nsmith1180:
27k PAYE works out at £103.83 a day, on which you will pay tax and NI and Pension. At that PAYE rate and £120 a day Ltd.Co. the driver is £2.68 a day better off gross than the PAYE bloke or £696.80 a year assuming no extra days are worked overtime.
A PAYE driver will take home £21,423.68 if auto-enrolled at 1% into a pension.
The Ltd Co driver can pay himself £16,099.68 without paying a penny in Income Tax, (Will pay £400.32 in NI though) 260 days x 120 a day = £31,200 a year so £15,100 left to get out, guesstimating here 35% total deductions, (depends on your tax code etc,) means say another £10k into the drivers sky-rocket. Ltd Co takes home £26,099.68 and is £4,676 a year better off.
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Very nice. Now where in your calculations is the holiday pay that you don’t get? That is worth an additional 12.7%.
How do you get to £400 NI? No mention of employers NI. What about workplace pension or are you not bothering with that like you’re not getting paid holidays either?
Have you taken into account the new dividend tax rates? Where is your calculation for dividends or do you intend to leave the money in the Ltd Company forever?
Gross holiday pay on 27k a year is £2,907.69 so we knock that off our £4,676 better off: we are £1,768.31 better off.
Penson, on 27k a year the employee pays in £270 and so does the company so lets say sod it and double that and put £1,080 into a private pension instead. Im still £688.31 better off than the PAYE bloke, and will have twice as much money in retirement.
As for leaving the money in the company, for the past two and a half years I have, which is why I now have a brand new unit with my stickers on the side, a trailer I own outright and very few debts.
As to your new post connor:
NI is due on all income over £133 a week which is why NI has been accounted for.
Dividend allowance is being cut next year, but at the moment all I have said is true. I can’t let you know the numbers for next year until the accountant lets me know 'em!
nsmith1180:
£11500, tax personal allowance + £5k dividend allowance - National insurance gets you to £16k with no income tax.
Sent from my F8331 using Tapatalk
May be I wrong but first go tax free 11000 personal allowance plus tax free all e penises.After they count corporation tax.And dividend tax go from profit after tax with some 5000 tax free.If drivers had total income 30000.11000 personal plus all rest of legal exp.exmply 4 .30000 minus 15000 =15000 gross profit. corporation tax 20 percent and left just 12000 .and after go dividend tax .
bigtwister:
What day rate would you expect for 9-10 day
Thanks in advance
Depends on what it is, where you are and what you do.
There is no fixed rate.
On average you need to be earning no less than 15 per hour - otherwise you might as well have a job with all the PAYE, NI taken care of - plus pension and holiday pay.
To do it right… you will need to pay for a Chartered Accountant - otherwise - you will end up in the deep stuff.
The best advice you will ever get is to: go see an accountant before setting your fees.
Stanley Knife:
One piece of advice they did give was always to make sure I paid some tax and NI on my earnings. That keeps us happy and leaves you alone. I’ve never had a problem since.
That didn’t work for those who were using Think Accounting. My mate got a bill from HMRC for £3,000 and I know the record posted on here is £15,000.
You can do what you want but once HMRC decide the way you work doesn’t qualify for self employment then you’re in for a world of hurt.
Stanley Knife:
One piece of advice they did give was always to make sure I paid some tax and NI on my earnings. That keeps us happy and leaves you alone. I’ve never had a problem since.
That didn’t work for those who were using Think Accounting. My mate got a bill from HMRC for £3,000 and I know the record posted on here is £15,000.
You can do what you want but once HMRC decide the way you work doesn’t qualify for self employment then you’re in for a world of hurt.
My understanding is that drivers with Think Accounting didn’t end up owning large amounts of tax becasue HMRC changed their view of what qualified as self employed, but because Think Accounting had kept the money the drivers thought they’d paid in tax, basically they gave their money to a bunch of crooks.
muckles:
My understanding is that drivers with Think Accounting didn’t end up owning large amounts of tax becasue HMRC changed their view of what qualified as self employed, but because Think Accounting had kept the money the drivers thought they’d paid in tax.
Nope. HMRC decided that Think Accounting was a MSC and therefore none of the drivers qualified as being self employed.
HMRC have stated that their default view is that unless you own the truck you can’t be a self employed driver because in almost all cases you don’t meet the requirements.
muckles:
My understanding is that drivers with Think Accounting didn’t end up owning large amounts of tax becasue HMRC changed their view of what qualified as self employed, but because Think Accounting had kept the money the drivers thought they’d paid in tax.
Nope. HMRC decided that Think Accounting was a MSC and therefore none of the drivers qualified as being self employed.
HMRC have stated that their default view is that unless you own the truck you can’t be a self employed driver because in almost all cases you don’t meet the requirements.
So the reports they hadn’t actually paid HMRC the money they’d taken from the drivers as tax and NI is untrue?
So Conor, since when did HMRC decide that Think Accounting were a MSC. HMRC have decided that Think Accounting were a MSC PROVIDER and involved in the Driver’s company. HMRC have decided that the Driver’s company is a MSC, ie a Managed Service Company.
A cabbage picker could have set up his own Ltd company and he too would have had HMRC onto him if he had used Think Accounting because HMRC would deem that Think Accounting, as a MSC PROVIDER, would have been involved in the cabbage pickers company, therefore making his employment status as PAYE and owing more NI/Tax than he would have paid as a Ltd company.
MSC has nothing to do with self employment, the Drivers sell their services via their Ltd company, they are not self employed and therfore do not need to own a truck.
Think Accounting defrauded Drivers out of shed loads of money by not paying over the Driver’s liabilities to HMRC. The Inside Out programme was bang on and showed Think Accounting to be what they are, in many peoples minds…Crooks, that is why the authorities are on their case.
Stanley Knife:
One piece of advice they did give was always to make sure I paid some tax and NI on my earnings. That keeps us happy and leaves you alone. I’ve never had a problem since.
You can do what you want but once HMRC decide the way you work doesn’t qualify for self employment then you’re in for a world of hurt.
You do have an unerring ability to read into a post only what you want to see. I was never self employed, never had any interaction with HMRC/VAT after their visit, never used the services of any accountant for the first eight years, never mind Think Accounting, and have never had any problems regarding my accounts or paying my dues.
The accountant I use now on my non-driving business is as satisfied with the state of the books from the previous eight years as the ones I present to him now.
robbo99.:
So Conor, since when did HMRC decide that Think Accounting were a MSC. HMRC have decided that Think Accounting were a MSC PROVIDER and involved in the Driver’s company. HMRC have decided that the Driver’s company is a MSC, ie a Managed Service Company.
A cabbage picker could have set up his own Ltd company and he too would have had HMRC onto him if he had used Think Accounting because HMRC would deem that Think Accounting, as a MSC PROVIDER, would have been involved in the cabbage pickers company, therefore making his employment status as PAYE and owing more NI/Tax than he would have paid as a Ltd company.
MSC has nothing to do with self employment, the Drivers sell their services via their Ltd company, they are not self employed and therfore do not need to own a truck.
Think Accounting defrauded Drivers out of shed loads of money by not paying over the Driver’s liabilities to HMRC. The Inside Out programme was bang on and showed Think Accounting to be what they are, in many peoples minds…Crooks, that is why the authorities are on their case.
robbo99.:
Where are you Conor? I can’t wait for your reply!
Earning money driving for a decent firm for an agency that isn’t on the fiddle on PAYE at a decent rate for even S/E where I live.
Only going on what my friend who was caught up in it and has been sent a bill from HMRC has said. Not quite first hand but nearer than an article on the BBC. Remember that Inside Out is brought to you by the same network that is claiming this week we’re on £20 an hour and there is a secret reserved bank of 56,000 drivers.
nsmith1180:
£11500, tax personal allowance + £5k dividend allowance - National insurance gets you to £16k with no income tax.
Sent from my F8331 using Tapatalk
May be I wrong but first go tax free 11000 personal allowance plus tax free all e penises.After they count corporation tax.And dividend tax go from profit after tax with some 5000 tax free.If drivers had total income 30000.11000 personal plus all rest of legal exp.exmply 4 .30000 minus 15000 =15000 gross profit. corporation tax 20 percent and left just 12000 .and after go dividend tax .
Tax free penises? That’ll make dipper dave’s week.
nsmith1180:
I’m glad you are happy with your situation but its all set up in the operators favor.
In one year there are as we know 365 days, or on a traditional Monday to Friday job, 52.14 working periods of which you as a driver get 5.6 weeks holiday.
4 on 4 off the vehicle can be worked for 91.25 periods. Now 4 on 4 off is technically a job share, which means that legally you are only entitled to a pro-rata holiday allowance. 4 on 4 off gives each driver 45.62 workable periods in a year or 87% of a full timer’s working time so the employer can get away with giving you 4.87 weeks holiday a year.
Of course because you are working fewer days, the average over the reference period is lower. Based on 27k a year, which the smart operator will express as a day rate rather than an annual salary, your holiday pay for a week off is £64.75 lower than the five day week bloke next to you.
A normal 5 day week for a tramping wagon means that an operator gets 10 earning days a fortnight with 8 paid nights out. Four on Four off gets you 14 earning days a fortnight with either 11 or 12 paid nights out. So every other cycle he saves a night out payment.
The operator is paying £44,438.75 to staff his 4 on 4 off compared to £31,980 to staff his 5 dayer, both figures including nights out.
A 5 day week wagon will work 260 days in a year and in that time, assuming £500 a day will bring in £130,000.
A 4 on 4 off wagon can work 364 days in the same year and with the same assumptions will bring in £182,000.
A £52,000 increase in turnover for a £12,458.75 increase in cost. Or to put it a different way, a 28% increase in turnover for a 16% increase in standing costs.
^^^^^^^^^^^^^^^^^^^^^
The maker of a good business model canvas…
But a 4-on-4-off man who regularly covers weekends, is not generally going to work for the same hourly rate as a Monday-Friday man, is he?
robbo99.:
Where are you Conor? I can’t wait for your reply!
Earning money driving for a decent firm for an agency that isn’t on the fiddle on PAYE at a decent rate for even S/E where I live.
Only going on what my friend who was caught up in it and has been sent a bill from HMRC has said. Not quite first hand but nearer than an article on the BBC. Remember that Inside Out is brought to you by the same network that is claiming this week we’re on £20 an hour and there is a secret reserved bank of 56,000 drivers.
So the decent firm you drive for will be the one which has just been fined £1.2 million for serious breaches of H&S?
The inside out programme talked to real Drivers affected by Think Accounting’s scam, the report of £20 per hour and banking thousands of Drivers was made by an agency, usual lies and exaggerations, not the BBC’s propaganda.
polamaniec:
Ltd is always better as you are getting the whole gross pay into your account. Whatever gross you are getting as paye (check your payslip) you will see it in your bank account. You will need to pay tax on that but not like 150 pounds a week as it is the case with paye. Much less than that. And at the end of the year. Up until then it’s your extra money to spend.
I’ve operated through LTD a few times admittedly not in Transport, I was always told if your not earning £160 a day it’s not worth it due to the cost incurred, YES you can claim things against tax but your accountant will let you know what is claimable, in then he wants his fee usually about a grand a year ! And when he has hit you with that stand by the corporation tax bill from HMRC ( they take no prisoners them guys) then you have your self assessment to do hopefully your account will have included that in his bill if not stump up ! Companies House nearly forgot about them and the legalities of submitting all those forms ( and fines for late submission) oh then you have to chase payment off your punters ( fingers crossed none go bump that owe you a wedge) Ir35 ? Heard of that it’s law in the public sector and coming to the private sector real soon. ! 20 yrs on and off I have used LTD I have none running at the moment all legally and lawfully closed down dues paid and sometimes that’s a relief in its self. So just to make a statement about “ Its your money to spend” Is not really true it’s not your money it’s your companies, and with that comes legal obligations ! PAYE for me these days thankyou [emoji4]
nsmith1180:
£11500, tax personal allowance + £5k dividend allowance - National insurance gets you to £16k with no income tax.
Sent from my F8331 using Tapatalk
May be I wrong but first go tax free 11000 personal allowance plus tax free all e penises.After they count corporation tax.And dividend tax go from profit after tax with some 5000 tax free.If drivers had total income 30000.11000 personal plus all rest of legal exp.exmply 4 .30000 minus 15000 =15000 gross profit. corporation tax 20 percent and left just 12000 .and after go dividend tax .
Tax free penises? That’ll make dipper dave’s week.
