Just received a text message from Nova,about the future tax laws coming into force in April.
It looks like it could be curtains for Nova,as the tax man is basically making all Nova registered people,go down the full self employed route.
As it’s a bit long winded,you can here the message on 0870 7305900.(BT rates apply.)
Ken.
Ouch… Must put a hole in their business !!!
G
well some one did say this was on the cards
and his words have been proven correct
As much as I’d like to say “I told you so”, I hope that non of the people using NOVA get hit by a big tax bill. Fingers crossed that HMRC have seen what potentially devastating effects that could have.
One thing it will do is open their eyes to how easy it is to do it properly and save yourself the “NOVA tax”
Another plus is that agencies who want to use Self Employed people will have to look at Sole Traders.
I don’t think the taxman’s going to hit individual drivers as the option to use these managed service companies still exists but the chancellor’s made them economically unviable, so there’s no reason for him to chase for past year’s tax & NIC avoidance. The options are to go totally self-employed or to set up as a personal service company - much the same, but you pay ‘new’ NOVA to do what you could do for yourself a lot cheaper. They mention things like VAT - the current limit at which you need to register for VAT is over £60k turnover - that’s a hell of a lot for a driver, but if you do register below that figure it means an awful lot of potential work for an accountant - or PM umbrella company (the ‘new’ NOVA?).
Whatever individual drivers decide to do, take as much advice as you can - don’t just follow NOVA’s advice packs when they send them out. Self-employment status is not that difficult to sort out & the agencies are going to have to gear up to accepting easier invoicing so as long as you have a PC with a spreadsheet program, a separate bank account (makes things easier at the end of the year), & a willingness to keep close track of your finances then you can easily get by without being beholden to anyone other than your client(s).
Hello and thanks for calling
My name is Paddy Green and I’m the Managing Director of Nova.
The purpose of this recorded message — which lasts about 6 minutes, is to bring you up to date regarding the new tax regulations that are going to come into force on 6th April. These regulations will affect you and your Nova Company. A full information pack, containing details of the range of services that Nova will be able to offer you after 5th April, will be sent to you in early March, giving plenty of time to decide what
you want to do in the future.
From April, service companies, like your Nova company, will be divided into 2 types. Your existing Nova company will be called a Managed Service Company (MSC). This means that all the income that you receive through your company will in future be taxable as if you are an
employee — even if you’re a director — and this means PAYE — income tax — and also double NI, both as an employer and as an employee.
Also you will not be allowed to use your normal expenses such as mileage allowances etc to offset against your tax.
The government are not banning MSC’s as such, simply making them uncommercial.
So, what options do you have from April onwards?
Your first option is to go to your agency and ask them to put you on their books as an employee and pay the full PAYE and NI tax.
This is a suitable option if you don’t intend to work on a temporary basis for very long, or you are not prepared to accept the additional responsibility of working through a new type of company available to you — which brings me to option 2.
You set up a Personal Service Company (PSC).
How does a PSC differ from the MSC you have now?
The main differences are that you will be the sole director — you won’t have a Nova appointed director effectively running the company as currently happens
Secondly, and very importantly, the income due to your company will go direct from your agency into your company’s bank account — not via Nova who currently deduct the tax, VAT, etc and then send the net amount into your private bank account. This means that you will be receiving all your company’s gross income into your company bank account — including VAT if you register your company So, in your PSC, you will be responsible for paying your tax, NI and VAT as and when due. You will be perfectly entitled to appoint professional advisors, such as a bookkeeper to help
you — but the important point is that you are in business in your own right, taking control of the company’s finance and administration, and not passing it over to an administrator like Nova to do it all for you without you being fully involved. And that really is the main issue here — unlike an MSC, in a PSC you are in business in your own right, having full control over the finances and administration of your business — albeit with professional help.
So, you’ll already have gathered that if you set up your own PSC, you’ll need a company bank
account — a bookkeeper/accountant — you’ll also need to put the right insurances for your company in place through an insurance broker and you may need legal advice regarding the contracts between you and your PSC and between your PSC and your agency. If you don’t want to set up a new PSC from scratch, Nova can transfer your existing MSC
across to you — once it’s under your personal control your Nova company would then become a PSC and you would then be totally responsible for running your PSC — and details of how to do this will be in your information pack. If all that sounds like a bit too much hassle, we’ll go to option 3.
And that is to appoint Nova to provide you with any of the range of professional services needed to handle this administration for you The services that you can choose from include:
We can also offer you a way to put aside the tax we calculate you need to pay into a third
party client bank account and they will settle your tax as and when it becomes
due.
So you see, although you will be in business in your own right and in fullcontrol of your company’s finance and affairs, you will still be spared the worst of having to personally do the administration work. Pay Nova to do it for you!
Remember though, that as your agency will be sending the money direct to your company bank account, here at Nova we will no longer know if the money has actually been sent — you’ll have to find that out for yourself from your bank.
Please read our info pack when it arrives at your home. Once you’ve learnt what Nova can offer, then ring customer services with any questions you have — the number is not changing
-but it will help if you wait until the packs arrive and you’ve read them through first, before
you start ringing us about the new services. If you decide to appoint Nova then please don’t
leave it until the last minute as we could then be left with insufficient time to get the admin
done for you at our end before the 6th April
I hope that if you decide to offer your services through a PSC, you will want to appoint us to
help — but whatever route you to decide to take, may I send you my personal thanks for using
Nova in the past and my best wishes to you for the future.
Any thoughts■■?
Yeah…
"So you see, although you will be in business in your own right and in fullcontrol of your company’s finance and affairs, you will still be spared the worst of having to personally do the administration work. Pay Nova to do it for you! "
Pay them £■■ per week to do what an accountant will do for a few hundred quid. And if you’re stupid enough to let them put aside the tax they calculate, you can bet your bottom dollar it won’t be an ISA and therefore won’t give you the equivalent of a 5-6% reduction of your tax bill because of the interest earned in the ISA.
Basically NOVA are hoping you’re stupid enough to pay them so much a week to actually do nothing.
the silly thing is conor some divvy,s will actually do what nova are suggesting and sign up to use them.
you just know it.
Conor:
And if you’re stupid enough to let them put aside the tax they calculate, you can bet your bottom dollar it won’t be an ISA and therefore won’t give you the equivalent of a 5-6% reduction of your tax bill because of the interest earned in the ISA.
I don’t think Limited Companies are allowed to have ISAs anyway (although your point about the interest on the money is still valid, I’m just being a pedant).
Paul
LOL
yep im afraid to say nova and the like has gone ■■■■ up. come march 30th i will be calling it a day and going back paye.
By all means go back to PAYE but keep an eye on the situation as there’s nothing to stop you setting up as a Limited Company at any time during the year.
If you do go back on PAYE, remember you can still put in for a mileage allowance claim by keeping all records of journeys done in regard to agency work and completing a P87. For a great number of people, one of the main benefits of NOVA was claiming the mileage. What NOVA didn’t tell you was that you could already do this.
More info here: