can someone explain why, if iam self employed as a driver i need to be a ltd company please , after looking for work today i dont understand why this is required
holliefabbabe:
can someone explain why, if iam self employed as a driver i need to be a ltd company please , after looking for work today i dont understand why this is required
Because anyone can knock up a sheet on their PC that says they’re registered for self assessment and then not bother paying their tax at the end of the year, which the client is then required to pay. If you’re ltd co it’s a lot more difficult to do this as your legitimacy can be checked online and if you don’t pay your tax it’s not their problem like it is with s/e. It’s not fool proof by a long way but it’s about the best option available to them.
but i am registered, i have paid tax and have a utr code for when i do my tax return
holliefabbabe:
but i am registered, i have paid tax and have a utr code for when i do my tax return
Doesn’t make any difference. Read my OP.
It’s an income tax thing that means unless you have 3-5clients you need to be ltd to satisfy that you are self employed and not employed as a tax dodge. As you are then deemed an employee if the ltd company also the allownences are better
alix776:
It’s an income tax thing that means unless you have 3-5clients you need to be ltd to satisfy that you are self employed and not employed as a tax dodge. As you are then deemed an employee if the ltd company also the allownences are better
…is completely wrong.
You do not have to be a limited company. (technically you would form a limited company and contract yourself out, not actually be a limited company yourself). You can register sole trader. Its actually up to you, but your clients may dictate who they contract. With both you have to submit accounts, via self assesment to HMRC and pay tax on essentially - profit. NI contributions differ in detail, depending on the two.
Anyways. Forming a limited company is a little more complicated as you are legally bound to submit accounts to Companies House. The main sticking point for self employed contract drivers, in fact contractors as a whole, who contract within the UK is IR35 legislation. Neither routes provide indemnity against this legislation despite mis-information that forming a satellite entity by yourself, who employs yourself will circumvent this.
The best thing you can do when driving as contractor is work for multiple clients.
so is it law that you have to be, or can i prove iam self employed , iam currently self employed on a thing i do from home, but also paye doing driving for 2-3 days a week where it fits between the kids and life,
Speak to an accountant
holliefabbabe:
so is it law that you have to be, or can i prove iam self employed , iam currently self employed on a thing i do from home, but also paye doing driving for 2-3 days a week where it fits between the kids and life,
It’s almost impossible to prove to anyone that you are self-employed if you are a sole trader. Agencies like the idea of having ‘Ltd Co.’ drivers because (rightly or wrongly) they think this distances them more from the driver and his/her tax affairs, legal liability etc.
I used to be in the same situation as you, running a small business as sole trader and doing a few days a week on PAYE. That all changed when the agencies had to start abiding by the agency workers directive a few years ago and the only option was to set up as a Ltd Co. which would not have been worth my while for the hours I was doing. Now that agencies are more desperate for drivers they are more likely to offer the option of PAYE but it will only be for 13 weeks, after which they will be obliged to abide by the rules mentioned, and this would take you nicely up to Christmas anyway (as far as they are concerned).
Agencies want you to be Ltd to cover their backsides because they know what they’re doing is a very grey area.
I am in the same boat here, I already have a pension from a previous employment so for me to work PAYE I am basically working for the tax man, so my accountant has recommended that I become a ltd company which I have just become yesterday, I start a job on Monday through an agency and they wanted me either PAYE or as a ltd company. I am only going to be working 2-3 days a week as again any more and the tax man starts to rub his hands in glee.
does anyone have any ideas on what I will be able to claim against and how it works
Whitey2104:
does anyone have any ideas on what I will be able to claim against and how it works
I’m in the same position. I’m thinking of going Ltd in the next couple of weeks. I hope your accountant advised you to go on the flat rate VAT scheme? Apparently its like getting a 10% pay rise. Your accountant should be able to advise you on what you can claim, how much to pay yourself as wages and how much to pay as dividends to minimise your tax and NI payments. Also you can claim for travelling expenses to get to your place of work at 45p per mile. Also meal expenses but you need receipts. Another useful piece of advice I have picked up from others on this forum is to tell the agencies what your minimum rate is, which should always be above the rate they offer you! There is a driver shortage after all, take advantage while you can. Out of interest, what have they offered you and what area are you in?
Doc Hollyday:
Whitey2104:
does anyone have any ideas on what I will be able to claim against and how it worksI’m in the same position. I’m thinking of going Ltd in the next couple of weeks. I hope your accountant advised you to go on the flat rate VAT scheme? Apparently its like getting a 10% pay rise. Your accountant should be able to advise you on what you can claim, how much to pay yourself as wages and how much to pay as dividends to minimise your tax and NI payments. Also you can claim for travelling expenses to get to your place of work at 45p per mile. Also meal expenses but you need receipts. Another useful piece of advice I have picked up from others on this forum is to tell the agencies what your minimum rate is, which should always be above the rate they offer you! There is a driver shortage after all, take advantage while you can. Out of interest, what have they offered you and what area are you in?
I’m getting £10 per hour class 2 in a bin wagon basically. could be only one day one week then three the next then a full week afterwards there are no set hours which suits me really I neither want or need a full time job and its all experience
tallyman:
It’s almost impossible to prove to anyone that you are self-employed if you are a sole trader.
Bull ■■■■… if your invoices show you are working for ‘whoever’ you want ‘whenever’ you want that is enough for the tax man.
As posted beforehand…you need to be invoicing more than 1 ‘employer’ otherwise you’re not exactly working for whoever you want are you?
Freight Dog:
alix776:
It’s an income tax thing that means unless you have 3-5clients you need to be ltd to satisfy that you are self employed and not employed as a tax dodge. As you are then deemed an employee if the ltd company also the allownences are better…is completely wrong.
You do not have to be a limited company. (technically you would form a limited company and contract yourself out, not actually be a limited company yourself). You can register sole trader. Its actually up to you, but your clients may dictate who they contract. With both you have to submit accounts, via self assesment to HMRC and pay tax on essentially - profit. NI contributions differ in detail, depending on the two.Anyways. Forming a limited company is a little more complicated as you are legally bound to submit accounts to Companies House. The main sticking point for self employed contract drivers, in fact contractors as a whole, who contract within the UK is IR35 legislation. Neither routes provide indemnity against this legislation despite mis-information that forming a satellite entity by yourself, who employs yourself will circumvent this.
The best thing you can do when driving as contractor is work for multiple clients.
I think you’ve summed it up spot on.
Torkey:
tallyman:
It’s almost impossible to prove to anyone that you are self-employed if you are a sole trader.Bull [zb]… if your invoices show you are working for ‘whoever’ you want ‘whenever’ you want that is enough for the tax man.
As posted beforehand…you need to be invoicing more than 1 ‘employer’ otherwise you’re not exactly working for whoever you want are you?
Your second line directly contradicts your first. 
Torkey:
tallyman:
It’s almost impossible to prove to anyone that you are self-employed if you are a sole trader.Bull [zb]… if your invoices show you are working for ‘whoever’ you want ‘whenever’ you want that is enough for the tax man.
As posted beforehand…you need to be invoicing more than 1 ‘employer’ otherwise you’re not exactly working for whoever you want are you?
I wasn’t referring to the taxman, he would have you on record anyway, I was referring to agencies as they know that anyone can knock up a bogus invoice on a PC and pass it off. It’s the ‘Ltd Co.’ bit that agencies want in order to (as mentioned before) ‘cover their backsides’.
It works out great been Ltd since April , accountant spot on , just paid 1st quarter flat rate vat , doing same work but got the better money and more freedom . I have private work and break it up from time to time with agency work ( keeps hmrc happy ) wish I had done it years ago : )
leedswarrior:
It works out great been Ltd since April , accountant spot on , just paid 1st quarter flat rate vat , doing same work but got the better money and more freedom . I have private work and break it up from time to time with agency work ( keeps hmrc happy ) wish I had done it years ago : )
Hi Leedswarrior,
Do you do your own bookkeeping then hand them over to your accountant at year end or dos he take care of everything.
Regards,
Jeff. 
Hi Jeff he does everything charges 600 a year but will save me much more than that all I have to do is invoice the client or agency and keep my receipts Quid’s in ; )