so ive registered with an agency that if i want work i have to got ltd to work for, the accountants bill is £9 a week and they take 5% of the weekly earned but do all my taxes and let me know weekly what i should be putting away vat wise etc etc, so here are a few questions i have about itas im a firm beliver that the person on the end of the phone would tell me lies just to get the sales commision
so for instance:
I invoice 25k for the years work, i pay my self minimum wage with dividends for tax purposes
50 hours a week for 52 weeks of the year, total 17420, i pay 20% tax at £1484 and NI at £1135
i pay £1250 to the umbrella scheme at the %5 rate they take plus £468 for the £9 a week they take for accountant fees
( i know i could do this myself cheaper but if you dont do it the agencys way its the highway basically but lets forget that bit for a min)
so in total, from the £25000 ive invoiced for for the year that leaves the company with £5862 bear in mind i havent took any dividends from this ammount yet so it will end up less, so for all my expenses ie new boots milage allowance, new maps and all my other expenses what do all these get deducted from, is it the £5862 companys profits or is the tax i pay on the wage i give myself,
i understand that some of sums might not be quite right as i belive i can pay lower tax and NI contributions somehow as my accountant is yet to explain these things to me, but in principle what do the deductibles out of, is it my tax or the companys, and also if i pay £20 for a new map, is the £20 deductible or is it only the VAT,
any help would be apprieciated thanks guys
PS please dont turn this into an agency hate thread, my current family circumstances dictate this for me atm as i need the flexibility it can give me
Broadly speaking all your expenses come out of the company profits as long as they are wholly for business use, eg maps parking. You can also claim the business part of your phone bill and use of a home office. As long as you are organised eg in keeping receipts and records then you should be able to do the accounts your self.
so can i claim the full £20 i pay for map or can i only claim the VAT back■■?
thanks
You have think in a slightly different form when doing Ltd company accounts eg
Total sales £10000 this will be the amounts you invoice to agency and other customers ( this will be net of vat if you become vat registered)
less cost of sales
Cost of sales£ eg stationary maps computer phone bill(less a proportion for private use) unless you have a separate business line
wages eg your salary doesn’t have to be minimum wage often is the tax free personal allowance.
this total £ say 9000
Company profit is then £1000 this is then taxed at corporartion tax 20% eg £200
total left over £800
Vat is accounted for separately you are only a collector on behalf of HMRC
Plugster:
the accountants bill is £9 a week and they take 5% of the weekly earned
Ur getting shafted. I’ve done years worth of LTD and Umbrella and never paid much more than about £10 per week. I had a company try to charge me £15 once and when I told them my last place did it for £10 they offered it me straight away.
And none of this percentage ■■■■■■■■. Why do they need a percentage off you, their workload is the same regardless. I don’t know why, in general, drivers let them get away with it. Having done all this in other sectors I’m constantly surprised at how massively the urine is extracted from drivers.
How much higher is the LTD rate compared to PAYE ?
Not having a go or anything, I understand you’re a family man who has responsibilities but that’s the thing that annoys me the most, that decent working people are being ripped off by these shysters.
A friend of mine, and yes he really is a friend not MMTM is paying just shy of £4 a week for accounts and she is the brown stuff hot at it, he paid 18p on his stamp last week!! I’d shop around personally. Oh and we are based in Yorkshire if that makes a difference?
Plugster:
so ive registered with an agency that if i want work i have to got ltd to work for, the accountants bill is £9 a week and they take 5% of the weekly earned but do all my taxes and let me know weekly what i should be putting away vat wise etc etc, so here are a few questions i have about itas im a firm beliver that the person on the end of the phone would tell me lies just to get the sales commision
so for instance:
I invoice 25k for the years work, i pay my self minimum wage with dividends for tax purposes
50 hours a week for 52 weeks of the year, total 17420, i pay 20% tax at £1484 and NI at £1135
i pay £1250 to the umbrella scheme at the %5 rate they take plus £468 for the £9 a week they take for accountant fees
( i know i could do this myself cheaper but if you dont do it the agencys way its the highway basically but lets forget that bit for a min)
so in total, from the £25000 ive invoiced for for the year that leaves the company with £5862 bear in mind i havent took any dividends from this ammount yet so it will end up less, so for all my expenses ie new boots milage allowance, new maps and all my other expenses what do all these get deducted from, is it the £5862 companys profits or is the tax i pay on the wage i give myself,
i understand that some of sums might not be quite right as i belive i can pay lower tax and NI contributions somehow as my accountant is yet to explain these things to me, but in principle what do the deductibles out of, is it my tax or the companys, and also if i pay £20 for a new map, is the £20 deductible or is it only the VAT,
any help would be apprieciated thanks guys
PS please dont turn this into an agency hate thread, my current family circumstances dictate this for me atm as i need the flexibility it can give me
£33 a week to do your books, I’m sure I paid £22 and was earning more doing more hours, I thought that was a lot.
got no choice either use them or dont work for this agency but it one of the best payer in this area
Hi there. For the cost of this umbrella scheme you could get a decent accountant at half the cost of this.
The agy can’t make you go through there umbrella scheme seems to me that they are getting a cut somewhere down the line.
My advice get a proper accountant and don’t go with umbrella company’s as they are all a bunch of robbing bar stew ards.
Good luck with it all mate.
Boycie
I know you say they’re 1 of the best paying agencies in the area, but by how much?
ie. You pay £9 + 5% of your wages to the umbrella company. Are the others paying THAT much less? If any are even close to that and are PAYE I’d go with them instead. (earn £500 per week, -5% = £475 - £9 = 466. Then take your tax, ni and remember that you don’t get any holiday pay with these schemes…)
It does sound like a con to me mate, and I personally wish that nobody would work for these cowboys, but I also understand circumstances can force us all to do something we don’t want to.
Boycie2013:
Hi there. For the cost of this umbrella scheme you could get a decent accountant at half the cost of this.
The agy can’t make you go through there umbrella scheme seems to me that they are getting a cut somewhere down the line.
My advice get a proper accountant and don’t go with umbrella company’s as they are all a bunch of robbing bar stew ards.
Good luck with it all mate.
Boycie
The problem is, read above! Use them or don’t work for that agency.
Plugster:
so ive registered with an agency that if i want work i have to got ltd to work for, the accountants bill is £9 a week and they take 5% of the weekly earned
[…]
so in total, from the £25000 ive invoiced for for the year
£1718 per year for ltd company accounts!? 
Sorry please give me a few moments while I pick myself up off the floor.
If you’re paying more than £500/year for ltd company accounts for a wagon driver, you’re doing it wrong and/or getting ripped off big style.
Plugster:
got no choice either use them or dont work for this agency but it one of the best payer in this area
Don’t use an umbrella company.
If the agy insists you use them walk away, even if they are the best payers in the area
waynedl:
I know you say they’re 1 of the best paying agencies in the area, but by how much?
ie. You pay £9 + 5% of your wages to the umbrella company. Are the others paying THAT much less? If any are even close to that and are PAYE I’d go with them instead. (earn £500 per week, -5% = £475 - £9 = 466. Then take your tax, ni and remember that you don’t get any holiday pay with these schemes…)
It does sound like a con to me mate, and I personally wish that nobody would work for these cowboys, but I also understand circumstances can force us all to do something we don’t want to.
Boycie2013:
Hi there. For the cost of this umbrella scheme you could get a decent accountant at half the cost of this.
The agy can’t make you go through there umbrella scheme seems to me that they are getting a cut somewhere down the line.
My advice get a proper accountant and don’t go with umbrella company’s as they are all a bunch of robbing bar stew ards.
Good luck with it all mate.
Boycie
The problem is, read above! Use them or don’t work for that agency.
I did read his post Cyril!!! I am merely giving my advice to a fellow Ltd company driver.
Bottom line is agy taking the mickey bliss. If you want my accountant details who I use and sorts the whole shebang pm me and will send you details.
As Cyril said if they won’t let you work without commiting your self to umbrella scheme don’t bother. If you work for other agy that pays less you will earn more as you Will be playing less fees.
Also as Ltd you want to be on £12 ph + vat minimum.
Good luck. Boycie
I don’t really understand why people bother with umbrella schemes . Also the accountancy fees you have been quoted are very high . Go and see an independent accountant get him to set up your ltd co ( around £40 ) and he will normally give you a input book it’s very simple to fill inane good accountant will sit you down and show you how to fill in any how . I was paying around the £400 mark for my yearly accounts and that was with my own truck and vat registered too .don’t worry what you can and can’t claim for put every thing work related into the book and at the end of the year give your accountant your book and receipt and bank statements and let him put forward what you can and can’t claim for. That’s what you are paying him for . Their are ways of keepin you bill down ie keeping your personal and business bank accounts separate and putting phones in the company name . Also you will set yourself up at a very low wage prob about £125 per week and you will pay what income tax is due on that the the rest you will pay your self as a directors dividend which to an extent is tax free but your accountant will explain all this and give you an idea of what corperation tax will be due
I think the agencies are taking the ■■■■ big time, and its all because of the new rules that came in, and their way of getting out of it, is to make all drivers responsible for their own expenses, so self employed is the way, i have yet to have big arguments with them, even though i will be the loser. If they had a union/organising body, then maybe they could get a decent rate for the job in the first place that would cover all of the legal stuff.
I would not go back on ltd again for 2 reasons. One, the tax man is starting to look into this for drivers as ur not actual self employed I.E. U don’t own ur own truck and u don’t go looking for contracts etc. it’s all done through agency just like a normal job. Two, u a getting less & less for ur money expenses etc. not better off now once u have paid all ur bills and put ur hol. Pay away ur actually worse off. If the agency a telling u that they won’t take anyone on paye I would speak to ur locall jobcenter and inform them u have spoke to the local MP and tax office and vice versa for all three as I’m sure they can’t do that. Also I know that they might just put u on there books but not give u much work but at least u have stood ur ground I done this but I worked for a couple of agency’s at a time and told them first come first served and was never short for work apart from the end of January and February but still got enough to pay the bills in those months
thanks for all the comments and i know they are taking ■■■■■ but thats not what im asking, what im asking is what expenses can i claim and what do they come out of,
i could report them but what wwould become of it, nothing thats what, these agencys arent soft and there back are well covered, and as for not being self employed, i am im hiring my services to them and they provide the tools for me to do the job, this is one of the biggest agencys in the country and im pretty sure what there doing is legal, it may be immoral but thats business for ya, i know i can get an accountant for buttons, my uncle is a chief account at a larger aerospace firm and he would do my books for nothing, thats not the point, if i want the work from this agency working for a local supermarket at £2 above PAYE then this is the only route, and as for holiday pay i dont care about that, i will be getting holiday as i pay my self a wage, in this world its either work with the chance you get or get dragged down stacking shelves for minimum wage, its the way UK has gone, business friendly i believe its called more like us and them
If you operate as a limited company earning £30k you will be better off.
First of all you pay yourself a wage based on your tax free allowance of £10k. This will incur some national insurance but no tax and will maintain your state pension.
The remainder of the £30k i.e £20k can be paid as a dividend and is subject to 20% tax but most importantly is NOT subject to national insurance at 12%. This will save you £2,400 for the year vs PAYE. In addition to this you will be able to claim reasonable allowances against tax including mileage to work, uniform and other expenses.
Yes you will have to pay for an accountant, or book keeper and be organised in terms of keeping a record of income vs expenses. VAT returns you can do yourself.
Even if you had to fork out a £1,000 to get all of your tax returns and books done ( and you can get it done for a lot less) then you are clearly far better off.
Yes, the inland revenue is closing in on tax avoidance but we are at the very bottom of their food chain and there is nothing remotely dodgy or illegal in being a limited company driver.
I fail to see why any agency or self employed driver would operate in any other way given that you are not benefiting from the pervceived security of am employed job.
cheers matt, there is no job security, most firms dictate what happens and you go along, job security died when maggie crushed the unions, albiet it was partly the union fault for demanding more than what was neccessary, but weighting all the options up i think LTD is the way to go albiet i know im getting screwed, but i also know im getting a good rate on my hours so for now ill take it
An Umbrella scheme & a ltd co…one or the other surely?
Run a mile…I would.