Harry Monk:
good_friend:
At least 3 agencies (and perhaps more) around here only offer ‘umbrella’ crooks or going LTD if you want to work for a particular firmThis on its own is deeply suspicious. PAYE is not difficult to set up, why would any legitimate agency refuse to employ a driver on PAYE?
Im not too up on Uk law/HMRC regs anymore but would it possibly be pension contributions/holiday pay rights?
Harry Monk:
good_friend:
At least 3 agencies (and perhaps more) around here only offer ‘umbrella’ crooks or going LTD if you want to work for a particular firmThis on its own is deeply suspicious. PAYE is not difficult to set up, why would any legitimate agency refuse to employ a driver on PAYE?
Because they don’t have to pay their employees holiday pay, tax or NI contributions.
Roymondo:
Harry Monk:
Agree with this. I do agency work on a PAYE basis, when I started my own limited company was still active from my owner-driver days so I could have worked on a limited company basis for £2 an hour more but when I did the maths it just wasn’t worth it. Possibly in my case it’s slightly different in that I can claim back all of the income tax I pay when the tax year ends but I figure I’d have to work a hell of a lot of hours to make limited company worthwhile.I roughed out some figures, assuming 50 hours a week, every week.
Under PAYE (£10 per hour, paid over 52 weeks, as under current legislation you’d be entitled to holiday pay):
Gross pay £31,200
Tax (£3,940)
NI (£2,764)
Net pay £24,496Running as a Ltd Co at £12 per hour, paid over 48 weeks (i.e. no holiday pay)
Company income £34,560
Salary (£11,500)
Employer NI (£445)
Accountant fees (£500)Profit before tax £22,115
Corporation Tax @20% (£4,423)
Profit after tax £17,692Assuming all profits paid as dividend, your total income from the company would be £17,692 + £11,500 = £29.192. There would also be a £400 employee NI deduction, so net figure of around £28,800
I’ve probably missed something along the way, but that’s pretty much the bare bones of it.
Yeah that helps mate cheers.
But not sure how you have worked out your gross pay as 10x50 = 500 x 52 =26000■■
Damo_hall:
the nodding donkey:
Damo_hall:
Damo_hall:
Yeah he’s got a disruptive side when he’s hiding behind his computer.Bet he’s a little b***h in person!
They always out themselves in the end.
Well, all I can say, is ‘good luck’. But with your attitude, and if you can’t find an agency that won’t pay PAYE, or a full time job, you might struggle.
My attitude? LMAO
What a hypocrite!
I’ve been in full time work but I get bored! I like the fact that I get sent to different places doing different kinds of work!
And don’t forget you like to go to Thailand in January and February.
Damo_hall:
But there is a lot of tax you can save running through a LTD company over Paye so it seems… I would be paying myself a basic wage then taking the rest out As dividends which is 7.5% after 5000 pound.If i am wrong someone fill me in…
Your biggest expense is travel to work which is now disallowed in most cases. The dividend tax is 20% and will be after £2000 come April. So yes you get to save currently £1000 on income tax if you’re paid out as dividends, soon to drop to £400 but based on a £600 a week gross someone on PAYE gets an additional £3400 in holiday pay and soon £1800 in employers workplace pension contributions.
Roymondo:
Harry Monk:
Agree with this. I do agency work on a PAYE basis, when I started my own limited company was still active from my owner-driver days so I could have worked on a limited company basis for £2 an hour more but when I did the maths it just wasn’t worth it. Possibly in my case it’s slightly different in that I can claim back all of the income tax I pay when the tax year ends but I figure I’d have to work a hell of a lot of hours to make limited company worthwhile.I roughed out some figures, assuming 50 hours a week, every week.
Under PAYE (£10 per hour, paid over 52 weeks, as under current legislation you’d be entitled to holiday pay):
Gross pay £31,200
Tax (£3,940)
NI (£2,764)
Net pay £24,496Running as a Ltd Co at £12 per hour, paid over 48 weeks (i.e. no holiday pay)
Company income £34,560
Salary (£11,500)
Employer NI (£445)
Accountant fees (£500)Profit before tax £22,115
Corporation Tax @20% (£4,423)
Profit after tax £17,692Assuming all profits paid as dividend, your total income from the company would be £17,692 + £11,500 = £29.192. There would also be a £400 employee NI deduction, so net figure of around £28,800
I’ve probably missed something along the way, but that’s pretty much the bare bones of it.
Yes you’ve missed the fact that you get 5.6 weeks paid holiday not 4 weeks so the self employed would have to be over 46.4 weeks, not 48. You’ve also missed out the workplace pension contributions, currently 1-3%, soon to be 3% for all which would add just over £1000 to the PAYE not taking into account the reduction in income tax due to employee pension contributions. You would also have to reduce the self employed gross by £960.
That brings the difference down to a couple of grand, £40 a week, and for that you get to sign away all your employment rights, the right to be paid on time or even paid at all.
This is probably the main reason why I prefer to work PAYE…
More than 1,000 lorry drivers have been left owing large sums of tax after claims the accounting company they used disappeared with the money.
They say they were encouraged by agencies to set up as limited companies and use the services of the now-defunct Lincoln-based firm Think Accounting.
An HMRC inquiry is under way after drivers were hit with unpaid tax bills.
Company owners Lee Wilson and Symon Williams Cooke did not respond to BBC requests for a comment.
It is alleged the pair, who were not qualified accountants, worked with HGV driving agencies, paying agency staff commission if they encouraged the drivers to set up as limited companies with Think Accounting.These limited companies and the tax they were liable for were administered by the firm on the drivers’ behalf.
Drivers were given a small weekly wage plus expenses and dividends and say they believed the firm was paying the correct level of tax owed.
One of the affected drivers, Ian Hannon, said he received a tax bill for £11,500 after dealings with the company.
“My national insurance, my corporation tax, my VAT - Think Accounting had not forwarded anything on to the relevant parties to the tune of £11,500.”
^^^^^. I was with them Harry. £20k+ demand from HMRC. Of course demanding and receiving are two different things. Lots of my workmates did however get loans/remortgaged etc and paid up.
rather than start a seperate topic, but if you go ltd, what happens if you then go to work for one single employer full time instead of agency style multiple employers, surely under all the classification rules about what constitutes being self employeed and what doesn’t, you’d be classed as one of their employees?
nurglets:
rather than start a seperate topic, but if you go ltd, what happens if you then go to work for one single employer full time instead of agency style multiple employers, surely under all the classification rules about what constitutes being self employeed and what doesn’t, you’d be classed as one of their employees?
My thinking as well. Didnt your income have to be from more than one source to be classed as self employed? Maybe the rules in the UK have changed over the years??
If you go as ltd though you would then be classed as an employee of that ltd company so the self employed ruling re source of income wouldnt apply. Thats how it used to be anyway.
I run my own ltd company (SL in Spain) and the rules are slightly different with plenty of grey areas for extra complication thrown in 
Conor:
Roymondo:
Harry Monk:
Agree with this. I do agency work on a PAYE basis, when I started my own limited company was still active from my owner-driver days so I could have worked on a limited company basis for £2 an hour more but when I did the maths it just wasn’t worth it. Possibly in my case it’s slightly different in that I can claim back all of the income tax I pay when the tax year ends but I figure I’d have to work a hell of a lot of hours to make limited company worthwhile.I roughed out some figures, assuming 50 hours a week, every week.
Under PAYE (£10 per hour, paid over 52 weeks, as under current legislation you’d be entitled to holiday pay):
Gross pay £31,200
Tax (£3,940)
NI (£2,764)
Net pay £24,496Running as a Ltd Co at £12 per hour, paid over 48 weeks (i.e. no holiday pay)
Company income £34,560
Salary (£11,500)
Employer NI (£445)
Accountant fees (£500)Profit before tax £22,115
Corporation Tax @20% (£4,423)
Profit after tax £17,692Assuming all profits paid as dividend, your total income from the company would be £17,692 + £11,500 = £29.192. There would also be a £400 employee NI deduction, so net figure of around £28,800
I’ve probably missed something along the way, but that’s pretty much the bare bones of it.
Yes you’ve missed the fact that you get 5.6 weeks paid holiday not 4 weeks so the self employed would have to be over 46.4 weeks, not 48. You’ve also missed out the workplace pension contributions, currently 1-3%, soon to be 3% for all which would add just over £1000 to the PAYE not taking into account the reduction in income tax due to employee pension contributions. You would also have to reduce the self employed gross by £960.
That brings the difference down to a couple of grand, £40 a week, and for that you get to sign away all your employment rights, the right to be paid on time or even paid at all.
And sick pay.
And guaranteed work. If I’m quiet and have no work, my lads get paid at least their 8 hours a day. Goes quiet on limited and you get diddly squat.
And as I keep pointing out, you are not self-employed as a driver unless you own a vehicle - that is HMRCs position, the RHA & FTAs position and Backhouse Jones transport solicitor’s position. Over three conference type things I’ve gone to, that position has not changed.
And really, do you think that an agency or whomever is asking you to go Ltd/self-employed because it’s better for you or better for them… 
Damo_hall:
Roymondo:
Harry Monk:
Agree with this. I do agency work on a PAYE basis, when I started my own limited company was still active from my owner-driver days so I could have worked on a limited company basis for £2 an hour more but when I did the maths it just wasn’t worth it. Possibly in my case it’s slightly different in that I can claim back all of the income tax I pay when the tax year ends but I figure I’d have to work a hell of a lot of hours to make limited company worthwhile.I roughed out some figures, assuming 50 hours a week, every week.
Under PAYE (£10 per hour, paid over 52 weeks, as under current legislation you’d be entitled to holiday pay):
Gross pay £31,200
Tax (£3,940)
NI (£2,764)
Net pay £24,496Running as a Ltd Co at £12 per hour, paid over 48 weeks (i.e. no holiday pay)
Company income £34,560
Salary (£11,500)
Employer NI (£445)
Accountant fees (£500)Profit before tax £22,115
Corporation Tax @20% (£4,423)
Profit after tax £17,692Assuming all profits paid as dividend, your total income from the company would be £17,692 + £11,500 = £29.192. There would also be a £400 employee NI deduction, so net figure of around £28,800
I’ve probably missed something along the way, but that’s pretty much the bare bones of it.
Yeah that helps mate cheers.
But not sure how you have worked out your gross pay as 10x50 = 500 x 52 =26000■■
£10 per hour x 50 hours per week £500. x 52 weeks per year is £26,000 per annum. But I’m not sure why he has assumed holiday pay at £5200 
Should be 28 days (around £2800 so the gross figure on PAYE would be more like £28,800).
Mistyped on my part - my calculations were based on 60 hours a week, not 50. Couldn’t read my own handwriting…
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Conor:
Your biggest expense is travel to work which is now disallowed in most cases.
Really? Please quote your source of information…