Just wanted to share my recent experiences.
About 2 years ago my agency started trying to push us drivers down the NOVA/Self Employed route.
As it all felt a little dodgy I made some enquiries. One of the benefits they were using as a carrot was the ability to offset travel mileage to work against income tax at 45p per mile.
I ended up having a conversation with HMRC Tax Office who informed me that, as I was agency, I could do exactly the same directly with them without having to pay NOVA or accountants fees, simply by filling in a P87 or, if likely expenses were in excess of £2500 per year, by filing a self assessment tax return.
My first year exepnses were around £5000, but I found filing a self assessment online was easy and I had overpaid tax refunded to me within a week.
I basically paid zero tax that year and subsequent years my tax code has been increased to incorporate £5k worth of expenses.
Next, due to the way that HMRC recognise the expenses, you can request a Tax Statement that, in my case, showed Gross income £21500 minus allowable expenses £5000 = total pay from all employments £16500.
After taking advice, when my Child Tax Credits came up for renewal I submitted the lower figure of £16500 as my pre tax income.
After a bit of investigating Tax Credits agreed this to be the correct figure to submit and duly paid me an extra £2500 in underpaid Tax Credits.
By now my circumstances had changed to being a lone parent working only weekends for about £250 a week. I applied for housing benefit but was earning too much wages, however, I argued that, if they deducted my allowable expenses as HMRC and Tax Credits had decided was appropriate, then I would be entitled to some benefit. I challenged their decision with the help of Community Legal Advice Centre, and won my appeal.
Given that I am commuting 130 miles each way to work on Saturdays and Sundays I am booking £234 travel expenses against a £250 income meaning my actual salary has to be taken as £16 per week resulting in FULL Housing and Council Tax Benefit.
So, Totally Legally and under advice from the Government Agencies and backed up by lawyers with Case Law, I am earning £250 per week, getting £280 Tax Credits per week, £115 Housing Benefit, £18 Council Tax Benefit, AND paying no Income Tax PLUS get free prescriptions/glasses etc…All because Im a temp working Saturday and Sunday with no fixed place of work.
At every stage people have commented that they have never come across this before, and that my circumstances are unique, whereas i reckon that these rules and regulations are buried that deep in the legislation that very few average Joe agency drivers are ever likely to stumble upon them let alone push the theory so far as to get a positive outcome.
Id love to hear if anyone else has tried this route before.
It’s hard work trying to read this