I’ve been doing a lot of research this weekend into which scheme is best for me while working through agency.
As I do a lot of mileage to get to work I need a scheme in which I can claim for that mileage which means Paye is out of the question.
I then looked at Umbrella companies, which don’t seem to popular on here, and found that there are a few good ones out there, the best of which looks to be contractorumbrella.com/
Even so, after reading all the support for Ltd Co’s on here I had expected to take that route however I soon found that there was absolutely no way I would ever be able to work outside of IR35 while driving a truck through an agency and just to confirm it I took the test on HMRC website and failed miserably.
So I simply cannot understand why there is so much support for Ltd Co’s on here or perhaps some people don’t realise just what they’re letting themselves in for.
I think it’s all a con, people have nay got a zb clue, stick with paye and you’ll have full state pension, benefits etc should you ever need it one day.
Being PAYE doesn’t disqualify you from claiming mileage. I am on PAYE with an agency and I get a mileage offset. This is 45p per mile, which knocks 9p per mile off my otherwise 20% tax bill.
If I do ten miles each way monday-friday, I’d claim a total of 100 miles a week, which reduces my tax bill by £9, which might arguably be not be enough to actually run your car on.
What does disqualify you from mileage is being at the same work venue more than 40% of your working year, including what work is projected for the remainder of the year you are in.
Thus, if you start a full time job for instance, you’d not be able to claim mileage at all, since it’s assumed you’ll be 100% of your working time at this job.
If you are on agency, and spend say, 13 weeks at 4 different venues throughout a single tax year - you’d be able to claim mileage for ALL of it, despite being paid PAYE.
The tax relief comes as a result of being a “mobile worker” rather than how you are paid.
Pimpdaddy:
I think it’s all a con, people have nay got a zb clue, stick with paye and you’ll have full state pension, benefits etc should you ever need it one day.
Follow this advice then fill in a form P87 to claim your costs back from the tax man.
mac12:
Follow this advice then fill in a form P87 to claim your costs back from the tax man.
Problem is I currently get paid £140 per shift with umbrella, if I go PAYE that reduces to £128 per shift so even with form P87 I’m going to be quite a bit worse off.
You can claim meal allowance on p87 too, its just dealt with annually rather than each time you are paid.
That’s £12 so is that £1 per hour over 12 hours
mac12:
That’s £12 so is that £1 per hour over 12 hours
That’s right, the £140 is based on 12 hours work but its job & knock so effectively works out at £14 per hr but on PAYE that would come down to around £12.80 per hr which aint so good.
wing-nut:
mac12:
Follow this advice then fill in a form P87 to claim your costs back from the tax man.Problem is I currently get paid £140 per shift with umbrella, if I go PAYE that reduces to £128 per shift so even with form P87 I’m going to be quite a bit worse off.
Does that £140 include your holiday pay ?
If you don’t mind me asking what are you taking home per week on your £700 ?
wing-nut:
mac12:
That’s £12 so is that £1 per hour over 12 hoursThat’s right, the £140 is based on 12 hours work but its job & knock so effectively works out at £14 per hr but on PAYE that would come down to around £12.80 per hr which aint so good.
How much do you pay the umbrella per week?
Terry T:
Does that £140 include your holiday pay ?If you don’t mind me asking what are you taking home per week on your £700 ?
Oops, forgot about holiday pay which is £9.36 per shift, so getting job done in 10 hrs works out fraction over £13 per hr.
Take home on £700 worked out at £591
wing-nut:
Terry T:
Does that £140 include your holiday pay ?If you don’t mind me asking what are you taking home per week on your £700 ?
Oops, forgot about holiday pay which is £9.36 per shift, so getting job done in 10 hrs works out fraction over £13 per hr.
Take home on £700 worked out at £591
How does that work if you add it on to your hourly pay you then have 28 days per year holidays at £0 per week or if you add it all up you have £2200 holiday pay which is £78 per day. If you stayed on PAYE you could get your £128 per day or £3584 per year
I gotta say, several alarm bells are ringing here.
Firstly your holiday pay. Let’s say you get the minimum 28 days holiday per year. £9.36 per shift is £46.80 per week and £2171.52 per year for the 46.4 weeks you’ll be working. Divide that by the 28 days you’ll have off and it works out to £77.55 per day.
Second is your very high take home pay. How much are you claiming per week in expenses to get £591 in your pocket from £700. That’s 79% of your net pay. If you tap £700 into a PAYE calculator it works out to £534 at current tax codes. You’re getting an extra £57 from somewhere. Possibly more if the £591 includes your Umbrella fee.
See what you mean about holiday pay.
To get £591 I’m currently claiming 570 miles per week @ 45p per mile and £50 subsistence. I’m expecting take home to drop to around £545 once I’ve claimed 10,000 when it drops to 25p per mile.
That’s a hell of a commute 
You do well to run a car on all them miles for 9p per mile and still make money
Is this your only place of work ?
If you only work at one place then you cannot claim mileage allowance as it becomes a permanent job. Mileage can only be claimed for travel to temporary jobs.
Read this link from the site you posted earlier in the thread.
Terry T:
That’s a hell of a commute
Unfortunately where I live there is very little work and what there is pays around £8 per hr so I’ve always had to travel to earn reasonable money.
Car does 60 mpg and can do it in hour each way so with 10 hours work I’m only away from home for 12 hours.
Problem is on rare occasions when day goes ■■■■ up and end up with 13/14 hour day plus 2 hours travel, not so good then.
Know what you’re saying about claiming mileage at permanent workplace but it won’t be that permanent as I get bored easily and move on.
wing-nut:
See what you mean about holiday pay.
There’s no fancy way to dress this up I’m afraid. Your agency are stealing your holiday money from you.
wing-nut:
As I do a lot of mileage to get to work I need a scheme in which I can claim for that mileage which means Paye is out of the question.
You can claim for mileage on PAYE as long as you don’t have a fixed place of work. However you would do it via a P87 “Expenses in Employment” so rather than getting the benefit of the expenses claim in each week’s wage you’d get a refund from HMRC after the end of the tax year.
As winseer says, there are limits. I limit myself to working for just two companies with the agency I’m at so I cannot claim for the one I’m at the majority of the time as it would be classed as commuting.