It’s become/becoming a very unattractive method of working adhoc, with the financial incentives not as good as they once where. Unless you have an extremely good reason for going Ltd, avoid it. Being an employee of your own company put you in a position where you will be paying employers AND employees NI contributions. Then as an employer you will fall into the realms of the new workplace pension, and unless you opt out you would have to provide yourself with a pension and contribute to it both as employee & employer. So any initial financial gains will be wiped out by overheads
peirre:
It’s become/becoming a very unattractive method of working adhoc, with the financial incentives not as good as they once where. Unless you have an extremely good reason for going Ltd, avoid it. Being an employee of your own company put you in a position where you will be paying employers AND employees NI contributions. Then as an employer you will fall into the realms of the new workplace pension, and unless you opt out you would have to provide yourself with a pension and contribute to it both as employee & employer. So any initial financial gains will be wiped out by overheads
You opt out of workplace pension, you get an accountant who does payroll for you, you pay yourself around £10k pa, (no personal tax to pay, minimal NI contributions) you leave the rest in your business account, you pay tax on the profit (lower rate than PAYE), you pay your accountant, you pay the taxman, you move what’s left in the business account to your private account as a year end bonus and start the process again for a the next year.
It’s the same for whatever you do as a limited company, be it a baker, driver, plumber, etc.
peirre:
It’s become/becoming a very unattractive method of working adhoc, with the financial incentives not as good as they once where. Unless you have an extremely good reason for going Ltd, avoid it. Being an employee of your own company put you in a position where you will be paying employers AND employees NI contributions. Then as an employer you will fall into the realms of the new workplace pension, and unless you opt out you would have to provide yourself with a pension and contribute to it both as employee & employer. So any initial financial gains will be wiped out by overheads
I was looking into this so done a Google search on it and came across a thread you started back in 2010 about going limited. It was an interesting read and took me a full bloody hour in that time my tea went cold to which I hold you fully responsible for haha…
Berty:
I was looking into this so done a Google search on it and came across a thread you started back in 2010 about going limited. It was an interesting read and took me a full bloody hour in that time my tea went cold to which I hold you fully responsible for haha…
Sent from my HTC One_M8 using Tapatalk
Well put the tea cup in the microwave oven and warm it up.
As for “going Ltd” back then it was an attractive prospect, but after umbrella Co’s put a spoiler on it, it’s become less attractive to the point it’s a liability
PAYE…let HMRC rob you of your money before you get your hands on it.
Ltd…Keep your salary below the tax threshold, therefore no income tax to pay on it, draw dividends which are taxed lower than income tax, pay minimal ni, claim expenses which are offset against your tax liability, go frs vat registered and keep approx half the vat generated on your invoices. If you need to, pay an accountant approx £500 per year to do the paperwork.
Berty:
I was looking into this so done a Google search on it and came across a thread you started back in 2010 about going limited. It was an interesting read and took me a full bloody hour in that time my tea went cold to which I hold you fully responsible for haha…
Sent from my HTC One_M8 using Tapatalk
Well put the tea cup in the microwave oven and warm it up.
As for “going Ltd” back then it was an attractive prospect, but after umbrella Co’s put a spoiler on it, it’s become less attractive to the point it’s a liability
Yes after reading a few posts iv gathered that… I was just thinking with me getting some valuable experience on the class 1’s I could go back into plant as I know most the company’s in my area through my previous job (I was driving a rigid then) as we used to borrow machinery of each other and they know me personally. So I was thinking i could give my card out thus working for them direct and cut out the middle man so I could get a bigger slice of the pie so to speak…
Many forget when they setup as ltd there’s still more effort reqd than walking into a yard and driving a truck, & returning to the yard and hanging up the keys. You still have to run around / phone your contacts arranging work for tomorrow, next week etc. Then there’s the bookkeeping, invoicing etc all of this eats into your free/family time. Even if it’s not you doing this, someone’s gotta do it. What price do you put on that?
peirre:
Many forget when they setup as ltd there’s still more effort reqd than walking into a yard and driving a truck, & returning to the yard and hanging up the keys. You still have to run around / phone your contacts arranging work for tomorrow, next week etc. Then there’s the bookkeeping, invoicing etc all of this eats into your free/family time. Even if it’s not you doing this, someone’s gotta do it. What price do you put on that?
Honestscott76:
Yes, but believe me, it’s worth it.
Honestly !
I have a funny feeling there’s a whole load of “Whoa agencies are charging a fiver an hour more than I get paid, I can make a killing!!!” going on. And usually that means the person making that statement has no idea of the real costs to an employer of paying someone £x per hour and hasn’t taken into account how many costs from running a business have to come out of that extra fiver as well.
So lets put a bit of reality into things.
Well to be worth it, for a start the rate needs to be at least 26% higher than you’d get PAYE on agency/employed (whichever is higher) just to break even on the pay side taking into account holiday pay and employers NI. Then assuming you’re able to get at least 40hrs a week you’re going to need at least an additional £1/hr or £40 a week on top of that to cover the running costs of your company, accountant fees, insurances, advertising such as flyers and business cards etc. And you’re still going to be working at home for free on a night and weekend. If you want to cover the time you spend at home unpaid doing company business as well then you need to add another £1/hr. In all of this I’ve not included any costs for borrowing which you may or may not need to do until the invoices start getting paid - don’t expect the first one to be paid for at least a month, maybe two months from the first day you work as you’ll find the better paying clients want monthly invoices on 28 days so if your first day of work is 1st October you’ll actually be invoicing for that on 1st November and get paid 30th November.
In short if you can do the job for PAYE on agency for a tenner an hour just to be able to pay yourself the same amount of money you need to be looking at being able to charge at least at £15/hr which co-incidentally turns out to be about what an agency will charge their clients if they’re paying the drivers £10/hr PAYE. The less work you have a week as an average over the year the higher your hourly rate needs to be to break even with being employed by them or working there via agency because your running costs are mostly going to be fixed so form a higher percentage of the company income and leave you earning less per hour.
For those of us who have run our own businesses and see people banging on about agencies being rip-off merchants because they’re charging a client £15/hr but only paying their PAYE drivers £10/hr we tend to put our head in our hands. When someone thinks its as simple as just deciding you’re going to do it and that you’re going to get full time work all year round from the off and that everyone is going to pay you on time if they pay you at all we tend to do this…
