Ok here is the deal. I have been working for three years now for my agency. Always being payed on the PAYE basis over some “umbrella” company.
Recently following my agency colleagues advice I have registered as an self employed. I have also being told that the agency making it hard to go self employ to everyone- of some reason (my mate told them- you want me as a self employed or you don’t wont me at all -and that how he demand his rights)
Now, couple weeks after him I have registered, received my unique tax ref number and went to agency… What I have being told is that currently they can not change me to self employed because Inland Revenue stop them to do it. As I was explained IR makes some investigation regarding this form of employment/taxing and they are waiting for their decision- till then they stopped registering drivers as self employ and they keep those one that already been registered-as being advised by Inland Revenue.
I have found it difficult to believe because since there is no decision from IR or there should not be any changes because there is no legal basis- or not? Secondly as far as I am concern this is very common way of employment for HGV drivers and my colleagues being working like that for years now.
Can any one make a comment on that. Advice give me some point to argue as myself I am very inexperience in those sort of things.
Thank you very much for getting over my quite long firs post.
I’ll see if I have got the jist of it… ■■?
Working for agency being paid PAYE basis with an “umbrella” company.
Now registered as self employed
Agency saying that the IR will not allow them to regard him as self employed
I think he is asking if the agency is making up this excuse
RULE 1. Never listen to the rubbish that people tell you. Most of them don’t know their arse from their elbows and merely regurgitate the same old misinformed rubbish they heard from someone else. I guarantee that most of those telling you to either are using umbrella companies, aren’t self employed or don’t have a clue what self employment is and its many forms.
Welcome to the world of IR35. Agencies CAN deal with you on this basis but don’t because they’re covering their backsides.
Basically, people were being told to register self employed by agencies. It meant for the agencies that they saved a shedload of money as they didn’t have to pay holiday pay or employers NI contributions (employers pay it as well as you) so it saves them currently about 25% off their wage bill.
Now here’s the rub. It was done solely for the purposes of tax evasion by the agencies (avoidance being legal, evasion being illegal). The “self employed” drivers weren’t actually conforming to HMRC test on self employment particularly the parts which state that you control where and when you work and that you can send someone else in to do the job instead of yourself and must work for more than one customer and were actually classed as employees when HMRC tests were applied. In addition to that, many people were saying they were self employed but hadn’t registered and paid no tax and the Inland Revenue held the agencies liable.
Now that the whole thing has come unwravelled with agencies getting bills for £100,000s for unpaid employers NI and income tax from dodgy drivers, they’ve gone into arse covering mode so the only way they’d take you on is if you were a Ltd Company and therefore IR35 doesn’t apply. It is because of this that “unbrella companies” sprang up.
Your way out of this is to change from Sole Trader and form a Limited Company instead with you being an employee/director/shareholder of your own company - an accountant will advise you on how to set it up. That way, you should be able to sign up with the agency once you’ve got your Ltd Company registration number from companies house.
JFC999:
Gud post conor, now give us an idea of what rates for selfemp and cost of setting up limeted co
Well if the agency are paying their PAYE drivers £8/hr, you want at least £11 from the agency. If they’re only offering £1/hr more than PAYE, as many do, it doesn’t even cover holiday pay so in reality you’re working for less than their PAYE drivers. If you’re going to be approaching hauliers directly, work on around 40-50% more than their hourly pay for their drivers. It may sound a lot but remember that on top of the hourly rate they pay their drivers there’s an additional 11% for holiday pay plus another 12.8% Employers NI so basically £10hr they pay their drivers actually costs them £12.38/hr so all of a sudden that £14-£15 an hour you’d go in with doesn’t sound that bad…
Cost of setting up a Ltd Company? About £40 for Incorporation on average but I’ve seen it for as little as £20. Buy one already made off the shelf, giving them the name for a director and a company secretary and an address for a registered office.
Biker:
Hello to everyone! My first post on the group.
Ok here is the deal. I have been working for three years now for my agency. Always being payed on the PAYE basis over some “umbrella” company.
Recently following my agency colleagues advice I have registered as an self employed. I have also being told that the agency making it hard to go self employ to everyone- of some reason (my mate told them- you want me as a self employed or you don’t wont me at all -and that how he demand his rights)
Now, couple weeks after him I have registered, received my unique tax ref number and went to agency… What I have being told is that currently they can not change me to self employed because Inland Revenue stop them to do it. As I was explained IR makes some investigation regarding this form of employment/taxing and they are waiting for their decision- till then they stopped registering drivers as self employ and they keep those one that already been registered-as being advised by Inland Revenue.
I have found it difficult to believe because since there is no decision from IR or there should not be any changes because there is no legal basis- or not? Secondly as far as I am concern this is very common way of employment for HGV drivers and my colleagues being working like that for years now.
Can any one make a comment on that. Advice give me some point to argue as myself I am very inexperience in those sort of things.
Thank you very much for getting over my quite long firs post.
Peter
There has been a change in the law. This only applies to born and bred Brits now…
Cost of setting up a Ltd Company? About £40 for Incorporation on average but I’ve seen it for as little as £20. Buy one already made off the shelf, giving them the name for a director and a company secretary and an address for a registered office.
First of all. Great job your post, thanks a lot.
The way I see it… I actually don’t care if I am doing a favor to agency by going “self employed” because as far as I am concern it bring more money to my pocket - thanks to expenses claim reducing NIN contribution which is waaay cheaper on “SE” and avoiding weekly charges to umbrella company… which is 22,5£ a week making quite big amount at the end of the year.
I have been told I would be way better off with self employed… but then rise the case with HMRC office.
I know that setting up LTD company take much more effort. I understood that could be partly avoided by buying one already established but I have being told that it still require some more money and effort to manage it -is that correct?
Being paid 11£/h on PAYE basis what would you recomend me to do? Stay the way I am, set up LTD or wait for decision from IR/HMRC and chceck if “self empolyed” path is still open.
In addition, i know that none of my mates that went self employed hasn’t being payed higher rate then PAYE should they demand it?
44 Tonne Ton:
There has been a change in the law. This only applies to born and bred Brits now…
Haven’t you got a KKK meeting to go to? Go stand over there with the rest of your dumbass BNP mates -------------------------------->>>>>
Never voted BNP in my life. You might be happy to take it up the chuffer from our east european contingent, I ain’t! There is a first time for everything though…now why don’t you trot off to a Peter Tatchell soiree■■?
I am SE and have been for well over 20 yrs. Don’t see the need to be LTD myself, though I don’t work through agencies and don’t intend to start. I work direct. LTD just wouldn’t work for me.
DoYouMeanMe?:
I am SE and have been for well over 20 yrs. Don’t see the need to be LTD myself, though I don’t work through agencies and don’t intend to start. I work direct. LTD just wouldn’t work for me.
Indeed. Every person is different. It depends on what you’re doing, who you’re working for and what risks you’re exposing yourself to.
“Phil the book” is also spot on. It ain’t all its cracked up to be if you’re just looking to save yourself a few bob. A lot of agency drivers seem blisfully unaware that they can actually claim mileage (which is by far the biggest expense you’ll claim) on PAYE anyway without having to use umbrella companies or go Ltd. Basically, if you’re a mobile worker and don’t have a fixed place of work (i.e you travel from your home to the client and not from your home to the office and then to the client) or travel to the same place for a period which is about 3 months OTTOMH, you can claim mileage at normal HMRC rates for travel between your home and the client. Only downside is that you can’t claim it until the end of the tax year at which point you have to complete a P87 (employment expenses) and ask for a refund. You still need to keep mileage records as a self employed person would. Been doing that every year I’ve worked for agencies. Remember as well that the expenses also count as coming off your PAYE income so for tax credits ,for example, you’d say your earnings were what you got on PAYE less the amount you claimed on the P87.
To 44 Tonne Ton, I notice you don’t say owt about the “Brits abroad” who are doing exactly the same on the continent. Lots of Brit lorry drivers in Afghanistan and Iraq for example taking work off people who are far poorer and need the work more than we do… I’d hazard a guess and say there’s more of us spread across the world taking jobs off natives than there are immigrants here taking “ours”. Oh and you only have the right to complain when a film crew can no longer go to a place like Peterborough, stand outside a dole office and offer dolies work at £7/hr only to be told they won’t do it and would rather sign on cos its harvesting crops or working in a food factory and its a bit too much like hard work.
very interesting posts!
Here’s my experience:
I got fed up with trying to sort out corrections to my pay (PAYE) when the agency, the client or myself made an error.I went on to the Companies House website and made myself a Ltd Co. Can’t remember cost but under £50. Phoned Taxman and told him I had changed to working for my own Ltd Co and that I would do a “self assessmsnt tax return at the end of the year” May I state here that I am proud and grateful to be born and bred on this sceptred Isle and want to pay my fair share of tax and NI.
I toldthe agency I was limited and tried to get my hourly rate increased by a pound an hour. This maybe worked when times are good but I seem to work now for £8.50 per hour (x1.5 after 8, + £1ph nights, +£1ph for hiab work). I think this is well beneficial to the agency so we are pals. At the end of the week I fax an invoice to the agency, each line showing: date, client, start-finish, hours, rate and total. Also parking, tolls, overnights and other expenses. This is totalled at the bottom of the invoice. Any disputes are quickly and simply resolved, usualy by me raising a credit note. All these are then filed and paymwnts from the agency reconciled with these invoices and credit notes.
So far, the agency is winning! At the end of the year the Company has to send accounts to the taxman and to companies house. You can do this yourself as you will be under the threshold which requires an accountant. Then the fun begins! The taxman sends to me a self assessment tax return form although I prefer to do it online. Adding up all your invoices (less credits) gives you your income on which you have to pay tax and NI. BUT first you deduct: the cost of travelling from your office (home) to work at (I think) 42p/mile for the first 10,000 miles, thereafter 25p/mile., the cost ofyour working clothes and boots, their repairs and laundry, your phone, fax, broadband bills, your office expenses (heat light, furniture etc,)
Euro, I think an hour spent with a tax accountant might be beneficial to you to get it all set up properly to your advantage as I think you may be paying way too much tax. HOW I THINK THIS WORKS - The way I think my mate does it is to pay himself NMW for a set amount of hours through his Ltd company to keep him below the personal tax allowance so that he pays no income tax. The Ltd Company pays corporation tax on the amount of profit (income less his wages, expenses etc) which is 10% OTTOMH and half that of Income Tax on the same amount. He then draws profit from the Ltd company, I think as a dividend.
But I could be wrong. I know he explained it and it sounded a bit complicated and convoluted but he said once it was up and running it was easy to do. The net result is that you should only end up paying 10% tax above the personal allowance instead of 20% or whatever it is this week.
… got called away. The point is their are a lot of fair and genuine deductions to be made e.g. the taxmans allowance for daily subsistance (lunch) if you are working away from home, trade journals,…
There are others on this site who are better qualified than me to list all the allowable expenses BUT
there is another side to this.
i. WTD when does your duty time start?
ii. Drivers hours - when does your duty time start?
iii. Have you sacrificed all your workers’ rights protection as an employee?
iv. Who is liable if you cause damage
v. are your “wages” protected if the agency folds?
vi. the agency may want you to sign “terms and conditions” but will not want to sign your tems and conditions.
So, I am working for Me Ltd whos is working for AN Agency Ltd who has lent me to Nearer Agency Ltd who is suplying me to Client Haulier Ltd who has a contract with Bigshot Contractor Ltd who is doing the transport Fatcat Plc when I deliver their goods to Cosy-Nest Holiday Homes for Pets (pies) Ltd
But I could be wrong. I know he explained it and it sounded a bit complicated and convoluted but he said once it was up and running it was easy to do. The net result is that you should only end up paying 10% tax above the personal allowance instead of 20% or whatever it is this week.
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agreed! dividends are taxed at a lower rate.
Euro:
i. WTD when does your duty time start?
ii. Drivers hours - when does your duty time start?
iii. Have you sacrificed all your workers’ rights protection as an employee?
iv. Who is liable if you cause damage
v. are your “wages” protected if the agency folds?
vi. the agency may want you to sign “terms and conditions” but will not want to sign your tems and conditions.
i) You’re self employed, the WTD doesn’t apply.
ii) As it does if you were on PAYE.
iii) Yes
iv) Depends on what you have put in your contract. In mine, I stated that my company, its employees and representatives were not liable for any damages, costs or losses arising as a direct or indirect result of the actions of any representative, agent or employee of the company.
v) Only in so much that you are deemed a creditor by the Insolvency Practitioner assigned so stand as much of a chance of being paid out as anyone else.
vi) So don’t go with them.
I’d hazard a guess and say there’s more of us spread across the world taking jobs off natives than there are immigrants here taking “ours”. Oh and you only have the right to complain when a film crew can no longer go to a place like Peterborough, stand outside a dole office and offer dolies work at £7/hr only to be told they won’t do it and would rather sign on cos its harvesting crops or working in a food factory and its a bit too much like hard work.