Hi guys/gals,
Could someone plz explain the basics to me regarding this, I’m not in training yet but I see Hgv jobs online saying paye or umbrella, self employed (I understand that one!) etc.
isn’t it just a case of getting paid into an account every month Or is that too simple?
Cheers All 
What is a umbrella lol
I think its that thing they clean your knob out with when you have slept with a girl from skelmersdale.
PAYE is self explanatory, you get paid by the agency for the work you have done but your tax is deducted as is your national insurance contribution, normally the hourly rate from the agency is less as they have the hassle of administrating this, you are also entitled to holiday pay as a PAYE worker hence the lower rate as they pay you your holiday pay but in effect they are just paying the money they have held back.
Umbrella this as far as I understand is basically the agency pass your money onto another company which then pay you your wages but they keep a percentage of your wages as an admin charge to cover their costs, this can also be flat rate, but I think from what I have read on here is that some umbrella companies don’t always pay the correct amount of tax so you could end up with an unexpected bill, Umbrella company schemes are also under investigation by the inland revenue as of December last year.
Self employed is exactly what it says on the tin, you should get paid a higher hourly rate but you are responsible for your own tax returns, Agency’s don’t tend to like self employed and I haven’t really got to the bottom of why as you invoice them for work done, they pay you and on their records as far as the tax man is concerned there is a paper trail to you … but I am sure someone will be along soon to explain this.
Ltd company, I am a limited company, I work for three hauliers direct I don’t bother with agency’s anymore as I got fed up with being messed about with money, My company invoices the companies on a weekly basis for work I have done. I get paid a higher rate than agency’s offered as the company no longer have to cover the agency’s fees so are happy to give me a bit more. I am in a bit of a different situation as I have a pension, but normally as a Ltd company your money gets paid into the company account, you then draw a salary equivalent to your yearly personal tax allowance over twelve monthly payments, £10000 over 12 months is a salary of £833.33 a month, expenses are taken as well, things like meal allowances, mileage, any equipment(PPE), insurances, phone etc etc etc, then to top up wages you take a dividend which is taxable but at a lower rate although I haven’t taken a dividend yet as I have my pension. An accountant will be needed really if you go limited.
hope all this helps, like I say Agencies can work for you but personal experience has put me off them, I just went to three local haulage companies as a newly qualified class 1 and class 2 driver, offering to be a relief/holiday cover driver and so far I have worked 7 days of the last two weeks, The companies always try me now before they go to an agency as they would rather have a driver they know, who knows their company ways and systems.
Just to add fuel to the fire…
Self-employed agency drivers operating as limited companies are also under scrutiny by HM Revenue & Customs. There are some in the accounting profession (and some at HMRC) who think that most agency drivers do not meet the criteria to be classed as self-employed, so limited companies are probably under as much investigation as umbrella companies. Operating as a limited company is therefore not guaranteed to be a safe alternative and could still land you with a large tax bill, depending on how you’ve structured it, how you pay yourself, how much tax you declare etc.
One of the things umbrella companies do is to take advantage of the non-taxable expenses you can claim as a driver. They pay you minimum wage, then use the rest of your pay to reimburse you for allowable expenses (less their fee, of course). You can claim mileage to a temporary place of work for up to two years, for example, and meal allowances too. If you spend money on work related essentials like safety clothing, some training courses, tacho card renewals etc these can also be claimed through the umbrella company.
There’s nothing stopping you from making such claims direct to HMRC as a PAYE employee though, just fill in form P87 and negotiate with HMRC from there.
Ok guys, thanks for the comments, it puts things into perspective a bit more.
Being a newbie not knowing much of course!
Cheers
Hi has anyone had any dealings with Pml accounting ?
Think I’ve been screwed by then.
The main issue with a limited company as far as HMRC is concerned is the IR35 regulations.
I had to deal with this when I ran an IT company, luckily no problems for what I was doing.
I only think it is likely to cause problems if you work through only one agency or work for one end client.
If to all intents and purposes you are employed by the agency and they are your sole client then IR35 could catch you as I understand it. In this case you may be forced to go PAYE and repay and taxes. IR35 cause quite a stink for people in my trade back in early 2000-2004.
gov.uk/ir35-find-out-if-it-applies
As it says on this page though and you also have to comply with agency regulations.
I am not a lawyer or accountant but have dealt with this stuff for almost 20 years now. Going Limited is not as clear cut as it used to be
I will be retaining my Ltd company and working through agencies. But I have other direct contracts in other lines of work. This keeps me clear of IR35 and I am currently reading up on agency rules and regulations to ensure I don’t get any nasty surprises further down the line.
From what I have read and in my opinion. Umbrellas are to be avoided. Limited is good if you understand it and have a decent accountant. Otherwise keeping life simple under PAYE is probably the best way to go.
From what I’ve heard from people in the know you cant just be a ltd co driving trucks u would need at least 3-4 companies direct. Or another source of income in to the same company ie courier van or motorbike or maybe some IT thing
Also with an umbrella your usually paying the agency for the privalige of and extra £1 per hr…
Personally direct os always best