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There is much talk about the benefits of “going self-employed” and
fancy schemes with umbrellas and the like . . .
. . . But does the Agency benefit from a self-employed Driver ?
. . . Can someone check the facts and figures ?
I’m thinking that a self-employed Driver gets an extra pound an hour.
The extra cost to the Agency would be say, 50 hours a week over
46 weeks (our man takes 6 weeks holiday) that’s 50 X 46 = £ 2300 p.a.
Am I right in thinking that the Agency saves on Holiday Pay and
Employers National Insurance Contributions ?
Holiday Pay for Pay As You Earn
Let’s skank the Driver and pay him just £ 8 X 8 hours X 28 days = £ 1792 pa
Employer’s NI Contributions for Pay As You Earn
Our man earns £ 500 pw X 46 weeks + £ 1792 Holiday Pay = £ 24792 pa
Call it £ 476 pw average gross over 52 weeks.
I believe that employers pay 12% on earnings above £ 149 pw but I’m
not too sure about that. If so, that would cost the Agency £ 2040.
So, the Agency appears to have given our self-employed man an extra
£ 2300 pa and saved themselves £ 3832 (£ 1792 + £ 2040)
I did self employed via agency for about 6 weeks (only left because was offered a full time job and having a young family I wanted the security) I was better off financially on self employed, about £80pw in my bank and any gear I wanted was put through expenses and that was on class 2, I bet it would have been about £120pw class 1. There are MASSIVE tax benefits to being on self employed agency, you want a snooper sat nav? Charge it to the company’s tax, want a new lap top? Claim for that too, 45p per mile to work? £10 per day meal allowance the list is endless (almost) .
If I were ever without full time work I would be back on it, there are many at my place that have been on it for years and refuse to go full time as they get 5/6 days a week every week.
As far as I’m aware both the travelling tax allowance and the meal allowance are exactly the same whether self employed or PAYE, the only difference is that as PAYE you have to wait until the end of the tax year to make the claim.
I’m sure someone will correct me if that’s wrong, but I don’t think it is
I understand that you get mileage and meal allowances when PAYE agency, but if Self-Employed agency, you can claim for “anything necessary to do your job” as well, and offset it against your gross pay so you pay less tax. Limited Company Sole Trader is probably the best way to be Self-Employed, as you don’t have to join the Umbrella to pick up the contract work.
Umbrella is really there for those PAYE people who want to have a go at the self-employed contractor work, but can’t be arsed to set themselves up at companies house.
£27 per pay slip is bloody expensive if you only do 1-3 days a week like me, so I won’t touch it personally, but other guys and gals that want to do 40+ hours every week without fail at a decent hourly rate might think differently.
I remember thinking the other day that I’d happily pay the £27 to get work like xjrv8’s post on page 2 of this thread…
over £16ph right through AND up north as well! Can’t be bad!
NewLad:
There are MASSIVE tax benefits to being on self employed agency, you want a snooper sat nav? Charge it to the company’s tax, want a new lap top? Claim for that too,
Don’t forget that when you sell those things you’ve bought through the company you have to put the money you get as income.
NewLad:
There are MASSIVE tax benefits to being on self employed agency, you want a snooper sat nav? Charge it to the company’s tax, want a new lap top? Claim for that too,
Don’t forget that when you sell those things you’ve bought through the company you have to put the money you get as income.
But under £500 each they can be written off in 1 year if memory serves me right. Or written down over a few yrs if over.
Winseer:
Umbrella is really there for those PAYE people who want to have a go at the self-employed contractor work, but can’t be arsed to set themselves up at companies house.
NewLad:
I don’t need proof, good on you if it’s true but if I was on those rates I wouldn’t be telling anyone.
Doesn’t matter as even after posting his payslip people didn’t believe him. Those that did went quiet after calling him a liar.
Back on thread - when I was self-employed I had an accountant wanted £100 per tax return and saved me loads with claims I could never think of myself. Got to be cheaper than £27 per week for an umbrella.
Dieseldoforme:
I’m thinking that a self-employed Driver gets an extra pound an hour.
Yep, seen the “extra quid an hour on ltd” advert quite a few times. And it’s a con. I’m from an engineering background and did LTD and Umbrella for about 8 years. Both paid one quarter more than PAYE.
If an agency is offering £9 PAYE and £10 LTD they’re robbing you of £1.25 PER HOUR.
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I appreciate that there are quite a few benefits from being self
employed and they have been covered quite a lot on these boards.
But those benefits are NOT paid for by the Agency, like the extra
£1 an hour in lieu of Holiday Pay.
I’m trying to work out what the Agencies are making from their savings on
Holiday Pay and National Insurance and if they could afford to pay more
than the £1 an hour or maybe £1 is fair compensation for no Holiday Pay.
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Of course they can pay more. Like I said, I was on Umbrella and LTD for around 8 years and always got a quarter on top. Any less and you’re being robbed.
I’m trying to work out what the Agencies are making from their savings on
Holiday Pay and National Insurance and if they could afford to pay more
than the £1 an hour or maybe £1 is fair compensation for no Holiday Pay.
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I’ve not looked into it but if they are self employed then I assume they aren’t covered by the AWR.
Is this a sneaky way for an agency to keep client costs down so they keep customers over agencies that are charging higher rates to cover the AWR rates.
Or they they are charging the client more saying its due to AWR but its only cost them £1 ph more instead of paying parity pay (and there’s also not having to pay for additional administration staff for working out holidays PAYE NI payments ETC.
over £16ph right through AND up north as well! Can’t be bad!
That’s if he isn’t talking out his arse
I am not, what other proof would you like?
That payslip looked genuine enough to me - the font was right, and everything. It’s a shame you didn’t show the deductions on there as well, but I’m guessing there would have been too much personal info on there if you had, and no one wants to be posting nickable-id info online in this day and age.
It would be possible for a “consultant” at said agency to fake such a payslip, but I don’t believe this to be the case, as said consultant would be inundated with sigh-ups all chasing the £16ph, and would therefore represent a rod for any faker’s own back.
This is all about PARITY PAY - and yes, it does surprise a few people when they see what good things can happen to your one’s hourly rate after being consigned to the same depot for more than 13 weeks… Royal Mail are one of the few firms that don’t try and side-step the 13 week parity pay rule…
