Just been offered a job but its self employed… cushy job but thought of being self employed seems a bit scary… Any tips anyone re paying tax NI etc please 
Dave
Be very careful about this, if you work for the same person all the time then the Revenue will be likely to regard this as “disguised employment” under IR35 rules.
if your unsure in any way, walk away…
As Harry mentioned the IR35 rules are worth looking at, but if you set yourself up as a limited company you can invoice who you want, but be creative. HMRC will start looking at your true status if you work solidly for only one company. Chuck in invoices for some days/work for other companies - there are always other self employed drivers who are in the same boat swapping invoices can be a good way around it.
Having said this, as long as you pay your NI and PAYE there should be no reason for HMRC to come sniffing around.
I’ve had a number of self-employed drivers working for me and as far I know none of them had any problems, and one worked solidly for me for 18 months on tours and exhibition work.
I used to be a IT contractor and when IR35 was introduced, in order to clampdown on one-man-bands working for one company for years, but within days there were ‘IR35 proof’ contracts circulating with creative wording which allowed us to carry on as before - ahhhhh happy days…
Make sure you invoice the client enough to cover the trouble you have to go through to be self-employed. This includes paying both lots of NI stamp, travel that cannot be reclaimed from HMRC because it’s a “regular commute”, and meal expenses when you’ll find yourself skipping meals, or at least not having a sit down public meal each day!
When clients take on an agency driver, they are paying £15-£20ph of which maybe £8-£13ph is passed on to the agency driver.
As a self-employed driver, £18ph is therefore competetive. Anyone offering agency hourly rates to someone having to go self-employed is attempting to rip you off using the SE newcomer’s ignorance of the system to undersell themselves. 
If the firm laughs at the suggested invoices of £18ph, then clearly they were not actually offering a job in the first place - just trying it on instead, hoping to get “a bite on the line” so to speak. 
Wages in the industry won’t rise until ALL drivers stop letting themselves be ripped off by clients who are not prepared to pay their bills and/or agencies who choose to aid and abet the client over the actual working driver that makes “being competetive” merely a race to the bottom all the time. 
Make a stand by refusing to work below YOUR going rate rather than any old rubbish low number made up by a third party. 
As above if you do things correctly you won’t have any NI to pay why do people always bring this up also you should only be paying corperation tax there should me no paye to pay either
alix776:
As above if you do things correctly you won’t have any NI to pay, also you should only be paying corperation tax there should me no paye to pay either
+1
alix776:
why do people always bring this up
probably because too many are mis-informed, taking advice from anyone, and everyone. Without thinking it through, and looking at the overall picture.
Then when they`ve taken the leap, the whole thing comes crashing down around them
alix776:
As above if you do things correctly you won’t have any NI to pay why do people always bring this up also you should only be paying corperation tax there should me no paye to pay either
No idea how you can draw a dividend sufficient enough to live on and not pay income tax.
To the OP:
Put aside 30% of every invoice to give you holiday pay and cover the tax bill.
Conor:
No idea how you can draw a dividend sufficient enough to live on and not pay income tax.
Because its a dividend not wages
My self as a ltd company, I pay myself a 12th of the personal allowance, that this year is £7475, the rest goes on dividends, and the only tax I pay, is corporate tax and because I do charge VAT to my clients, I paid back 10% of it to the tax man.
Is not so complicated as it looks, and add loads of expenses ( all that is possible to add as expenses) and that reduces the amount of tax I pay back, so at the end of the day, I take home more money than I used to, from umbrellas or paye scheme.
Noworries:
Conor:
No idea how you can draw a dividend sufficient enough to live on and not pay income tax.Because its a dividend not wages
You pay tax on dividends at 10% up to £34,370 however there is a 10% credit applied because of the tax already paid in corporation tax on the money paid out as dividends.
In short, no matter how you do it you pay the same in tax as you do on PAYE up to £34,370 - the only thing that changes is the name of the tax. The only thing you save is a bit of NI.
When people put it how you do, others think that it means you pay absolutely no tax at all on that income - i.e earn £20k as a Ltd Company and pay £20k out as a divided and there’s no tax deducted when that is completely wrong - there is £4000 due in corporation tax which is paid before dividends are drawn. Dividends are paid out of post tax profit. In fact on earnings of £20,000 you actually pay MORE out in corporation tax for 2012-2013 than you would in income tax and NI on PAYE by £133.60. In short, you’d be WORSE OFF as a Ltd company for £20k. I think the break even point is about £25k.
connor you would take 20k in dividends you forgetting how the system works ie small wages i think its 6.5k no tax or ni but stamp credited as on low earnings then 10k or so in dividends also dont forget mileage,mobilephone which will be 90% business calls. night out allowance and subsistance meal allowances also if you run a comercial vehicle crew cab van or pick up these class as commercial vehicles and cost of buying and runing these could be more effecient than running a car depending on the mileage you do i would say youd show a 12-15k proffit affter costs and your corperation tax would be about 2.5 -4k depending on how your accounant works it out. if you did things right each year it would be possible to pay no tax what so ever. but think it would take some doing and some very creative accounting
alix776:
connor you would take 20k in dividends you forgetting how the system works ie small wages i think its 6.5k no tax or ni but stamp credited as on low earnings then 10k or so in dividends also dont forget mileage,mobilephone which will be 90% business calls. night out allowance and subsistance meal allowances also if you run a comercial vehicle crew cab van or pick up these class as commercial vehicles and cost of buying and runing these could be more effecient than running a car depending on the mileage you do i would say youd show a 12-15k proffit affter costs and your corperation tax would be about 2.5 -4k depending on how your accounant works it out. if you did things right each year it would be possible to pay no tax what so ever. but think it would take some doing and some very creative accounting
I’m not forgetting at all. Stick £20,000 into an online corporate tax calculator and stick £20,000 into an online salary calculator. You’ll see you come out with £133.60 difference in favour of PAYE.
And as for mileage etc, you can claim those on PAYE if you work for an agency and night out and parking money isn’t taxed.
Of course if you’re running a proper business instead of being self employed as a driver for tax avoidance its a different story.
The big question here is "how much does the average SE driver invoice PH for their services? 
I’ve already said I’d not do it for less than £18ph, so someone make a debate out of it! 
Efficient use of the tax allowances coupled with creative accounting means I’m better off this year than last year despite earning a whole lot less in gross pay… and this works with me on PAYE to boot! Choosing when I work has a lot to do with it - something that many tend NOT to do, as they’re afraid that turning down a shift means they might not be asked back again…
If your getting 18 quid an hour you doing very well then butter agencies are slashing rates to get work normal flat shift rates are about 100 per shift to the agency at a lot of places across lancs and Yorkshire and companies would pay more than this to an agency I get a bit above this as I go direct to companies
What I’m saying here is that if an agency is charging a client £20ph payable to the agency, who then phone the agency driver in at 8-12ph to actually do the work, then if the driver cuts out the middleman and offers to do the same work on a self-employed basis, then there’s no reason why touting £18ph won’t be competetive, since the client are saving £2ph and the driver is getting paid gross enough to make it worthwhile as well.
Being self-employed so that you pay very little in taxes is what has already been described above by wegi.
You pay yourself gross your personal tax allowance divided by 12, meaning you pay no income tax at all on this part of your pay.
However, £150pw isn’t usually enough to live on, even if it’s tax free. This is where all the extra money earned from invoicing for a decent hourly rate comes in:
Let’s say you did 40 hours of work billed @ £18ph. This means £720pw gross to start.
First you offset irregular travel, meal expenses, work clothes, and if you use your own works van, you can submit other expenses against the gross as well, such as putting it though the MOT, and other general maintenance. Let’s say after this you are left with assessable income so far of £400pw, the expense total coming in at £320pw averaged.
You pay yourself £150pw as the “wage”, since you’ll pay no income tax on this amount with a standard tax code given by wegi as an example (most people have one around 800L these days, so you’ll be able to do £160 rather than £150)
With the £250 gross remaining in the above example, you’d then pay yourself a dividend which has payable tax at the basic level no matter how high it goes within reason (corporation taxes). This is the big area where SE gains over PAYE, as effectively unlimited amounts of overtime will result in you effectively paying flat taxrs at lower rates than the higher bracket income tax payable for ordinary mortals on PAYE with any massive amounts of overtime they might do…
Assuming that one really does have the £320 per week expenses layout as suggested here, then clearly if one decides to work for too low an hourly rate, then the wages paid will not cover the expenses, and one effectively ends up paying to go to work. Those expenses need to therefore be maximised (creative accounting) whilst at the same time being entirely accurate - ie no bullcrap claims. Produce the fuel receipts, actually eat meals at work, replace working clothes once in a while, etc. 
You’d best take advice from others with regards to how to do this most effectively for your own circumstances, as there are plenty on here who think I’m a tool for my ducking and diving around what I can claim for, and what I can’t. 
I’ve been doing it for 4 years no good preaching to me but agencies aren’t doing up here for 20 per hour they charging 100 per shift and expecting a 15 hour day
£100 per shift?
That’s a new con… I guess one isn’t within their rights to demand a flat eight when accepting such a shift!
Then of course there’s the “only have monday/wednesday/friday bud” thus keeping you to a 45 hour week, all nice and legal. (They’ll get a second agency to cover the tuesday/thursday/saturday bit!)
Two full-time jobs for less than one lot of full time pay. Sheesh!
Not a con that is how agencies are keeping there drivers in work if you can get 18 ph direct then good for you recently one place I work at had a guy charging 11.00 per hour for 8 hrs the time and half plus night out put a leaflet in it went in the bin is all ill say companies up here just will not pay that sort of rate
100 quid a shift isn’t a con it’s just reality
Nobbies… Taking over the world somewhere near you by the looks of it!
It’s easier to employ people onto your own books at “poor pay+1” rates if the “going rate” for the area is already that low.
Anyone can jump a fence of matchboxes after all.
I reckon a lot of the reason there are no stobbie rdc’s in this neck of the woods has to do with “they won’t afford the going rate” in these parts.
They’d be better off scrapping planners and just letting the professional driver do a professional job again (for professional wages of course!)
Who TF needs ‘planners’ anyway? Is this a northern concept, or just a non-southeastern one?