robbo99.:
And there is a very valid post, anyone can be a self employed or Director of a Ltd Co whatever they want to be, so why a labour only as and when required driver is frowned upon beats me.
Owning a truck to be properly self employed hasn’t exactly been on HMRCs hit list for the last 20 or so years. HMRC work to their own agenda, don’t know whether you are aware of a site called “HMRC is 5h1te” but it certainly opens my eyes along with the very public ■■■■ ups that they are renowned for.
Can you think of any other industries that supply labour only that haven’t been caught up in the IR35 net?
Not really up on different industries but from now on big changes will affect the private sector as a whole. If it’s deemed a workers employment status should be that of employee then it’s PAYE.
But that’s my point. How can a retired person just working an odd day here and there to suit themselves be deemed a PAYE employee of the company in terms of rights, according to HMRC? It makes no sense. HMRC is basically denying me the right to choose how I work and who I work for, funneling me to a national employment agency and umbrella payment front, both of which take a cut of the money and add layers of hassle and bureaucracy into the mix for no benefit to anyone other than themselves.
It seems that having the word “HGV driver” as your trade when registered for SA/LTD basically waves a big red flag at HMRC to keep tabs on how you’re working. If I changed that to, eg. “Commercial vehicle techician” then from what I can see, on paper I could continue being self-employed and it’s unlikely that HMRC would know any different, nor even care, so long as the right amount of tax and NI were paid and the figures looked ok. Who is going to know or care that after my “vehicle technician-ing” I was asked to move a trailer 100 miles away and bring a different one back? The chances of them wanting to check my car boot or van was full of my own tools is very unlikely in my opinion and investigations are generally only triggered if there’s something on your return which causes them to raise an eyebrow. Other than being slightly economical with the truth about what your actual trade is I don’t see what the issue would be. HMRC would still get their dues, client would get a reliable, known quantity for a rate he’d be happy with vs. the much higher rate than an agency would charge, and I get the rate I’m happy working for without losing 25% of it in fees and holiday pay that I don’t need nor want.
Fully agree, but with my cynical mind I believe government want as many people on PAYE as possible so they can get their grubby little fingers on their cut before the worker does. Add to that the tax perks the worker gets for being Ltd/SE, government/HMRC do not like the little man gaining crumbs but turn a blind eye to the mega rich corporations taking the Michael out of the UK’s neolithic tax rules.
205:
Who’s taking a 25% reduction in their pay and who’s going to quit?
At my local RDC, LTD drivers who have gone PAYE have had a big pay increase due to pay parity and paid holidays.
LTD drivers who didn’t transfer to PAYE have been let go.
That sounds like this fake news we keep hearing about, do you have figures or is it MMTM.
Starting today if i accept PAYE, i will lose £2:50 p/hr for mon to friday and will still get same rates as before for sat/sun
after 12 weeks i will be forced onto full parity pay and lose the sat/sun rates and get £5 meal allowance every day and this is for a firm that cant get there own drivers out
on the weekend cos they pay a flat rate all week long
robbo99.:
Will you get it in your head that tax avoidance and tax evasion are totally different. Agencies conspiring with companies to evade paying tax is tax evasion. A lorry driver set up as self employed is not breaking the law by breaching IR35 legislation on employment status, how many times do you need telling. It comes under tax avoidance. The new tax year in a few days time is when the enforcement in the private sector takes place.
I know they’re different things. Tax avoidance is the legal use of tax regulations to reduce your tax bill which after 6th of April Ltd drivers, especially those running via an agency, won’t be doing. If you’re in breach of IR35 you are committing tax evasion, you’re breaking the law. A lorry driver setting up as Ltd self employed is breaking the law by breaching IR35. It’s not tax avoidance, it’s tax evasion because HMRC have deemed that a lorry driver who does not have any financial interest in the vehicle he is driving, and therefore is not liable for suffering any losses that it may occur, is not eligible to be treated as self employed and it’s treated as disguised employment which again is illegal. In the case of agency Ltd drivers and IR35 both the agency and the driver are committing offences under the act I posted. There are plenty of websites from tax accountancy firms and employment lawyers that’ll tell you the same as everything I’ve posted. Quite why you think you know better than them I do not know.
So once again, tell me how a lorry driver who’s employment status will be determined by the agency or end client, with the new IR35 changes, will be commiting tax evasion if his employment status is incorrect. Tax avoidance old chap, not illegal
And as for the many thousands of lorry drivers set up as self employed, with no truck and no risk of financial losses committing tax evasion, utter twaddle.
Its the end client who decides employment status, the agency can only decide if end client is classed as a small business under 10million turnover
so its all good news for large firms who can now have drivers, who are basically on standby without pay, for the same cost as a full-time employee when needed , if theres any agency drivers left after the the first few payslips on PAYE
205:
That sounds like this fake news we keep hearing about…Starting today if i accept PAYE, I will lose £2.50/hr for Monday to Friday and will still get same rates as before for Saturday/Sunday…after 12 weeks i will be forced onto full parity pay…
If you have been working for a client for over 12 weeks through a LTD company you should get put on parity pay straight away when you transfer to PAYE. The only exception is if you haven’t worked for 6 weeks, in which case you would have to work 12 weeks again to get back on pay parity.
It’s well known that LTD drivers get an effective hourly rate less than a client’s own drivers. This wasn’t always the case. Before the financial crisis in 2008/2009 LTD drivers were paid more than a client’s own drivers.
205:
Who’s taking a 25% reduction in their pay and who’s going to quit?
At my local RDC, LTD drivers who have gone PAYE have had a big pay increase due to pay parity and paid holidays.
LTD drivers who didn’t transfer to PAYE have been let go.
That sounds like this fake news we keep hearing about, do you have figures or is it MMTM.
Starting today if i accept PAYE, i will lose £2:50 p/hr for mon to friday and will still get same rates as before for sat/sun
after 12 weeks i will be forced onto full parity pay and lose the sat/sun rates and get £5 meal allowance every day and this is for a firm that cant get there own drivers out
on the weekend cos they pay a flat rate all week long
FYI I work on a contract for 6 months a year. Last year as a Ltd driver we were on Mon-Fri £17 ph. This year we are being put through umbrella, they agency have negotiated a rate of £21.36 so that we still get £17 after all the fees are deducted. (we still have our own tax & NI to pay). So 25% sounds spot on.
robbo99.:
Will you get it in your head that tax avoidance and tax evasion are totally different. Agencies conspiring with companies to evade paying tax is tax evasion. A lorry driver set up as self employed is not breaking the law by breaching IR35 legislation on employment status, how many times do you need telling. It comes under tax avoidance. The new tax year in a few days time is when the enforcement in the private sector takes place.
I know they’re different things. Tax avoidance is the legal use of tax regulations to reduce your tax bill which after 6th of April Ltd drivers, especially those running via an agency, won’t be doing. If you’re in breach of IR35 you are committing tax evasion, you’re breaking the law. A lorry driver setting up as Ltd self employed is breaking the law by breaching IR35. It’s not tax avoidance, it’s tax evasion because HMRC have deemed that a lorry driver who does not have any financial interest in the vehicle he is driving, and therefore is not liable for suffering any losses that it may occur, is not eligible to be treated as self employed and it’s treated as disguised employment which again is illegal. In the case of agency Ltd drivers and IR35 both the agency and the driver are committing offences under the act I posted. There are plenty of websites from tax accountancy firms and employment lawyers that’ll tell you the same as everything I’ve posted. Quite why you think you know better than them I do not know.
So once again, tell me how a lorry driver who’s employment status will be determined by the agency or end client, with the new IR35 changes, will be commiting tax evasion if his employment status is incorrect. Tax avoidance old chap, not illegal
And as for the many thousands of lorry drivers set up as self employed, with no truck and no risk of financial losses committing tax evasion, utter twaddle.
Its the end client who decides employment status, the agency can only decide if end client is classed as a small business under 10million turnover
so its all good news for large firms who can now have drivers, who are basically on standby without pay, for the same cost as a full-time employee when needed , if theres any agency drivers left after the the first few payslips on PAYE
Yes it will be the end client who determines employment status but that will be communicated by the agency to the worker, ie the middle man being the agency. How having PAYE driver’s on tap now will be cheaper for firms than hiring in a ltd driver , as of old, doesn’t make much sense to me, as agency rates over the years have been cut to the bone. Firms having to pay the extra costs associated with PAYE entitlement will surely take the financial hit of IR35 reforms? As for umbrella schemes, (grey areas) fees surely increase wage costs?
Where I am working, they put the PAYE rates up by about £1hr then if you op out of holiday pay they increase by a extra £2hr. So holidays or extra money your choice.
205:
Who’s taking a 25% reduction in their pay and who’s going to quit?
At my local RDC, LTD drivers who have gone PAYE have had a big pay increase due to pay parity and paid holidays.
LTD drivers who didn’t transfer to PAYE have been let go.
Great for the working man but I guess the end client takes the hit for the knock on effect of IR35 reforms, ie, a massive increase in their wage bills. Great! But I guess government fat cats will be mulling over how they can waste their expected windfall.
Oh boo hoo for the employer! Actually expected to pay their taxes as well as normal levels of wages, rather than expecting the taxman (and hence other taxpayers) to subsidise their business.
205:
Who’s taking a 25% reduction in their pay and who’s going to quit?
At my local RDC, LTD drivers who have gone PAYE have had a big pay increase due to pay parity and paid holidays.
LTD drivers who didn’t transfer to PAYE have been let go.
Great for the working man but I guess the end client takes the hit for the knock on effect of IR35 reforms, ie, a massive increase in their wage bills. Great! But I guess government fat cats will be mulling over how they can waste their expected windfall.
Oh boo hoo for the employer! Actually expected to pay their taxes as well as normal levels of wages, rather than expecting the taxman (and hence other taxpayers) to subsidise their business.
Well …what I was actually meaning is the added costs of higher wages on the end client when some are already running on a whim and a prayer and the knock on effect on job security.
LazyDriver:
FYI I work on a contract for 6 months a year. Last year as a Ltd driver we were on Mon-Fri £17 ph. This year we are being put through umbrella, they agency have negotiated a rate of £21.36 so that we still get £17 after all the fees are deducted. (we still have our own tax & NI to pay). So 25% sounds spot on.
Most LTD drivers weren’t getting £17/hour…at least for the Monday to Friday day rate.
The problem is you’ve been transferred onto umbrella, not PAYE.
LTD and PAYE have a different taxation structure.
In the 2020/21 tax year, PAYE drivers would have paid 32% tax on earnings over £12,500 (20% income tax and 12% employee’s NI)
In the 2020/21 tax year, LTD drivers would have paid 25.075% tax on earnings over £14,500 (19% corporation tax and 6.075% dividend tax)
Note that the 7.5% dividend tax is actually only 6.075% of the driver’s total income. That’s because the 7.5% is used to calculate the dividend tax after the 19% corporation tax has been taken off, ie. it’s 6.075% off the top line, or 7.5% off the bottom line. In the calculations it does actually come off the bottom line…hence the 7.5% rate. However, 7.5% off the bottom line is the same amount of tax as 6.075% off the top line.
LazyDriver:
FYI I work on a contract for 6 months a year. Last year as a Ltd driver we were on Mon-Fri £17 ph. This year we are being put through umbrella, they agency have negotiated a rate of £21.36 so that we still get £17 after all the fees are deducted. (we still have our own tax & NI to pay). So 25% sounds spot on.
Most LTD drivers weren’t getting £17/hour…at least for the Monday to Friday day rate.
The problem is you’ve been transferred onto umbrella, not PAYE.
LTD and PAYE have a different taxation structure.
In the 2020/21 tax year, PAYE drivers would have paid 32% tax on earnings over £12,500 (20% income tax and 12% employee’s NI)
In the 2020/21 tax year, LTD drivers would have paid 25.075% tax on earnings over £14,500 (19% corporation tax and 6.075% dividend tax)
Note that the 7.5% dividend tax is actually only 6.075% of the driver’s total income. That’s because the 7.5% is used to calculate the dividend tax after the 19% corporation tax has been taken off, ie. it’s 6.075% off the top line, or 7.5% off the bottom line. In the calculations it does actually come off the bottom line…hence the 7.5% rate. However, 7.5% off the bottom line is the same amount of tax as 6.075% off the top line.
The way this year has been explained to me, the increase pays all the extra costs the umbrella bandits are going to take. We can then also get holiday pay (taken out of those extra costs) of approx. £2ph which we can take as part of our pay. That’ll go towards paying the extra tax & NI we’ll end up paying. It’s only a 6 month contract, but it fits with me.
Hi. first of all go onto the HMRC site and do the questionaire about inside or outside ir 35
imho the umbrella companies will be the next inline for proper scutiny and forced to give up offering services thus leaving drivers under that scheme liable for a shed load of outstanding tax.
also as i understand it each L.T.D. company should be assesed seperatly on its own merits by the end user company which of course is NOT happening as it costs time and money to do, so they have quite unfairly just said a blanket NO to everything L.T.D.
thus forcing agency drivers to go PAYE or umbrella in my situation i have had to go Paye as i do not trust umbrella companies
not a choice i wanted or needed as i was quite happy being indipendent and sorting my own finances out with my accountant.
hopefully this will change in the future ( but i doubt it as its down to money )
The real villans of all this of course are the polititcians who cannot see further than their snouts in the trough, that yes i have streamlined my tax affairs but the money get spent and goes a dozen different ways suporting local businesses etc
The chances of them wanting to check my car boot or van was full of my own tools is very unlikely in my opinion and investigations are generally only triggered if there’s something on your return which causes them to raise an eyebrow. Other than being slightly economical with the truth about what your actual trade is
and this is for a firm that cant get there own drivers out