newmercman:
The ONLY reason to go LTD is for tax purposes and unless you are making over 75k a year you will lose out if you go LTD
Not necessarily, there are other reasons for going Ltd Co.
Semtex:
newmercman:
The ONLY reason to go LTD is for tax purposes and unless you are making over 75k a year you will lose out if you go LTDNot necessarily, there are other reasons for going Ltd Co.
Not in the context of being a self employed driver there isn’t 
The liability aspect, or rather the lack thereof, will not bring any benefit as there is no equipment purchase, from a litigation perspective any solicitor will keep going up the chain until they find someone with some money, limited liabilty or not…
How many firms “do” and “don’t” put you onto the same T&Cs after 13 weeks when working as agency?
Those agencies that don’t play it straight only get to do so because they are aided and abetted by the client firm wanting staff, be they drivers or anything else.
I said that Sainsburys should “hang their heads in shame” for a reason. Compare them to say, Stobarts taking on agency - where I understand that “Agency at Stobarts” is considered a cushy number. THAT’S the difference that “playing it straight” means over “running a dodgy tax avoidance scheme” at the end of the day.
Contract work @ £9ph is barely above the “minimum wage” that I understand is only written in pencil for those considered to be “self-employed”.
To date, Sainsburys are the only outfit to which I didn’t even bother to turn up for their asessment, after working out that I was going to be totally out of pocket with them from day one - as a “contractor” forced to join an umbrella scheme. I wasn’t made aware of the crappy hourly rate on offer until the last minute, but luckily for me - I am still able to throw my hand away that late in the day, unlike some others who’ll feel roped in and committed by that point, and will go along with it.
If I’m to be “forced” onto anything I’d rather not do, then it had better pay top dollar - or I’m gone. Trouble is, me being gone doesn’t stop the system continuing as per usual, leaving me forever a ‘voice crying in the wilderness’, but nothing more. 
swayze1:
i thought u could only work for so long self employed on a company,does,nt matter what u earned
Funny, I heard that today from someone in the building trade, 12 weeks or something? Never heard it before.
I had this very discussion with Nova today, who ever so kindly informed me by text earlier that as of Monday I would not be allowed to be paid as S/E any longer and would HAVE to be set up as Ltd by them if I wanted to be paid! After a lot of discussions including pointing out that driving is not my only source of income (I work in another industry S/E and have an online fishing tackle business so I can prove I am working for more than 1 client), they were firm on the insistence that they could no longer pay me gross, minus their fee. The lady on the phone seemed a bit lost when I enquired if I would get any interest payments from the Tax & NI monies they were holding on my behalf, as they would obviously have to bank it before making monthly or quarterly payments on my account. I explained I did this on my own behalf paying my tax & ni into an ISA & then when I complete my tax return any left over along with the interest earned is mine… stony silence followed!
Hmm,
I am an ex financial and mortgage adviser, gave it up to return to electrical contracting working as a Ltd Co. So could use my own knowledge to wade my way through the tax rules.
IR35 has changed some through out the last few years. Go on the HMRC website and there is a questions and answer page which will guide you through the system and say whether you are at risk under IR35.
I quit electrical contracting after using the Ltd company for 5 years and had a superb accountant. What I did not know, she could guide me.
However, towards the end even she told me to get out the Ltd Co as rules coming into force would eventually catch me. Yes, I sailed closed to the wind in many ways, especially as I knew the system and yes I also did some shocking things that I knew HMRC would never be able to catch as the reporting system from banks (company accounts) is full of big holes. Effectively I paid little tax/NI as it was all grouped together. Charged £1250 pa for accountancy fees but she was well worth the money.
However, though I drive artics weekends for agencies I would NEVER again use a Ltd Co. It is only time before it is shut down completely as it was never meant to allow single directors working for themswelves through agencies and THERE lies your main problem.
YOU need to source the work yourself, NOT the agency. You need to be able to work when you want to and without any supervision from any company you work for. Supply your own clothing/gear etc. Invoice direct to the company NOT an agency. (You are an easy target working for one agency - one investigation and they have all your and hundreds of others details in one easy swoop) Not have a sole source of income, have to have multiple contracts/different companies you work for. You need to be able to replace yourself with another person to do the work if you are not available. Not forgetting that the 2 year expenses rule is a rolling 2 year period, not do another job for a few weeks and the 2 years starts again. That is a mistake poor accountants make to the detriment of those found getting fined. In other words, You.
No doubt there are those on here that will discount all I have said but there you go. Your choice. You pays your money etc etc.
dew:
swayze1:
i thought u could only work for so long self employed on a company,does,nt matter what u earnedFunny, I heard that today from someone in the building trade, 12 weeks or something? Never heard it before.
It is true. You have 3 months to register self employed from going ‘self employed’ or you are considered an employee, hence the CSS card, everything stopped at source.
There’s no point in my mind paying over ANYTHING to some financial paper pusher because you’d have to be making soooo much more money than otherwise to get just what you’ve paid in fees back.
Last time I paid 5 figures in tax for one year was the same time I breached £42k for example. That same tax year, I ended up getting a £2500 rebate, so in fact I ended up paying £7500 PAYE on earnings of £42,000 gross.
Now, some bright spark can tell me that for a grand fee, I could have a couple of grand knocked off that tax bill - but in my mind, at least “some” of that knockdown is stuff I shouldn’t really be claiming for, and represents “grey” offsets at best. This applies especially to tax offsetting that is supposed to involve receipts which you don’t actually have - either because I’ve never actually incurred the expense in the first place, or because I’ve actually been a frugal spender, but have pitched in for “top dollar” versions of the expenses incurred.
The only way I could ever justify paying fees to “finance” people therefore would be if THEY assured me I had ‘money to come’, and were prepared to charge a fee out of that money to come only. Ie. If the “payout” ends up being a lot less, or no money to come at all, then they get nowt.
I understand that some of the PPI claimback firms operate in this manner, but there are others who want you to pay their fees in advance, which means one is wide open to a gross disappointment when the payout barely covers, or is refused outright…
The last time I had any actual dealings with a financial person myself, was when I wanted to arrange a mortgage on bad credit some years ago. I told him exactly what I wanted (100% mortgage, no “premium” rate of interest to pay) and that I would be prepared to pay the 4-figure commission IF and only if that could be arrange - no compromise. If he came back with only 95% or above the going rate of interest, the game was off, and I wouldn’t be shelling out a bean.
I got exactly what I wanted, and he earned his commission. Payer calls the shots. Don’t let anyone else tell you otherwise. 
Those on umbrella companies should ask for regular audits (how much they’ve handed over to HMRC, what they’ve declared on your behalf, etc etc) to keep them on their toes. You’re paying a commission every payslip after all. Get your money’s worth IF you find yourself “having” to be on such a scheme. 
I am due to start with ADR/NFT next week.
They are insisting on Nova/LTD company.
I have read through the posts and am none the wiser!
Bottom line is Yes to LTD,insist on PAYE or find another agency.
Any advice appreciated.
mikeallington:
I am due to start with ADR/NFT next week.
They are insisting on Nova/LTD company.
I have read through the posts and am none the wiser!
Bottom line is Yes to LTD,insist on PAYE or find another agency.
Any advice appreciated.
I have had the unfortunate experience of having to use Nova as a sole trader which cost me over £1600 in margin fees and £240 in Admin fees and various other fees £600,so all in all I worked for a month just to pay them.
They now run you as a Ltd company and tax you at source with no dividends etc and with no control or no say in how the company is run and they give you a company name of the shelf.
I am now in control having set myself up as a Limited Company in my own right with my own name and employ an accountant who is doing the work for me for my best interests.
hope this helps!
I miss the old days where the money came in a brown envelope on a Friday.
Take out £10 for next week,then half to wife half to pub!
Nostalgia is not what it used to be.
don’t bother with nova i tried it listened to all their crap and signed on by the time they took there fee, paid public liability insurance, paid NI. as an employee and as a employer nearly as much as i paid PAYE, it turns out you lose over 30% of your wages every week and they only pay you £30 of every £100 you claim for expenses, the only ones to benefit was the agency no employer NI. contributions sorted myself a descent accountant costs between £400 & £500 but she saves me well more than that so go on line register as ltd company about £30 sort a bank account most do 1st year no fees
Holy thread resurrection batman…
Isn’t the general concensus on here that you need to be on about £14.75ph to justify the umbrella fees?
Thing is, that hourly rate isn’t so hot-looking if you only ever get flat 8 shifts (or less hours still!) with say, an hour taken off for meal break as well. - and yet find yourself out of your house for 10 hours plus every damned day!
Some would say at this point that “a day rate” or “salaried” is better.
Any salaried employment can be converted into “hourly rate” just by dividing the hours you spend away from home into the gross weekly pay.
If you’re paid monthly and/or do tramping - I personally count the time “away from home” as “working” as well, which means that to me at least, every tramping job I’ve ever heard of is on crap money when converted into an hourly rate.
If a firm insists upon “must join our umbrella” therefore - Ask them what the LOWEST rates of pay they are ever likely to pay you, perhaps the monday-friday day rate for instance.
If this figure is below £14.75 (highly likely!) then it just ain’t worth bothering with imho.
Tell 'em it’s PAYE for you, or you’ll find another employer that actually wants to employ you, rather than merely pretend to.
If you’re self-employed LTD company - you should be able to set your own rates. The moment they tell you “The rate is this, and is not negotiable” their biggest lie of all is exposed straight away - They are your EMPLOYERS but want you to be SELF EMPLOYED so you end up paying their taxes and insurance for them. This is the big fiddle of umbrella schemes that HMRC want to crack down upon as of last year.
I am very confused by all of the barrack room lawyers come accountants on here,.
I think the arguments here are not looking at the actual facts, a lot of you are talking about working for agency’s and going LTD, and talking about saving tax on outgoings.
What outgoings as a self employed driver ? please enlighten me. As an OD I have always traded as a sole trader very straight forward , and you get the same tax breaks in the long run, in fact all tax liabilitys work out the same in the end however you do it IE, you only need two columns Incoming and Outgoing, every thing incoming is off set by your outgoings, I no longer use an accountant as it is so easy to do your own, I claim for every penny that is spent on the company and I mean every penny including night out expenses parking ect, right down to the biro`s that I use this is then all off set against my tax bill. And with some creative accounting it can work very well without the need to go LTD.
The main reason for going as Ltd company rather than sole trader is because Corporation Tax is paid at a lower rate than Income Tax, and Dividend income is also taxed at a lower rate than normal Income Tax. You also do not pay National Insurance on dividend income. So by channelling all income through the company accounts, you reduce the amount of tax you pay. Both sole trader and Limited company offset their business expenses against tax.
The usual set-up is to pay yourself a basic, minimum wage (to keep your NI contributions up), but anything above that you pay yourself as a dividend.
Roymondo:
The main reason for going as Ltd company rather than sole trader is because Corporation Tax is paid at a lower rate than Income Tax, and Dividend income is also taxed at a lower rate than normal Income Tax. You also do not pay National Insurance on dividend income. So by channelling all income through the company accounts, you reduce the amount of tax you pay. Both sole trader and Limited company offset their business expenses against tax.The usual set-up is to pay yourself a basic, minimum wage (to keep your NI contributions up), but anything above that you pay yourself as a dividend.
Spot on.
It’s a very well for many of us to postulate what exact (but out of reach) hourly rate one needs to charge to make Ltd or Umbrella pay…
Seeing as the minimum wage and tax rates are fixed amounts - There must be some “exact” threshold where once passed - you’d be better off.
Let’s just count the “fixed” aspects of it. No talk of “tax reliefs” you can get, or expenses etc. - just the differences in taxation/NICs between being paid a wage of say £500 on PAYE
and then the same wage on Ltd. with VAT, Dividends, & Corporation tax…
We already know that one is typically worse off on umbrella - unless you can offset somewhat more than the umbrella fees away in expenses claims, which is not always possible to do completely “legally”…
as I have said time and time again get proper advice personally I wouldn’t go umbrella if I was back driving but I would go ltd, paye has advantages too.
it depends on your own situation and wants/needs simple as.
Roymondo:
The main reason for going as Ltd company rather than sole trader is because Corporation Tax is paid at a lower rate than Income Tax
No it isn’t unless you’re a higher rate tax payer. Corporation tax is 20% the same as income tax. In fact corporation tax works out more than income tax because there’s no equivalent to a personal allowance so every £1 profit attracts 20%.
, and Dividend income is also taxed at a lower rate than normal Income Tax.
Again, no it isn’t. Dividends are paid out of POST TAX profits so they’re paid out of money that has already had 20% tax on it. That is why there’s a rebate given so Ltd Company post tax profits don’t end up being double taxed.
You also do not pay National Insurance on dividend income.
That is the only saving you make. You don’t save on tax. You used to but then corporation tax was moved into line with income tax for the most part. Overall if your Ltd Company makes £10,000 pre-tax profit after wages assuming you’re paying yourself up to the personal allowace, after corporation tax has been applied, you’ve withdrawn the remaining £8000 as a dividend and allowances have been applied to that you end up with £8000 which, excluding national insurance, is the same as someone earning £10,000 over the personal allowance would get.