the maoster:
When I was self employed I always found HMRC an absolute pleasure to deal with, in fact they often sent me complimentary letters telling me that my tax return was "outstanding " when in all honesty I couldn’t even remember sending it in!
I love the way these types of threads are always filled with posts from lorry drivers who are sure they know better than qualified accountants and are experts in the complexity of the tax rules.
The-Snowman:
I love the way these types of threads are always filled with posts from lorry drivers who are sure they know better than qualified accountants and are experts in the complexity of the tax rules.
LTD agency drivers are not only on a higher hourly rate than PAYE agency drivers, but also pay a lot less tax. The comparison between IT workers who work directly for one employer and LTD drivers who work through an agency for many clients is simply not a valid comparison.
Even IT workers now have little to worry about, as HMRC have largely stopped pursuing them. IR35 is simply kept on the law books to scare IT workers into going PAYE. It has little relevance to LTD drivers who work through an agency, because the agency can substitute a lorry driver. For example, client asks agency can you send in Tom on Monday. Agency replies, no we’re sending in ■■■■. Client asks agency can you send in ■■■■ on Tuesday. Agency replies, no we’re sending in Harry…
LTD drivers don’t pay any national insurance, either employer’s NI or employee’s NI. This is because the £8,424 (2018/19 tax year) that they pay themselves each year through their company payroll is completely tax free and the rest of their income is taken in dividends which doesn’t attract any national insurance or income tax.
The-Snowman:
I love the way these types of threads are always filled with posts from lorry drivers who are sure they know better than qualified accountants and are experts in the complexity of the tax rules.
But many also claim to know better than HMRC, and have then come a cropper. Like I said, it is frequently qualified accountants who have advised the people who have later been whacked with tax demands.
Rjan:
The-Snowman:
I love the way these types of threads are always filled with posts from lorry drivers who are sure they know better than qualified accountants and are experts in the complexity of the tax rules.But many also claim to know better than HMRC, and have then come a cropper. Like I said, it is frequently qualified accountants who have advised the people who have later been whacked with tax demands.
Im not saying accountants are infallible but ill still trust my chartered accountant before a lorry driver when it comes to my tax affairs
The-Snowman:
Rjan:
The-Snowman:
I love the way these types of threads are always filled with posts from lorry drivers who are sure they know better than qualified accountants and are experts in the complexity of the tax rules.But many also claim to know better than HMRC, and have then come a cropper. Like I said, it is frequently qualified accountants who have advised the people who have later been whacked with tax demands.
Im not saying accountants are infallible but ill still trust my chartered accountant before a lorry driver when it comes to my tax affairs
+1 It does make me smile how many tax experts there are on here! Think I might sack my accountant and employ the services of trucknet. 
carlston49:
LTD agency drivers are not only on a higher hourly rate than PAYE agency drivers
You think? You’re not taking into account the full picture.
An agency driver on £10/hr will get an additional £1.27 per hour in holiday pay and an additional 30p per hour in employer’s workplace pension contributions, none of which a Ltd agency driver will get from the agency so the Ltd driver needs to be on at least £11.57/hr if the PAYE rate is £10 just to nearly break even. I say nearly because the Ltd agency driver will most likely have accountancy costs at the very least, employer’s NI at a rate of 11% to pay in addition to any NI they have to pay when their accountant can’t magic away enough money. Many agencies only pay a quid, quid and a half an hour more than the PAYE rate.
but also pay a lot less tax.
The only way to do that is by falsely claiming expenses you haven’t had or claimed whilst not being entitled to them. Even if you use the model of low wage with dividends then dividends are taxed at the same rate as basic rate income tax, dividend tax being raised a few years ago because of the number of people abusing the model of low wage with dividends.
Talking of low wage with dividends, if you’re not paying any NI best of luck when it comes to getting the state pension cos you’ll get sod all if you’ve not been making any contributions. And best of luck getting the best mortgage rates on the market if you need a mortgage because the lenders with the lowest rates will only take what is on your wage slip into account and won’t count dividends. Any lender you get that will count dividends you’ll need to use a specialist mortgage broker to find and it won’t be cheap with either four figure fees and/or higher rates of interest on the mortgage. So whilst you may think you’re clever as you sit there looking at your income tax of £0 every week you’ll be doing it in blissful ignorance of the fact you’re biting yourself in the arse right up to the point when you find you have and it dawns on you that what it’ll cost you is more than you were congratulating yourself for saving in tax.
My parents thought they were being clever like you, managed to do the books in such a way they paid no tax/NI. They’re now retired having to pay rent because they couldn’t get a mortgage in the last quarter of a century as the incomes on their P60s was too low and they don’t qualify for anywhere near the full state pension.
elsa Lad:
+1 It does make me smile how many tax experts there are on here! Think I might sack my accountant and employ the services of trucknet.
It makes me smile how many drivers who claim to be self employed and know it all need to employ the services of an accountant to do their books and tax return. It isn’t rocket science and I managed to do mine just fine for years.
Conor:
And best of luck getting the best mortgage rates on the market if you need a mortgage because the lenders with the lowest rates will only take what is on your wage slip into account and won’t count dividends. Any lender you get that will count dividends you’ll need to use a specialist mortgage broker to find and it won’t be cheap with either four figure fees and/or higher rates of interest on the mortgage.
Wrong on so many levels it’s actually funny considering what an expert you like to think you are
Ok Conor, You got your opinions and way of doing things but so have I. I rather have the accountant advice me than listen to so called experts on trucket. At the moment the tax man seems to be after Self employed people on the so called umbrella schemes ( getting paid with loans etc) than ltd who pay Corporation tax after expenses. I like most other Ltd drivers keep a eye open what is happening with the HMRC and change direction if I think its time to do so.
As I believe you a agency driver as well, I sure you must chat to other agency drivers who are Ltd, do you know anyone who been checked and fined? I don’t know of any. If you use the services of a decent accountant who know how to present the books properly so nothing stands out HRMC hopefully wont flag anything up. It you use a dodgy firm like think accountants they be watching you.
In life nothing black & white, you have your ways of doing things others have theirs, we make our own decisions and make our own mistakes in life. I’m not saying you are right or wrong with you views on the subject, but remember its just your view and it might not be right!
The-Snowman:
Conor:
And best of luck getting the best mortgage rates on the market if you need a mortgage because the lenders with the lowest rates will only take what is on your wage slip into account and won’t count dividends. Any lender you get that will count dividends you’ll need to use a specialist mortgage broker to find and it won’t be cheap with either four figure fees and/or higher rates of interest on the mortgage.Wrong on so many levels it’s actually funny considering what an expert you like to think you are
He has stated an instance of exactly what he describes, by way of an anecdote about his own parents.
The fact is, we have seen that even qualified accountants get it wrong and tax evaders are then whacked with stiff bills.
Drivers here are not claiming vast expertise on tax law. But Conor has laid out his working. If you aren’t receiving probably an additional £2 an hour more on Ltd, then you are simply robbing yourself. You don’t have to be an expert in tax law to understand that argument.
As for whether any tax fiddles you involve yourself in are legitimate and compensate for robbing yourself, that remains an area of legal uncertainty. If you aren’t investigated, then the legitimacy of your tax affairs is a moot point - you could just make up any old figures, pay no tax, and if you aren’t investigated then you’ll be quids in regardless of the legality.
What I would note however is that there is no recent reported case of a driver engaging in these suspect arrangements being taken to tribunal and prevailing.
And the contractual formalism in which routine substitution clauses and other contractual charades were sufficient to prove self-employment, have been struck down by the Supreme Court. Arrangements involving general partnerships have also been struck down.
Drivers can pays their money and takes their choice in the end, but it’s foolish to suggest that the advice of any old accountant is worth any more than the next opinion on this subject.
Rjan:
He has stated an instance of exactly what he describes, by way of an anecdote about his own parents.The fact is, we have seen that even qualified accountants get it wrong and tax evaders are then whacked with stiff bills.
Drivers here are not claiming vast expertise on tax law. But Conor has laid out his working. If you aren’t receiving probably an additional £2 an hour more on Ltd, then you are simply robbing yourself. You don’t have to be an expert in tax law to understand that argument.
As for whether any tax fiddles you involve yourself in are legitimate and compensate for robbing yourself, that remains an area of legal uncertainty. If you aren’t investigated, then the legitimacy of your tax affairs is a moot point - you could just make up any old figures, pay no tax, and if you aren’t investigated then you’ll be quids in regardless of the legality.
What I would note however is that there is no recent reported case of a driver engaging in these suspect arrangements being taken to tribunal and prevailing.
And the contractual formalism in which routine substitution clauses and other contractual charades were sufficient to prove self-employment, have been struck down by the Supreme Court. Arrangements involving general partnerships have also been struck down.
Drivers can pays their money and takes their choice in the end, but it’s foolish to suggest that the advice of any old accountant is worth any more than the next opinion on this subject.
None of which is relevant to what I told him he was wrong about
Since the fixed rate vat was stopped there is no benefit whatsoever to being ltd.
I was ltd for several years and am much better off now on paye on the same job