I was talking to a mate of mine who is an electrician . He went down the road a lot of agencie guys did when the government clamped down on the likes of Nova and Maddison and formed his own limited company. He was told by his accountant yesterday that the tax man is not happy with this either and is looking to close the loophole shortly, so beware.
Anyone else had any grief off the taxman recently? Not that I,ve been earning enough recently to get any grief
anyone who is self employed that only works for 1 customer is potentially on dodgy ground. i think you roughly need to work for at least 4 different customers to keep off the radar, i’m sure there are exemptions to this! working for lots of different firms but through 1 agency, i would of thought will count as 1 customer.
stevie
Being s/e myself my understanding is that if you invoice one company for more than 50% of your turnover and DON’T provide your own tools (in our case a truck) then the taxman takes the view that you are an employee of said company, with all the tax and N.I. issues that that entails.
Having said that I can see no reason why an individual can’t form a Ltd company. It LIMITS your liability if it all goes Pete Tong.
Thats exactly what I did in 2006. You just need another person to act as company secretary (mrs G is ours). Because a Ltd company is a legal trading entity with you as an emplyee, albeit a director, I don’t see how this would upset HMRC.
Goaty:
I don’t see how this would upset HMRC.
Obviously you know little about taxation. For a start, the company you do work for gets away with not paying employers NI which currently is 11% of gross earnings.
Secondly, you pay less PAYE, if any at all, if you take a wage out of it as dividends.
Finally, a lot of stuff is claimed as expenses which you couldn’t claim as an employee, such as travel to work, which reduces the tax and NI paid by the worker.
In short, it costs HM Govt PLC a lot of money.
Conor:
Goaty:
I don’t see how this would upset HMRC.Obviously you know little about taxation.
Obviously not ! 
conor:
For a start, the company you do work for gets away with not paying employers NI which currently is 11% of gross earnings.Secondly, you pay less PAYE, if any at all, if you take a wage out of it as dividends.
The customers we do work for pay the equivilant to employers n.i./tax contributions/holiday pay on top of the labour rate and a modest profit 
plus VAT. We operate with exactly the same M.O. as an agency but with myself as the only driver on the books. Why then will HMRC be more disgruntled with me than " M/T Promises Driver Supply". 
Also, as a director of my own company I beleive it is legal to take a dividend at my discretion.
conor:
Finally, a lot of stuff is claimed as expenses which you couldn’t claim as an employee, such as travel to work, which reduces the tax and NI paid by the worker.In short, it costs HM Govt PLC a lot of money.
I take your point about every employee’s ability to claim expenses, however I am pretty confident that any or all of the directors at said employee’s companies will be claiming for exactly the same expenses as myself. 
I’m in the process of starting another company at the moment, doing something else because of the lack of work about at present, so for me this is a pretty academic thread but interesting none the less. 
Conor:
For a start, the company you do work for gets away with not paying employers NI which currently is 11% of gross earnings.Secondly, you pay less PAYE, if any at all, if you take a wage out of it as dividends.
Finally, a lot of stuff is claimed as expenses which you couldn’t claim as an employee, such as travel to work, which reduces the tax and NI paid by the worker.
And all perfectly legal.
Conor:
In short, it costs HM Govt PLC a lot of money.
I would imagine that if you add up all the lost taxes from folk who have gone down this road it wouldn’t even scrape the surface of the taxes not collected from big business and big entrepreneurs. Tax evasion I think it’s called. 
But it’s much easier to come after the likes of me for the pittance I get away with rather than chase after the real evaders.
Stan
Stanley Knife:
I would imagine that if you add up all the lost taxes from folk who have gone down this road it wouldn’t even scrape the surface of the taxes not collected from big business and big entrepreneurs. Tax evasion I think it’s called.
If it was only us wagon drivers doing it then they might not be so bothered but this is common practice elsewhere to. People were doing it in the IT contracting business long before NOVA etc. started up and the issue for HMR&C is that while we’re earning maybe 20-30k gross and dodging a little bit of tax, they might be invoicing 100k gross and dodging an awful lot of higher rate tax (on 100k you would pay a total of 35k/year tax and NI, so you might save up to 20k/year doing it via a limited company!).
Paul