Morning all have any of you started out on your own as a self employed driver ? is it worth doing ? do you find work easy to get ? other than no holiday pay are there any drawbacks thanks in advance
bjd:
Morning all have any of you started out on your own as a self employed driver ? is it worth doing ? do you find work easy to get ? other than no holiday pay are there any drawbacks thanks in advance
-
Register a company at Companies House - Search “FormationsMadeSimple” - don’t buy any of the extra’s - you don’t need them.
-
Register for VAT and enrol on the flat rate scheme
-
Make a spreadsheet or get an invoice program
-
Open a business bank account
-
Knock on doors, agencies, companies etc.
That’s the starting steps, there is more than just the above, but not much more.
Here is a quick calculation I made on PAYE/LTD take home.
trubster:
In the last tax year my earnings were worked out like this (rough figures)Invoiced amounts - £46’000.00 (Including VAT) (£38’333 NET)
VAT Paid to HMRC - £4’600.00£9,440 Salary - No Tax, NI @ 12%
£7’000 in expenses paymentsWhich leaves £24’960 as “Profit” which is taxed at 20% (Corporation Tax)
£20’800 left in the kitty which is classed as a “Dividend” payable to the director tax free.
So on a £46’000 annual turnover which is very easy to do, as pointed out by LHD and Truckbling, you pay £1011 in NI, £4160 in Corporation Tax and £4600 in VAT and in your bank account you have been paid £36’228.57 - Based on a NET figure of £38’333. Just over £2000 off the NET figure.
Just by being enrolled on the flat rate scheme for VAT will cover both your VAT and corporation tax liabilities at no extra cost to you.
This is just a quick example I have slapped together and may not be 100% accurate, but it shows the picture.
Anyways, to carry on, comparing the PAYE vs LTD Contractor route, I did an online calculation based on 38’333 and here are the results.
Gross Pay £38,333.00
Tax free Allowances £9,440.00
Total taxable £28,893.00
xTax due £5,778.60
National Insurance £3,670.20
Total Deductions £9,448.80
Net Wage £28,884.20
Employers NI £4,227.91Not bad compared to the £36’288 that Mr LTD CO has in his bank! But, as everyone keeps reminding me, You get a few weeks holiday pay - not sure what that is worth but I am sure as hell nowhere near the £7403.80 that Mr LTD Co has in his account.
PLUS - I did an equal calculation there, but typically a LTD Contractor and PAYE Employee would not be on the same rate of pay.
thats very interesting thanks like you i dont think holidays come in to it as there paid at basic rate so not that good i have had some work offerd to me as self employed i think i need to look into it further
bjd:
thats very interesting thanks like you i dont think holidays come in to it as there paid at basic rate so not that good i have had some work offerd to me as self employed i think i need to look into it further
Not everyone on here agrees with the LTD Company model on here, but 1 thing that I am sure we all agree on is STAY AWAY FROM THE PARASITIC UMBRELLA COMPANIES!
Forgot to mention that 
Agencies will try to sign you up to them as some pay referral fees, then you pay them £20+ a week for doing next to bugger all.
no i wouldent work through an agency as you say they are waist of space i have an offer of self employed work direct for someone
Im on Ltd been advised that unless your on 70,000 + you dont need to get involved with VAT.
Knocking on companies doors isnt that easy down here, had lots shown interest before now ive done
it they are not so keen. Also if you have done agency work be careful not to pinch they’re clients
or they might bite back.
the work i have on offer is quiet specalized so wont be pinching off anyone else
Trucker56:
Im on Ltd been advised that unless your on 70,000 + you dont need to get involved with VAT.
You don’t NEED to register unless your turnover meets the registration threshold… but considering you can invoice 20% VAT (which your clients can/will reclaim), and you can then pay only 10/11%, by registering for the flatrate VAT scheme… then registering is a no brainer.
Oh, you (ahem, I mean the company 
) can save up to £2000 in employers NICs too, per year, as your ‘small company’ will most likely be eligible for the ‘Employment Allowance’, by employing yourself gov.uk/employment-allowance
You could pay up to £22448 in salary/ies (if she doesn’t already work… why not pay her indoors a salary too, for dusting, filing… or something) and still have an Employers NICs liability of zero. £10k tax allowance this year, so why not bang a chunk of your dividend into a pension, tax free, as an employers contribution. That, in itself attracts tax relief too.
Personally, I’d pay myself £10k, the OH £10k, and bang a few grand into a pension scheme. Anything left will be taxed at CT rate, then have a 10% dividend tax to pay.
HTH
Figures look impressive,is this based on using someone else’s truck, fuel plus maintenance if so then wow that’s earning but if its owning own vehicle where’s the running costs…ie maintenance, fuel, road tax…etc goods in transit insurances the list goes on…think ya 28k profit will soon get swallowed up by all of the above costs and leaves very little salary for you
What happens if a self employed driver like this has a scrape, or goods get damaged in transit, etc?
bjd:
Morning all have any of you started out on your own as a self employed driver ? is it worth doing ? do you find work easy to get ? other than no holiday pay are there any drawbacks thanks in advance
The 1st question you should ask yourself is, if you where to go S/E how long term do you figure on working this way, 1yr, 2yrs or more?
Andyroo:
What happens if a self employed driver like this has a scrape, or goods get damaged in transit, etc?
Thats a very good question. I’ve no idea if its a typical answer ( i suspect not) but you can see here what some companies expect from a “contractor”…
viewtopic.php?f=7&t=112221
Trubster has took the time out to do the Math, and its a very good informative post. The other questions will want answering as well though, from the person who is hiring you.
Blimey, that’s a bit crappy.
It needs a lot more looking into for sure its just something imm looking into i havent made my mind up yet after gaining a bit more imfo ill have chat with an accountant
Andyroo:
Blimey, that’s a bit crappy.
My jaw dropped when i read it !! I suppose the advice has to be do your home work thoroughly before you embark on it as all situations can be different !!
Thinking about it, I’ve had a few new domestic appliances delivered over the last few years and the drivers have never been all that cheerful.
But then again I’m not always all that cheerful either.
Andyroo:
What happens if a self employed driver like this has a scrape, or goods get damaged in transit, etc?
You need it sort that out with the client and have it in writing who will be liable for damages/loss, but in most cases you/your insurer will have to foot the bill.
If you do it right you won’t pay any ni
And on figures above would save £1200 year
This yeAr now pay basic of£153 a week then no tax of ni to pay
Personally or employers ni
Still get yr pension contributions as your on low wage
Etc
Frs for vat is a good idea as stated if you don’t
Get many variable supplies
trubster:
£9,440 Salary - No Tax, NI @ 12%
£7’000 in expenses payments
How does that work then; that would be £786.66/month salary, considerably less than minimum wage? Do you add a 12th of your expected end result dividends on top or keep some of last years profit to ‘top up’ your earnings or what? Or is that what the £7,000 expenses is for?
Surely it’s illegal to pay yourself below minimum wage. This is the only thing i don’t understand about being self-employed.
When setting up do you need that £7,000 as capital to fund the first year?
Also, what can you class as expenses? Is it like: £x.■■/per mile x milage + meal expenses + parking etc…? What do companies usually pay for, is it just wagon + fuel? If you need to fill up with diesel do you pay and charge them for it or do they give you a company fuel card?
parkus:
trubster:
£9,440 Salary - No Tax, NI @ 12%
£7’000 in expenses paymentsHow does that work then; that would be £786.66/month salary, considerably less than minimum wage? Do you add a 12th of your expected end result dividends on top or keep some of last years profit to ‘top up’ your earnings or what? Or is that what the £7,000 expenses is for?
Surely it’s illegal to pay yourself below minimum wage. This is the only thing i don’t understand about being self-employed.
When setting up do you need that £7,000 as capital to fund the first year?
Also, what can you class as expenses? Is it like: £x.■■/per mile x milage + meal expenses + parking etc…? What do companies usually pay for, is it just wagon + fuel? If you need to fill up with diesel do you pay and charge them for it or do they give you a company fuel card?
I think you have got it a bit wrong, I will explain the best I can
Below Minimum Wage - The National Minimum Wage is a something that a company director is not entitled to, so this does not apply.
Balancing the books is what the accountant gets paid to do, I can draw down on any amount at any time, as a “Director’s Loan” and at the end of the year it all gets worked out by the man in a suit.
£7000 Expenses was a rough estimate again, this is as you pointed out, ■■ miles @ xxp/mile, Meals, PPE, Uniforms, Laundry, Paper, Phone Bills… The list is potentially endless. - Effectively, everything you can put down as an expense is 20% cheaper as you get 100% tax relief, so you don’t have to pay the corporation tax on that amount. Ever wondered why just before April, many big companies go on a spending spree?
Not my truck so fuel card is nothing to do with the LTD Co Driver.
Hope that answers your questions.
Oh, and Welcome to TNUK 