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Joey
I have been self employed since 1978 and I am pretty sure that you will not meet the criteria required by the Inland Revenue if you are just driving for this one guy they will class you as being employed and come onto you and him for the shortfall in N.I. and tax .
All you need to do is just go along to your local tax office, you don’t need to make an appointment just walk in and ask to speak to a tax officer, who will if necessary get clarification from his/her tax inspector, take all the facts and figures with you, I’ve never had any bother with them, they don’t want you to get it wrong nor do they want anything they are not entitled to.
Best of luck mate
Tony
Joeyd,
As Tony said I think you’ll need some advice, and I agree that generally the TAX and NI people want to make sure things are on the level, so they can be helpful. Having been self employed for a number of years I always try and invoice several different companies for ‘services’, in my line, marketing consultancy. That way I am not working for just one company - although in practice I only contract for one company for months at a time.
I seem to remember reading somewhere that if more than 75% of your time if spent working with one company you will be seen as being employed by that company and technically not be self employed.
As I said I do other things as well as driving but the way I have been able to get around it is with contracts that state that I am providing a service, in this case driving, and will provide my own equipment if required and can send another as my replacement if required. This makes me a supplier to the client and not jus another employee.
Now whether this will work within transport, I don’t know, but its worth a try. The other thing I also do when I am contracted for one company for a long period, is invoice other companies, such as friends for services, and they could invoice you back,
You also need to keep in ming that , depending on how you set-up you could become an employee of your own company, so when you pay NI, you will have to pay employers and employees NI, amounting to amout £300 ish if you want £1000 a month in your account. This is certainly the case for me, but perhaps its because I am a limited company, as a sole trader I don’t think you’ll have that problem.
With regards the lack of experience, I have only had my licence since last September myself, so its good to see some employers giving new drivers a go, although having just completed setting myself up as an owner driver for international work, insurance for me is quite staggering - I’ll be paying £1200 per month, so don’t be surprised if the boss starts sucking air through is teeth!
Good luck.
regards
Paul
Things the Inland Revenue may look at are:
Who decides the hours you works? If you are told when to work, then they could say you should be employed.
Who provides your wagon and pays the running expenses? Obviously you would not be paying them, so this would be another way they could class you as being employed.
As TonyW said, if you did go self employed and the Inland Revenue came along and said you should be employed, you could become liable for the shortfall in tax. The company you are working for would also be liable for the loss in employers National Insurance. They may also wish to charge penalties which can be as much as the tax itself.
Go to the Inland Revenue and if possible get something in writing, just to be on the safe side!
Everything you need to know about whether you are self employed or employed can be found on this page.
The most important bit for being self employed is covered by the questions on this section of that page.
Joeyd,
I am in a similar situation to yourself and have looked at going self-employed. Its likely that you would fall under the IR35 rules which the Tax man uses to ensure that he recovers pretty much the same NI and Income Tax as would be the case if you were employed.
The tax man cannot prevent you going self emploeyd if the “employer” agrees but thay can insist you operate under IR35, including recovering from YOU the EMPLOYERS contribution to NI. So you need to factor that into the hourly rate.
Search on the IR site for IR35 or better go talk to them face to face.
Cheers
.
I’ve been self employed, on & off for several years now & driving is not regarded as self employed by the Inland Revenue, unless you work in the building trade.
As said above you would also find that working for one employer would stop you, again unless you work in the building trade.
If you do not work more than 3 days per week for one employer, if you can prove you are working for a variety of customers, if you are able to show, in your tax returns, that you are driving HGV’s as part of your business then you are self employed.
I have had a Taxi Licence & done odd days work as such, I have run my own van & never really made any profit from it & as a Bricklayer I’ve done the odd, very odd, building job.
It’s all about abiding by the IR’s rules even if that means looking as if you are.
£1200 a month ■■ has that stopped you going ahead or will you be able to cover it ? and will it come down each year (sort of no claims bonus if there is such a thing for lorries)
Joeyd,
it could have put the stops on the plan, but I had anticipated it being high, but not that high. Although it is very expensive, I don’t see any way around it. It comes down to about £6k for UK only work, and should come down 20-30% - with a fair wind - after a year. But I haven’t lumbered myself with HP payments on the truck, so the plan is workable - just!
Paul