Winseer:
(2) The overheads and things you can’t claim legally, make self-employment pay below minimum wage - and legally - because it’s all dressed up to look like you’re going to be coining it in… Well, perhaps if you were on £40k+ and avoiding the taxes on THAT… But otherwise?
This is the bit I can’t quite get my head around. Ok, let’s try this; a PAYE driver and a LTD Co driver earn for example £600 for a weeks work, the PAYE driver will pay roughly a third of this to the Govt in tax and NI leaving him with £400. The Ltd Co driver will pick up around £550 (admittedly with clever accounting), so there’s a £150 difference average per week. Lets extrapolate that over 48 weeks (taking into account 4 weeks holidays) and the PAYE driver has banked £19200 plus say £2000 holiday pay. Meanwhile the Ltd Co driver has banked £26400 plus zero holiday pay. Now maths aint particularly my strong point but even I can see a big difference there.
Mike-C:
the maoster:
I’m an employee of my own Ltd Co. Last week my top line was £800 and after stoppages I banked £760. Now I know that’s a tax fiddle, you know it’s a tax fiddle and HMRC know it’s a tax fiddle. My gut feeling though is that this is the pill the Govt have to swallow as the people who pull their strings are obsessed with keeping cheap labour available to them. So to this end I believe that HMRC have been told by the Govt not to target these pretty much bogus operations.
Will it last? I very much doubt it, but in the meantime I want my piece of the cake, and will continue to do so until my hand is forced one way or another.
That all looks good to me except for one thing i havn’t seen mentioned. “employee liability insurance”, i thought it was compulsory to have it ?
My accountant provides it as part of my £19 per week Mike. Tbh, if they didn’t then I certainly wouldn’t bother either as afaik it isn’t a legal requirement, rather an agency ploy to screw more money out of us.
the maoster:
Mike-C:
the maoster:
I’m an employee of my own Ltd Co. Last week my top line was £800 and after stoppages I banked £760. Now I know that’s a tax fiddle, you know it’s a tax fiddle and HMRC know it’s a tax fiddle. My gut feeling though is that this is the pill the Govt have to swallow as the people who pull their strings are obsessed with keeping cheap labour available to them. So to this end I believe that HMRC have been told by the Govt not to target these pretty much bogus operations.
Will it last? I very much doubt it, but in the meantime I want my piece of the cake, and will continue to do so until my hand is forced one way or another.
That all looks good to me except for one thing i havn’t seen mentioned. “employee liability insurance”, i thought it was compulsory to have it ?
My accountant provides it as part of my £19 per week Mike. Tbh, if they didn’t then I certainly wouldn’t bother either as afaik it isn’t a legal requirement, rather an agency ploy to screw more money out of us.
Yeah if he provides it then alls good, it is a requirement i’m 99% certain, although its not one of them things you’re likley to end up in court for if you don’t have it. I’d be more worried about having it just incase of accident/disability, then at least someone is going to pay you.
I’ll bow to your wisdom on it Mike as I’m honestly not sure about it. From my point of view I can see an o/d needing it as he/she is providing their own tools as it were, but I’d have thought that merely providing labour to use someone else’s (fully insured) tool would negate the need. To be truthful though it’s not something I’ve actually took the time to research.
the maoster:
I’ll bow to your wisdom on it Mike as I’m honestly not sure about it. From my point of view I can see an o/d needing it as he/she is providing their own tools as it were, but I’d have thought that merely providing labour to use someone else’s (fully insured) tool would negate the need. To be truthful though it’s not something I’ve actually took the time to research.
The basic jist is you’re working for a company they need to insure you. The fact its your company does not negate it. Even though you’re insured for the lorry you’re driving by the owner, the basic jist is the employee needs insuring. Its quite cheap anyway, i don’t think its over £200 a year, probably half that.
I’ll take that on board and do some digging. Cheers mike.
the maoster:
Winseer:
(2) The overheads and things you can’t claim legally, make self-employment pay below minimum wage - and legally - because it’s all dressed up to look like you’re going to be coining it in… Well, perhaps if you were on £40k+ and avoiding the taxes on THAT… But otherwise?
This is the bit I can’t quite get my head around. Ok, let’s try this; a PAYE driver and a LTD Co driver earn for example £600 for a weeks work, the PAYE driver will pay roughly a third of this to the Govt in tax and NI leaving him with £400. The Ltd Co driver will pick up around £550 (admittedly with clever accounting), so there’s a £150 difference average per week. Lets extrapolate that over 48 weeks (taking into account 4 weeks holidays) and the PAYE driver has banked £19200 plus say £2000 holiday pay. Meanwhile the Ltd Co driver has banked £26400 plus zero holiday pay. Now maths aint particularly my strong point but even I can see a big difference there.
On £600 via agency with tax relief on mileage of say, 100 miles per week, you’ll get the basic £200pw tax free (from your tax code) plus another £45 from the mileage, meaning you’ll pay tax & NI on the £355 that remains, which amounts to around £110. You can get more off with receipted meal allowances as well Thus, you take home £490 rather than the £550 you mention for self-employed, - BUT you’ll also get holiday pay from a pot that’s added to by the employer (rather than you) at 12.07% of taxable pay per week… And there’s no accountant to be paid, no umbrella fees to be paid, so that’s it - you’re done. 4 weeks holiday with 48 weeks worked is pretty much the same as being paid 12% more as well, and if you add the 12% to the £490 - you’ll get oddly right on top of the £550 - but without all the hassle associated with DIY…
Best of all, PAYE makes it better when you end up doing less hours than max in a week for any reason. If you only did £245pw in this example, you’d pay no deductions whatsoever. If you did 2 days on self-employed, you’d still owe the full accountants fees, umbrella fees, or whatever.
My thinking is that if you can get regular 40+ hours a week - why on earth can’t a full time job be created for the driver in question, instead of all this “shirk all liabilities” stance that yards seem to want to take nowdays?
Overall, it’s probably a horses-for-courses argument to be sure. Over the next few months I’d expect the hourly rates for odd shifts to increase before that of regular hours ie. whole weeks - because of the large number of people that work on fee-paying payroll schemes not making the working of odd shifts viable otherwise. 
Well not being an expert all I can say is what I see, eg, I did only one day (through choice) the other week, my top line was £135 and my total deductions that week for accountants fees etc was £9.
I also see the PAYE guys at my place driving the same lorries, doing the same work, the same hours, the same nights out etc as the s/e guys and they pick up around £200 per week LESS than us. It’s all there in black and white. We can bandy figures around all day long but it’s what goes into the bank every Friday that actually counts.
If you are a sole director and you are the only majority shareholder employing no one else then you DO NOT need and are not required by law to have employer liability insurance. Likewise, DO NOT use umbrella companies you will be ripped off, it is exceptionally easy to run your own limited company but like everything in life do your homework and don’t get your answers off Wikipedia !!!
splashdown:
If you are a sole director and you are the only majority shareholder employing no one else then you DO NOT need and are not required by law to have employer liability insurance.
Beat me to it. I don’t understand why he’s an employee of his own company in the way he’s doing it. Makes no sense at all unless we’ve only got half of the story.
the maoster:
Well not being an expert all I can say is what I see, eg, I did only one day (through choice) the other week, my top line was £135 and my total deductions that week for accountants fees etc was £9.
The more I read what you`ve previously written on this thread leads me to believe that you may be using the services of an umbrella accountancy service, many of whom provide various insurances, inc employer liability insurance.
You may very well be correct Pierre, and over the years I’ve read a lot of stuff that you’ve posted on this subject and have shown yourself to be very clued up in this area, so I will bow to your knowledge in this field.
To be perfectly honest I’m bone idle about stuff like this and the bottom line to me is, well, the bottom line! As long as I’m happy with that then all is good. 
the maoster:
I’ve read a lot of stuff that you’ve posted on this subject and have shown yourself to be very clued up in this area
I try never to put myself into situations without knowing the details, and only got into Ltd co status once I was in full possession of the facts, & ability to run it without anyone else`s help.
So I guess that defines me as “clued up”
splashdown:
If you are a sole director and you are the only majority shareholder employing no one else then you DO NOT need and are not required by law to have employer liability insurance.
You’re 100% correct, Employers’ Liability (Compulsory Insurance) Act 1969 makes it an exemption. I just checked
I’ve just finished my first year as a Ltd company driver I’m also Flat rate Vat registered which helps make me between £50 to £80 a week better off. At the moment I give my services to a company 5 days a week & they pay my company if I work any weekends i go through an agency who pay my company so I’m getting paid by 2 different company’s which is a little better than working for the same company all the time. I have Public Ltd Insurance not that you have to but just outta choice which costs me £17 a month so it’s not too much you don’t need employee insurance.
I’m still not 100% clued up on everything yet but this new company I am supplier too have me on a 60 day pay contract which in the short term is crippling me ( started end of May) as only just received my first invoice payment so had nothing for 2 month’s but in the Long run I will be a lot better off.
I send them an invoice weekly but have to pay myself monthly so won’t be until the end of August before I start seeing the benefits off my work.
Before May I was going through an agency and was a little better off than paye this way I will be a lot better off as I am now being paid what I feel I’m worth.
essexandy1963:
I’ve just finished my first year as a Ltd company driver I’m also Flat rate Vat registered which helps make me between £50 to £80 a week better off. At the moment I give my services to a company 5 days a week & they pay my company if I work any weekends i go through an agency who pay my company so I’m getting paid by 2 different company’s which is a little better than working for the same company all the time. I have Public Ltd Insurance not that you have to but just outta choice which costs me £17 a month so it’s not too much you don’t need employee insurance.
I’m still not 100% clued up on everything yet but this new company I am supplier too have me on a 60 day pay contract which in the short term is crippling me ( started end of May) as only just received my first invoice payment so had nothing for 2 month’s but in the Long run I will be a lot better off.
I send them an invoice weekly but have to pay myself monthly so won’t be until the end of August before I start seeing the benefits off my work.
Before May I was going through an agency and was a little better off than paye this way I will be a lot better off as I am now being paid what I feel I’m worth.
as a matter of interest did it cost much to set up and what are your yearly accountancy fees
Setup for an off the shelf Company registration costs around £19 +VAT. the rest affectively costs nothing, if you do it yourself, which isn`t as daunting as you think.
As the forms can be downloaded online. An accountant will charge £200-£300 to set it all up for you.
Annual accountants fees range between £500 - £650 dependant on what exactly they do for you, but that’s usually only for the once a year accounts, & filing monthly NIL NI & PAYE figures.
Doing your own VAT returns online takes around 3-5 mins, online banking & tax filing simplifies most things. So with the exception of downloading bank statements monthly, quarterly VAT returns etc.
Administering your limited Co takes around 10 mins a week, (not including timesheets & invoicing)
