Go speak to an accountant. They will be best placed to correctly advise, not random armchair experts on internet forums.
Accountants are not qualified to give business advice. They will often lack practical and legal knowledge in such areas. And indeed a simple question to an accountant of …“should i go self employed or stay PAYE?” would lead him to a conflict of interests.
Without being rude to the OP, he has asked to refresh the advice, but appears to have all the beginers questions…i.e.
What can I claim back against my tax burden?
Do I need additional insurances while driving other companies trucks?
Do the agencies produce self billing invoices or do I have to invoice them weekly?
What sort of accountancy fees are reasonable?
Althought to be fair an experienced accountant may be able to answer them questions and definatley get the last one right !! But so could any business advisor. There’s plenty of information on the internet for going self employed, which it appear the OP already is is some capacity but has not grasped a lot of it . Federation Of Small Business is a good start, fsb.org.uk if anyone is deciding to take that route.
And here’s some help before getting there… adviceguide.org.uk/wales/wor … cklist.htm
Accountants have this trick of making themselves a requirement for any business. In reality only the biggest companies have a legal requirement for an accountant.
If you are serious about being limited it’s not as complicated as those wanting your £20 per hour (for a good accountant not a book keeper who offers no advice) want u to believe.
HMRC have free guides to everything, gain an understanding yourself and then make your own decisions. In the end it’s you who may have to justify it to a HMRC investigator. Unless you pay your accountant (£20 per hour) to do it.
I have done my last 2 years accounts using the provided hmrc templates, do my own paye and vat using hmrc provided software. If you make a mistake it will be treated as such by HMRC. They are not there to put u in prison or bankrupt you for not understanding their instructions. Commit intentional fraud and that may be a different matter…
the guy i know has set up and ran several businesses so does know his stuff on that respect.
i dont get anything out of it just thought it may be a useful option for a few lads who ask but dont really know (i have suggested that he places a thread on here to let people know if its allowed?)
on another note i wish my can cost £60 to fill best part of £90 for me
Mike-C:
Without being rude to the OP, he has asked to refresh the advice, but appears to have all the beginers questions…i.e.
Not rude at all, they are the beginners questions because I thought I would be better going to people who have been there, done that and got the nicely embroidered tee-shirt than to some stuffed up suit behind a desk whose first loyalty is to his country club fees.
I am also doing the trawl of the web. .gov is proving very useful for example but there are people on here who know the things that the government don’t think to tell you.
mac12:
I know I’m a bit thick with things like this but if you get £1.50 more per hour how will your wage go up £350 per week.
Because I can pay mileage rates and meal allowances which aren’t paid by my current employer. The NI rate is also lower for self employed people.
The weekly increase on a basic week would be a hundred quid. I can claim a hundred quid in mileage plus any Motorsport mileage, not to mention the fact I have negotiated a higher base rate even if I stay on PAYE. That last bit wasn’t made apparent. Sorry.
mac12:
I know I’m a bit thick with things like this but if you get £1.50 more per hour how will your wage go up £350 per week.
Because I can pay mileage rates and meal allowances which aren’t paid by my current employer. The NI rate is also lower for self employed people.
The weekly increase on a basic week would be a hundred quid. I can claim a hundred quid in mileage plus any Motorsport mileage, not to mention the fact I have negotiated a higher base rate even if I stay on PAYE. That last bit wasn’t made apparent. Sorry.
Under what HMRC rule?
You do realise that it’s only tax relief on the mileage allowance rates, you don’t actually get the rates back?
My earlier 2 points about speaking to an accountant seem to be more relevant than ever having read your latest post.
mac12:
I know I’m a bit thick with things like this but if you get £1.50 more per hour how will your wage go up £350 per week.
Because I can pay mileage rates and meal allowances which aren’t paid by my current employer. The NI rate is also lower for self employed people.
The weekly increase on a basic week would be a hundred quid. I can claim a hundred quid in mileage plus any Motorsport mileage, not to mention the fact I have negotiated a higher base rate even if I stay on PAYE. That last bit wasn’t made apparent. Sorry.
You get mileage and meals plus other things when working PAYE for an agency, mileage is 45p per mile but you only get the tax back on that so 9p per mile so to get £100 back you will have to do 1100 miles per week and that rate is only on the first 10000 so 9 weeks for you. In July I got £947 back from the tax man for the tax year 2013-2014 and I don’t work that many days compared to some.
You can negotiate an higher pay rate until someone wants less than you then your gone, I know a driver who works self employed on more money than the employed or agency drivers but if there no work or truck breaks down it’s him that’s parked up so over the year he earns no more than anyone else.
mac12:
I know I’m a bit thick with things like this but if you get £1.50 more per hour how will your wage go up £350 per week.
Because I can pay mileage rates and meal allowances which aren’t paid by my current employer. The NI rate is also lower for self employed people.
The weekly increase on a basic week would be a hundred quid. I can claim a hundred quid in mileage plus any Motorsport mileage, not to mention the fact I have negotiated a higher base rate even if I stay on PAYE. That last bit wasn’t made apparent. Sorry.
You get mileage and meals plus other things when working PAYE for an agency, mileage is 45p per mile but you only get the tax back on that so 9p per mile so to get £100 back you will have to do 1100 miles per week and that rate is only on the first 10000 so 9 weeks for you. In July I got £947 back from the tax man for the tax year 2013-2014 and I don’t work that many days compared to some.
No, I’m not claiming the tax on the mileage, Ill be claiming a mileage rate for using a privately owned car in connection with my business. That pays at 45p per mile. Otherwise no one would do it, can you run a car for 9p per mile? That wouldn’t cover the costs of running an EV!
Comes of before tax so you don’t pay tax on it so tax on 45p is 9p so you save 9p per mile. The tax man will not give you 45p per mile because everyone would be traveling big mile to earn more than there wage.
I beg to differ. When I was selling cars I would be paid a salary, overtime, commission and then 45p per mile for any business mileage in my car. So for example when I went off on training courses I would get 45p per mile for each mile between dealer and training location. I lost this when I sold my car and went to a company vehicle. Biggest mistake I ever made.
This bit from Parkers should make it a bit clearer to you:
Parkers Guide:
5) You use your own car on business
Commonly referred to as ‘grey fleet’, if you drive your own car for business you must ensure the following:
That your insurance includes ‘Business Use’
The car is up to date with MOT tests and servicing
Ensure that the car meets any age restrictions or CO2 limits set by the company
Many companies try to discourage the use of your own vehicle, mainly from a duty of care perspective because they are difficult to monitor and also because they cost the company more in reclaimed fuel bills.
HMRC sets the Approved Mileage Allowance Payments known as AMAPs and most companies use these when asking employees to reclaim business miles.
The current statutory mileage AMAP rates are:
Up to 10,000 miles: 45p per mile
10,000 miles or more: 25p per mile
These are higher than the AFR rates for company cars because depreciation, insurance costs and road tax are all taken into account in addition to the fuel costs.
The rate is the same for all cars, irrespective of engine size and if you are paid a lower mileage rate you can claim tax relief on the difference. So for instance if the company pays 40p per mile up to 10,000 miles then you can claim back 5p per mile from the government.
Parkers Top Tip: Running a newish, small car maximises your fuel economy and keeps running costs low (eg: road tax, insurance, servicing, etc) so claiming back at the AMAP rates means you should not only cover your costs (including depreciation) but there’s a chance you could make a bit of cash too. Remember though, your car must meet the company’s criteria and your insurance must cover you for business use.
Trying to keep it simple If you earn £20000 you would get £10000 tax free so pay tax on £10000 (forgetting NI ) @ 20% £2000, if you had £1000 of expenses you pay tax on £9000 so save £200 the tax man will not say you have spent £1000 so here it is back. It’s the same when you get an increase in your tax allowance government may put it up £500 but it only means you don’t pay tax on that £500 they don’t pay you £500.
If you work for a company who reimburses you for use of your private vehicle on company bussiness then that company can pay you any figure they want for that use. However HMRC have agreed a figure of 45 pence per mile that can be paid without any tax or NI implications. If your company paid you £5.00 per mile then that is OK BUT you would have to pay tax and NI on the £4.55 that is above the HMRC agreed rate.
Also do not forget that the 45pence (no tax liability) figure is what you recieve gross. You have to fund the petrol, tyres etc etc so it is not 45p per mile profit.
There also seems to be some confusion by statements such as “The NI rate is also lower for self employed people.” By having your own LTD Company you are not self employed. You would be a director and/or an employee of that company. As such you could pay yourself 45 pence per mile as expenses for any qualifying mileage. That 45 pence would come from the Ltd Company’s profit. It would not be funded by anybody else and definitely not HMRC.
By getting the 45 pence as expences as opposed to wages it would save, as others have pointed out, 9 pence in income tax and also some NI and could be worth approx 15 pence per mile factoring in the NI. Each 100 qualifying miles is equal to £45 not being taxed resulting in a gain for the individual of £9 plus about £6 for the NI. If your car does 30 mpg then that 100 miles will have cost approx 3.3 gallons of petrol @ say £5.5 per gallon which makes £16.50 spent to gain £15.
Of course if you where doing the mileage anyway, say from home to a temporary workplace, it would be beneficial to get the £15 knocked of the deductions but it is not worth racking up mileage needlessly trying to make a profit by doing so.
If you work for a company who reimburses you for use of your private vehicle on company bussiness then that company can pay you any figure they want for that use. However HMRC have agreed a figure of 45 pence per mile that can be paid without any tax or NI implications. If your company paid you £5.00 per mile then that is OK BUT you would have to pay tax and NI on the £4.55 that is above the HMRC agreed rate.
Also do not forget that the 45pence (no tax liability) figure is what you recieve gross. You have to fund the petrol, tyres etc etc so it is not 45p per mile profit.
There also seems to be some confusion by statements such as “The NI rate is also lower for self employed people.” By having your own LTD Company you are not self employed. You would be a director and/or an employee of that company. As such you could pay yourself 45 pence per mile as expenses for any qualifying mileage. That 45 pence would come from the Ltd Company’s profit. It would not be funded by anybody else and definitely not HMRC.
By getting the 45 pence as expences as opposed to wages it would save, as others have pointed out, 9 pence in income tax and also some NI and could be worth approx 15 pence per mile factoring in the NI. Each 100 qualifying miles is equal to £45 not being taxed resulting in a gain for the individual of £9 plus about £6 for the NI. If your car does 30 mpg then that 100 miles will have cost approx 3.3 gallons of petrol @ say £5.5 per gallon which makes £16.50 spent to gain £15.
Of course if you where doing the mileage anyway, say from home to a temporary workplace, it would be beneficial to get the £15 knocked of the deductions but it is not worth racking up mileage needlessly trying to make a profit by doing so.
100 miles = £45, 100 miles (above) costs £16.50 , £16.50 from £45 leaves £28.50 . Where did the £15 gain come into it ?
