the day and the last place of work of the day and back to home as ordinary commuting and it is not claimable.
Sounds like an umbrella scheme but I suspect they neglected to tell you about the fixed weekly fee which is the same whether you work 50 hours or 5 a week.
Do not take anything except PAYE.
They did say it was still PAYE… not sure how it can be. Where does the money come from?!
granddaddylow:
Conor:
granddaddylow:
Doing a bit of work for a new agency. They offered/encouraged me to sign up for a scheme which gets me a bit more pay £1.50 an hour or so. And allows me to claim mileage from home. Called a hybrid scheme. The way they said it it sounds like you get some of the benefits of being a limited driver, without being one.Any reason not to sign up? Things that sound to good to be true sometimes are…
It’s illegal if they’re putting you in for mileage. Even if you were properly self employed HMRC treat travel between your home and the first place of work of the day and the last place of work of the day and back to home as ordinary commuting and it is not claimable.
Sounds like an umbrella scheme but I suspect they neglected to tell you about the fixed weekly fee which is the same whether you work 50 hours or 5 a week.
Do not take anything except PAYE.
They did say it was still PAYE… not sure how it can be. Where does the money come from?!
Never mind what they say, get it all in writing, and read it at home, before signing or agreeing to anything.
If in doubt ask for opinions on here again.
PAYE for who? Agency or as said some 3rd party payroll (umbrella) company.
And as already said, you can’t normally claim from home to normal (1st) place of work.
Regarding employment, the only way to sleep at night without the worry of a big brown envelope landing on your doormat with a tax demand from HMRC to the tune of ££££’s because of the mickey mouse way these schemes pay is to be PAYE employed by the agency. At the end of the day you and you alone are liable for your tax affairs. These Umbrella schemes or whatever else they may be classed as are not there for the driver’s benefit, and when the brown stuff hits the fan, guess what ? It will not be their problem but it will be yours. About time theses schemes were stopped, especially when the agency tries to railroad the worker into using them. HMRC are very good at turning a blind eye to what’s going on for years, then landing the worker with a large tax bill whilst doing nothing with the perpetrators of these schemes, they just let them walk away untouched, in some cases to set up another scam with the same result.
DONT DO IT.
I was offered this scheme a while back, can’t remember what they called it, but it’s a company that will set you up as a ltd company but they do the “running”. It’s all in your name and you will be liable.
It’s LTD company but with a back door to Try to get around the Tax man. You’ll be charged a fee every week even if you don’t work, nowhere near worth it.
Just tell them, as I did, PAYE on the agency books. You get your pay each week and you don’t have to worry. I’m actually better off now than I was on that umbrella ■■■■■
If you work through an agency at the same client and location all the time then this does rule out tax relief on travel expenses as it is a normal place of work.
However, no matter if through an intermediary or not, there is still the concept of a temporary workplace. It is a fairly complex area, but if you are not working continuously at a client then it can be argued that each place you go to is a temporary workplace.
An example might be an agency driver that works fairly ad-hoc and goes to many different clients, maybe for a week here and there and shifts are to a large extent confirmed the day before.
If shifts are confirmed the day before with absolutely no guarantee of any hours, then it can also be argued that you are not in continuous employment, because the agency could decide not to call you at any time. If you were to be put on a rota where you had an expectation of staying on for a period of time, this would effectively mean that you have a normal place of work and no tax relief would be possible on travel.
This is my take on it anyway. I have claimed tax back on travel for a few years. I have had the spreadsheets ready to submit to HMRC, but they have never requested them.
Conor:
It’s illegal if they’re putting you in for mileage. Even if you were properly self employed HMRC treat travel between your home and the first place of work of the day and the last place of work of the day and back to home as ordinary commuting and it is not claimable.
While it’s correct to say that ordinary commuting is not allowable against tax, HMRC don’t use that definition. They quite clearly state that travel to/from a permanent workplace is not allowable while travel to/from a temporary workplace (as in most agency type work) most certainly is.
gov.uk/hmrc-internal-manual … l/eim32055
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Conor:
It’s illegal if they’re putting you in for mileage. Even if you were properly self employed HMRC treat travel between your home and the first place of work of the day and the last place of work of the day and back to home as ordinary commuting and it is not claimable.
My accountant puts all my mileage through every year.
Between a qualified chartered accountant telling me one thing and a truck driving on an interent telling me another its just so hard to know who to believe…
The-Snowman:
My accountant puts all my mileage through every year.
Between a qualified chartered accountant telling me one thing and a truck driving on an interent telling me another its just so hard to know who to believe…
The scheme my mate was using had a qualified chartered accountant doing the books, still didn’t stop HMRC billing him £5k.
Personally I’d be more inclined to believe what the accountant said if they were a tax specialist accountant. Like medicine accountancy is a very broad church and I’m quite sure you’d not want a gynaecologist doing brain surgery on you would you? So the only type of accountant I want doing my taxes is a tax accountant. I happen to have one who is a family friend and has been for decades who represents people at HMRC investigations and audits with a very good track record.
And in regards to being able to claim because you’re going to a temporary place of work…errr, no.
“If you work in a defined geographical area, any travel from home to the edge of that area, and back again, is ordinary commuting and you cannot claim the costs of that part of your journeys.”
So no you can’t.
The-Snowman:
Between a qualified chartered accountant telling me one thing and a truck driving on an interent telling me another its just so hard to know who to believe…
Don’t believe…
For a minute, that accountants (be they chartered or not) don’t get things wrong, because they do. Like I did all those years ago when I engaged the services of an accountant, I signed a very long and specifically worded disclaimer that exonerated them from any blame or financial penalty for errors, misunderstandings and/or ignorance of ever changing HMRC rules. I’m sure you’ve signed the same sort of disclaimer too.
But yeh, I’d still be going with my accountants advice on matters regarding tax law. Mainly because I could possibly sue for any monies lost as opposed to never knowing who the ■■■■ anyone is on the internet.