If, IF, I set up as a Ltd Co in order to get agency work do I need to have insurance.
Another agency telling me that they will only employ Ltd drivers, or working through umbrella…
Thank you.
I guess it depends on exactly what insurance your looking at ■■
vehicle insurance …NO, not required as your driving someone elses truck and so long as you`ve stated in your terms of business that your driving on their insurance you should be covered.
goods in transit insurance …again not required, see above.
Public liability insurance…again not required, but some folks do have around £5M worth of cover for around £150-£200 PA. But its not a statutory requirement. As a labour only Ltd Co driver very few insurance companies will give you cover for the above.
Too many people are being railroaded into going Ltd Co by the agencies, and signing the paperwork with the agy without reading the small print and putting their terms of business in place 1st
Also remember (for those that are VAT registered) any business insurance is zero rated so you can`t claim the VAT back 
I also have to ask you, how long do you see yourself working for the agencies?
Are you only doing it until you get a full time job ASAP with an employer and doing agy work is only to fill the gap, or do you see yourself being on PAYE within 3 years with an employer? if you are going to be Ltd Co for less than 3 years its probably not worth the effort going Ltd Co or using an umbrella*
*we all know what you should use an umbrella for don`t we…
Why would a driver, who becomes a Ltd Co, want to be VAT registered?
bluenose:
Why would a driver, who becomes a Ltd Co, want to be VAT registered?
Thats a debateable question, the usual answer if you can be bothered with volentry registration below the VAT threshold, & with the hassle of keeping records and filling in 4 or 5 of 9 little boxes online every quarter as part of a VAT return is… money. 
Depending if someone goes full fat VAT, or registers for the small business VAT scheme.
With the small business scheme they can charge the agy, or a haulier 20% VAT on the NET invoice, and only have to pay HMRC 10% of the monies collected.
Maybe to get a little more educated on the subject, you should attend 1 of HMRC`s business education units free courses, these are held across the UK are various locations, and take around 2hrs
bluenose:
Why would a driver, who becomes a Ltd Co, want to be VAT registered?
How VAT works: Overview - GOV.UK If you’re in business, you must register for VAT if your VAT taxable turnover for the previous 12 months is more than £73,000.
Maybe he’s a very well paid driver…
My problem is that most of my local agency’s are telling me that they will not do regular PAYE and will only give me work if I am Ltd or using the umbrella.
I would prefer to be fully employed on PAYE, but as these jobs are rather scarce I am in a needs must situation. I guess that these agency’s are using this approach to cut costs and dodge the AWR’s. So a bit of a quandary. Until work (if ever) picks up I will likely find myself at the back of the run sheet!
it sounds like going Ltd Co isnt for you, as it seems you will be back in employment with a haulier within 3 years. if you only see yourself working for the agencies for 3-9 months then you are probably going to shafted by those robbing payroll Cos
I’ve been the Managing Director of a VAT registered, Ltd Co before, but not as an agency driver. I doubt you`d ever hit the threshold 73K, what would you buy to warrant a rebate? You can’t claim Mileage allowance & VAT on fuel, & as mileage allowance is the better option I can’t see the benefit of an agency driver/Ltd Co being VAT registered.
I don’t understand why the OP can’t just become self employed. If it’s the rule about having more than one employer then he could register with several agencies. Becoming self employed is a fairly simple matter.
I don’t work through an agency but do casual work for three local hauliers (mosly one in truth), and I make my own tax return on line.
For some reason the agency want you as a LTD co rather than being self employed not sure why.
garp:
For some reason the agency want you as a LTD co rather than being self employed not sure why.
HMRC guidelines 
S/E ain`t an option around here, your either LTD/brolly/PAYE, its to do with the tax, the agency now has the risk on their shoulders, if you went walkies, before, it was upto the tax man to chase the runner, now, they charge the agency, no messing around, simples
And, before anybody comes out with that old chestnut about being a law abiding, tax paying, upright citizen, there are loads who are not, and, its this “minority” who have ■■■■■■ it up for the rest of us
bluenose:
I’ve been the Managing Director of a VAT registered, Ltd Co before, but not as an agency driver. I doubt you`d ever hit the threshold 73K, what would you buy to warrant a rebate? You can’t claim Mileage allowance & VAT on fuel, & as mileage allowance is the better option I can’t see the benefit of an agency driver/Ltd Co being VAT registered.
I doubt any Ltd Co driver who provides a labour only business to others will ever hit the threashold, but you seem to have missed the point of why many Ltd Co Agency drivers are (volentary) VAT registered.
Most of them are registered on the small business rate scheme, where they charge the agency/haulier/client 20% VAT on their NET invoice, but as they are a “transport company” engaged in road haulage, they fall within the 10% VAT clasification, so they only have to pay HMRC 10% of the VAT accumilated, & keep the other 10% for themselves. The downside of this, is that they cannot claim for items purchased (on behalf of the company) that are valued less than £2500 per single purchase. This 10% of the VAT monies can add up to a small tidy sum at the end of the year. They can still claim the milage allowance, as per P87. Some other drivers stay on the “full fat” VAT scheme. Either way over the year the monies accured by being VAT registered (and the hassle that goes with it 
) can add up to a tidy sum.
ie: if someone earns £40K PA + VAT that means they will gross £8K VAT
on the small business rate scheme of 10% VAT, that means of that £8K, £4K goes to HMRC & the other £4K goes to the Ltd Co
Its amazing what HMRC will show you whats available when you attend some of the business education courses
peirre:
bluenose:
I’ve been the Managing Director of a VAT registered, Ltd Co before, but not as an agency driver. I doubt you`d ever hit the threshold 73K, what would you buy to warrant a rebate? You can’t claim Mileage allowance & VAT on fuel, & as mileage allowance is the better option I can’t see the benefit of an agency driver/Ltd Co being VAT registered.I doubt any Ltd Co driver who provides a labour only business to others will ever hit the threashold, but you seem to have missed the point of why many Ltd Co Agency drivers are (volentary) VAT registered.
Most of them are registered on the small business rate scheme, where they charge the agency/haulier/client 20% VAT on their NET invoice, but as they are a “transport company” engaged in road haulage, they fall within the 10% VAT clasification, so they only have to pay HMRC 10% of the VAT accumilated, & keep the other 10% for themselves. The downside of this, is that they cannot claim for items purchased (on behalf of the company) that are valued less than £2500 per single purchase. This 10% of the VAT monies can add up to a small tidy sum at the end of the year. They can still claim the milage allowance, as per P87. Some other drivers stay on the “full fat” VAT scheme. Either way over the year the monies accured by being VAT registered (and the hassle that goes with it
ie: if someone earns £40K PA + VAT that means they will gross £8K VAT
on the small business rate scheme of 10% VAT, that means of that £8K, £4K goes to HMRC & the other £4K goes to the Ltd CoIts amazing what HMRC will show you whats available when you attend some of the business education courses
Is this another name for the “flat rate scheme”, the math are identical
Its a right little earner, which not too many can be bothered with, keeps me sweet though 
bluenose:
Why would a driver, who becomes a Ltd Co, want to be VAT registered?
Because you can take advantage of the flat VAT rate scheme designed to make VAT accounting easier for small business to make an extra few quid.
Basically under the flat rate, you can’t claim VAT on expenses but you still charge at 20%. However you pay HMRC at a reduced rate to compensate for not being able to claim VAT on expenses, the flat rate being 10% for transport sector.
So for someone like a lorry driver who is not going to have a lot of expenses, you’ll make a reasonable amount of money out of it - certainly enough to make it worthwhile. For example:
Earn £500 in a week.
VAT chargeable on £500 is £100.
Flat rate you have to reimburse HMRC would be £50 so you end up £50 up.
Yes you could claim VAT back on the expenses you claim but unless you’ve got £250 in expenses that week you could claim the VAT off, you’re better off on the flat rate scheme and you make money. Basically unless your expenses are 50% or more of your top line, you make money out of the flat VAT scheme.
More here:
hmrc.gov.uk/vat/start/schemes/flat-rate.htm