If your going the self employed route sole trader has alot of advantages.
No corperation tax, book keeping becomes alot easier. You can use purchases work related to decrease your taxable amount each year. Plus if you trade from your home address you can add a % of utility bills, council tax and rent/mortgage as business expenses and these reduce your yearly tax bill.
I have ran 2 businesses in my time both as sole trader, did my own accounts it wasent difficult. You just have to retain all receipts etc in a file or scan them into your computer in case HMRC question you about them. But thats the same for Ltd anyways.
rebel1012:
If your going the self employed route sole trader has alot of advantages.
No corperation tax, book keeping becomes alot easier. You can use purchases work related to decrease your taxable amount each year. Plus if you trade from your home address you can add a % of utility bills, council tax and rent/mortgage as business expenses and these reduce your yearly tax bill.
I have ran 2 businesses in my time both as sole trader, did my own accounts it wasent difficult. You just have to retain all receipts etc in a file or scan them into your computer in case HMRC question you about them. But thats the same for Ltd anyways.
Was thinking myself as an employee of Ltd company I could be on minimum wage and drastically reduce all outgoing !!
Is there a massive difference between Ltd and sole trader when it comes to deductions ?
Get a book keeper for self employment ,You wont need an accountant .As said keep all bills receipts etc .im a self employed car restorer .Going hgv ,will see if i can do SE before paye ,But agencies come some BS about people not paying there taxes.thats not there business !There obviously in cahoots with the umbrellas .dont listen too them .
I was told to go ltd by an agency ,But it is only worth going ltd if you set it up yourself and blank these rip off umbrella prats agencies try to fob you off with.
PAYE - The employer is responsible for getting your tax situation right, if they ■■■■ it up they are the ones who have to get the broom out and clean up the mess. You can be left with an outstanding tax liability, but a) it’s unlikely b) it’s likely to be small c) a half decent firm will swallow the loss as it’s their fault you owe HMRC.
LTD - You are the director of a company that sells your time and skills as a driver to another company. Your company invoices according to agreement with the customer, and takes income. Out of that income your company has to pay you the individual via PAYE and/or Self Assessment. Your company will pay expenses of things like dividends, directors loans, corp tax, PAYE, job related expenses and accountancy fees. Bookkeeping isn’t rocket science but it’s a pain the ■■■■.
Umbrella - Same as LTD, except an umbrella company manages your company and rips you off for it. And it’s still your responsibility if it goes wrong.
For both LTD and Umbrella, you personally are liable for any tax related ■■■■ ups, and they have the potential to be big.
If you go LTD you can technically pay slightly less tax than when you are PAYE (boosting your take home), but you’ve got to be smart, know the rules inside out and have trusted, professional assistance. You also need to be disciplined enough to build your once-a-year tax payment as you earn it.
How much extra money is worth the hassle and potential downside? That’s a question only you can answer.
Hi, ive never posted on here before so bare with me… Ive been self employed as a sole trader for a few years now, obtaining work from 2 agencies and occasionally a local haulier. When I put my tax bill in my accountant claims for my car and fuel costs to commute, work clothes and equipment for the job eg. Gloves , hi viz etc my accountant seems to think everything is ok but I have been told by one agency i should go ltd and i have also been told by 2 other drivers I have to go ltd.
Am I legal as I stand now being a sole trader?
Thanks for any advice
simple_leaf:
Hi, ive never posted on here before so bare with me… Ive been self employed as a sole trader for a few years now, obtaining work from 2 agencies and occasionally a local haulier. When I put my tax bill in my accountant claims for my car and fuel costs to commute, work clothes and equipment for the job eg. Gloves , hi viz etc my accountant seems to think everything is ok but I have been told by one agency i should go ltd and i have also been told by 2 other drivers I have to go ltd.
Am I legal as I stand now being a sole trader?
Thanks for any advice
Not sure how it works m8
Am thinking of going self employed as refuse to pay employers NI contributions through umbrella company and will not work for any agency offering umbrella pay
Going sole trader you still need to pay NI and make payments to hmrc 2 times per year
Go see an accountant to get the best advise rather than on here
alix776:
Going sole trader you still need to pay NI and make payments to hmrc 2 times per year
Go see an accountant to get the best advise rather than on here
Yes, ask an expert. Itll cost a little, but will save money in the long run. An independent, not an expert/advisor supplied by an employer/agency. The posts on here should give you an idea of the questions to ask, but arent the answers themselves.
Usually the first 30 mins or first appointment will be free don’t sign up with anyone at the first appointment but take notes go home digest the information that has been provided and then make a decision
alix776:
Going sole trader you still need to pay NI and make payments to hmrc 2 times per year
Go see an accountant to get the best advise rather than on here
Of course but at least you only have to pay you’re own
Through Umbrella company you also need to pay their NI contribution for them! Rip off!
Helo
This is my first post since signing up to these forums.
Have tried to do as much free research as possible on either going LTD or PAYE. But in all honesty im still a little confused as the best option to take in the future.
To give a little background in the next few months its my intention to get through my class 2 and class 1 tests and every thing that goes with this. Ive worked in retail for 20 years and have always wanted to drive. im now in a position where i can financially afford to put myself through my test.
I want to make the best decision when i start out so any advice would be much appreciated.
Also as a side note sheould i go PAYE as i get some experience through agency and then switch or should i go straight into LTD?
Thanks
DDT1391:
Helo
This is my first post since signing up to these forums.
Have tried to do as much free research as possible on either going LTD or PAYE. But in all honesty im still a little confused as the best option to take in the future.
To give a little background in the next few months its my intention to get through my class 2 and class 1 tests and every thing that goes with this. Ive worked in retail for 20 years and have always wanted to drive. im now in a position where i can financially afford to put myself through my test.
I want to make the best decision when i start out so any advice would be much appreciated.
Also as a side note sheould i go PAYE as i get some experience through agency and then switch or should i go straight into LTD?
Thanks
Ltd. And paye are two different ways agency’s pay drivers. Paye is like being a regular employeee it’s how you’re probably paid in your current job. However some agency’s as I understand it set you up as the boss of your own Ltd. Company and contract you through that. It’s a bit of a fiddle and something HMRC might be cracking down on.
Personally as a new pass I’m trying to find work direct with an employer and avoid agency work. If I was to go agency i would want to be on paye.
Sent from my SM-G950F using Tapatalk
IronEddie:
DDT1391:
Helo
This is my first post since signing up to these forums.
Have tried to do as much free research as possible on either going LTD or PAYE. But in all honesty im still a little confused as the best option to take in the future.
To give a little background in the next few months its my intention to get through my class 2 and class 1 tests and every thing that goes with this. Ive worked in retail for 20 years and have always wanted to drive. im now in a position where i can financially afford to put myself through my test.
I want to make the best decision when i start out so any advice would be much appreciated.
Also as a side note sheould i go PAYE as i get some experience through agency and then switch or should i go straight into LTD?
Thanks
Ltd. And paye are two different ways agency’s pay drivers. Paye is like being a regular employeee it’s how you’re probably paid in your current job. However some agency’s as I understand it set you up as the boss of your own Ltd. Company and contract you through that. It’s a bit of a fiddle and something HMRC might be cracking down on.
Personally as a new pass I’m trying to find work direct with an employer and avoid agency work. If I was to go agency i would want to be on paye.
Sent from my SM-G950F using Tapatalk
Cheers for the advice how are you getting on going direct had any luck?
How much work are you getting if you dont mind me asking
DDT1391:
IronEddie:
DDT1391:
Helo
This is my first post since signing up to these forums.
Have tried to do as much free research as possible on either going LTD or PAYE. But in all honesty im still a little confused as the best option to take in the future.
To give a little background in the next few months its my intention to get through my class 2 and class 1 tests and every thing that goes with this. Ive worked in retail for 20 years and have always wanted to drive. im now in a position where i can financially afford to put myself through my test.
I want to make the best decision when i start out so any advice would be much appreciated.
Also as a side note sheould i go PAYE as i get some experience through agency and then switch or should i go straight into LTD?
Thanks
Ltd. And paye are two different ways agency’s pay drivers. Paye is like being a regular employeee it’s how you’re probably paid in your current job. However some agency’s as I understand it set you up as the boss of your own Ltd. Company and contract you through that. It’s a bit of a fiddle and something HMRC might be cracking down on.
Personally as a new pass I’m trying to find work direct with an employer and avoid agency work. If I was to go agency i would want to be on paye.
Sent from my SM-G950F using Tapatalk
Cheers for the advice how are you getting on going direct had any luck?
How much work are you getting if you dont mind me asking
Well I only passed cat C three weeks ago. All me various cards arrived last week. And I’ve applied for two jobs thus far over the weekend. One called me today and I’ve got an interview set up for Friday. So potentially I’ll be in a permanent driving job a month after I passed. Which don’t seem bad at all.
I guess in some ways I’m fortunate in that I have a job (Not driving) but it takes a bit of pressure off me in terms of changing career and finding a driving job.
Sent from my SM-G950F using Tapatalk
IronEddie:
DDT1391:
IronEddie:
DDT1391:
Helo
This is my first post since signing up to these forums.
Have tried to do as much free research as possible on either going LTD or PAYE. But in all honesty im still a little confused as the best option to take in the future.
To give a little background in the next few months its my intention to get through my class 2 and class 1 tests and every thing that goes with this. Ive worked in retail for 20 years and have always wanted to drive. im now in a position where i can financially afford to put myself through my test.
I want to make the best decision when i start out so any advice would be much appreciated.
Also as a side note sheould i go PAYE as i get some experience through agency and then switch or should i go straight into LTD?
Thanks
Ltd. And paye are two different ways agency’s pay drivers. Paye is like being a regular employeee it’s how you’re probably paid in your current job. However some agency’s as I understand it set you up as the boss of your own Ltd. Company and contract you through that. It’s a bit of a fiddle and something HMRC might be cracking down on.
Personally as a new pass I’m trying to find work direct with an employer and avoid agency work. If I was to go agency i would want to be on paye.
Sent from my SM-G950F using Tapatalk
Cheers for the advice how are you getting on going direct had any luck?
How much work are you getting if you dont mind me asking
Well I only passed cat C three weeks ago. All me various cards arrived last week. And I’ve applied for two jobs thus far over the weekend. One called me today and I’ve got an interview set up for Friday. So potentially I’ll be in a permanent driving job a month after I passed. Which don’t seem bad at all.
I guess in some ways I’m fortunate in that I have a job (Not driving) but it takes a bit of pressure off me in terms of changing career and finding a driving job.
Sent from my SM-G950F using Tapatalk
Yeah its always better to have a job when looking for a new one, just adds pressure. I earn decent money in my current job but after 20 years in retail ive had enough. Well the wrong side of retail as i see it now!
DDT1391:
Helo
This is my first post since signing up to these forums.
Have tried to do as much free research as possible on either going LTD or PAYE. But in all honesty im still a little confused as the best option to take in the future.
To give a little background in the next few months its my intention to get through my class 2 and class 1 tests and every thing that goes with this. Ive worked in retail for 20 years and have always wanted to drive. im now in a position where i can financially afford to put myself through my test.
I want to make the best decision when i start out so any advice would be much appreciated.
Also as a side note sheould i go PAYE as i get some experience through agency and then switch or should i go straight into LTD?
Thanks
IronEddie:
Ltd. And paye are two different ways agency’s pay drivers. Paye is like being a regular employeee it’s how you’re probably paid in your current job. However some agency’s as I understand it set you up as the boss of your own Ltd. Company and contract you through that. It’s a bit of a fiddle and something HMRC might be cracking down on.
Personally as a new pass I’m trying to find work direct with an employer and avoid agency work. If I was to go agency i would want to be on paye.
Sent from my SM-G950F using Tapatalk
DDT1391:
Cheers for the advice how are you getting on going direct had any luck?
How much work are you getting if you dont mind me asking
IronEddie:
Well I only passed cat C three weeks ago. All me various cards arrived last week. And I’ve applied for two jobs thus far over the weekend. One called me today and I’ve got an interview set up for Friday. So potentially I’ll be in a permanent driving job a month after I passed. Which don’t seem bad at all.
I guess in some ways I’m fortunate in that I have a job (Not driving) but it takes a bit of pressure off me in terms of changing career and finding a driving job.
Sent from my SM-G950F using Tapatalk
DDT1391:
Yeah its always better to have a job when looking for a new one, just adds pressure. I earn decent money in my current job but after 20 years in retail ive had enough. Well the wrong side of retail as i see it now!
I do catering for a concession inside a department store. Crap money and the jobs not what it was.
Sent from my SM-G950F using Tapatalk
To DDT
As many say on this forum, you’re only self employed if you own your own wagon.
The whole Ltd. Company thing attracts people because you get higher rates and apparently claim tax back, but the HMRC is cracking down on it, because they argue the same point as described above > you’re depending on the agency to get work and there for HMRC says your a normal employ and can’t use all the benefits of being self employed.
I would start as PAYE and stay PAYE even if I could earn £1 more per hour. The difference is not work the hassle.
Ps:
You will also find that some agencies push you to set your own Ltd. company up while other say it’s your choice.
Tipperdipper1:
To DDT
As many say on this forum, you’re only self employed if you own your own wagon.
The whole Ltd. Company thing attracts people because you get higher rates and apparently claim tax back, but the HMRC is cracking down on it, because they argue the same point as described above > you’re depending on the agency to get work and there for HMRC says your a normal employ and can’t use all the benefits of being self employed.
I would start as PAYE and stay PAYE even if I could earn £1 more per hour. The difference is not work the hassle.
Ps:
You will also find that some agencies push you to set your own Ltd. company up while other say it’s your choice.
thanks for the advice i still have an open mind im going to book in with an accountant to clarify where i would stand
DDT1391:
Helo
This is my first post since signing up to these forums.
Have tried to do as much free research as possible on either going LTD or PAYE. But in all honesty im still a little confused as the best option to take in the future.
To give a little background in the next few months its my intention to get through my class 2 and class 1 tests and every thing that goes with this. Ive worked in retail for 20 years and have always wanted to drive. im now in a position where i can financially afford to put myself through my test.
I want to make the best decision when i start out so any advice would be much appreciated.
Also as a side note sheould i go PAYE as i get some experience through agency and then switch or should i go straight into LTD?
Thanks
What I did was set up a ltd company, put some money from my personal account into the company as a loan.
Paid for all my cost for the licences through the ltd company bank account…so approx in total £4k…thats theory, medical, test and cpc. When I started working and invoicing I pulled that money back out so saving at least 20% on tax.
I claim for all mileage to the different sites I go to and there are various allowances that are accepted which the accountant should be savvy to. I have heard typical accountant costs to be between £50 to £100 a month. I am quite lucky as mine is a nephew of a close friend and pay him £450 for the whole year (I originally registered for VAT but was a waste of time as very little VAT expenses)