Hi,
I am a self employed driver working on agencies. I am sole trading not a ltd company. recently I have registered on a couple more agencies but I seem to be having a problem staying self employed.
They are all saying that I must use an umbrella company or go PAYE with them. They are blaming it on this new directive that’s come in. I didn’t really want to go down this route as I only drive weekends and really don’t want to pay another company a fee to do a job I’m quite capable of doing myself.
I know if I want the work I will have to bite the bullet. has anyone any advice on which route to go and which umbrella company is the best value.
Many agencies now insist on you either working through an unbrella company or having your own Ltd liability company as a means of saving them employers N.I and other employer costs. These umbrella companies act as your employer in most respects ie tax deductions, public liabilty insurance etc and are often far cheaper both in cost and effort required than running your own Ltd company.
Hello All
I was advised to go with an umbrella company last year and have found them to be ok I only pay them when i earn over a certain amount .and then its about £17 but i dont have to worry over anything at all i get petrol alowance of 45 p a mile first 2000 miles i travel then 25 p a mile after that £ 5 a day meal alowance and a lot of other stuff including some form of insurance … all i have to do is send in my expences form and reseipts for extra expences i.e sat nav /mobile phone bill / weekly .dont even have to send send petrol reseipts .
So Im happy but its not everyones cup of tea Im with PML Accounting they are on line …have a read …
I would say that a truck driver would find it very hard to convince the HMRC that they are self employed.
It is the same for lgv instructors. Unless the instructor is providing their own training vehicle then the training company should be paying their PAYE contributions
burnie1:
I would say that a truck driver would find it very hard to convince the HMRC that they are self employed.
It is the same for lgv instructors. Unless the instructor is providing their own training vehicle then the training company should be paying their PAYE contributions
Not the case if the Instructor is working for more than 1 company and are not working on a full time basis
YAMBOL57:
Hello All
I was advised to go with an umbrella company last year and have found them to be ok I only pay them when i earn over a certain amount .and then its about £17 but i dont have to worry over anything at all i get petrol alowance of 45 p a mile first 2000 miles i travel then 25 p a mile after that
burnie1:
I would say that a truck driver would find it very hard to convince the HMRC that they are self employed.
It is the same for lgv instructors. Unless the instructor is providing their own training vehicle then the training company should be paying their PAYE contributions
Not the case if the Instructor is working for more than 1 company and are not working on a full time basis
It is not as easy as that. That is the common myth but in fact there are several other questions that need to be answered such as can the instructor choose where he does his job, the hours when he works, can they get someone else to cover a job whilst they do another? In most lgv instructors cases the answer to these questions is no which indicates in the hmrc eyes that there is a low degree of substitution and a level of control over the worker. Add the fact the instructor does not pay for the vehicle, maintenance, fuel and insurance then the level of financial risk is low. This all indicates that the instructor is employed.
If this is the case and a taxman makes a visit to the training company the tax man will ask for the PAYE contributions that should have been paid along with a penalty of upto 40% of the claim.
Here is the tool that can help decide if you are employed or self employed hmrc.gov.uk/calcs/esi.htm
It used to be described, in horrible old fashioned terms, as “servant and master relationship”. ie, as stated above, if the person is at the “beck and call” of the “employer” then they come under PAYE.
I know of a coach operator that was put out of business when the taxman came to call and demanded all the PAYE for all the “cash in hand” drivers over several years. Not quite the same - but nevertheless - scary enough to keep me on the straight and narrow!! Pete
YAMBOL57:
Hello All
I was advised to go with an umbrella company last year and have found them to be ok I only pay them when i earn over a certain amount .and then its about £17 but i dont have to worry over anything at all i get petrol alowance of 45 p a mile first 2000 miles i travel then 25 p a mile after that
It’s 45ppm for the first 10,000 miles.
Agreed, i thought it was the 1st 10,000 miles @ 45ppm … looks like they are not that good huh… for 8000, they are taking 20 ppm off of you!!!
I signed on with an agency a couple of weeks ago and they got quite shirty when i questioned signing all the agency paperwork and then a contract of employment for another company who the agency say look after all the pay.
The alternative was to be a ltd driver but after talking to other drivers from the agency was told they pay you an extra pound an hour but then take a chunk of this back in admin charges.
Is this normal for agency work these days? Its been 4 years since my last agency and they paid you themselves.
The agency im with pay through an umbrella scheme with NWM and they take a whole waft of stuff off your wages like public liability insurance and all that.
LGVTrainer:
Many agencies now insist on you either working through an unbrella company or having your own Ltd liability company as a means of saving them employers N.I and other employer costs. These umbrella companies act as your employer in most respects ie tax deductions, public liabilty insurance etc and are often far cheaper both in cost and effort required than running your own Ltd company.
As for best value it is a case of comparing their charges and what they provide for that cost.
Hi haribo4000, I’ve used these umbrella companies in my past life within the construction industry and found them to be very good. They will fight your corner if there are issues over time sheets/ money problems. The two I’ve used I would recommend them to anyone .
I know they take a small fee, but to be honest they offer a service and you need to find out what exactly they offer and see if your happy with it. There’s no harm shopping around to find the best one for your situation.
YAMBOL57:
I was advised to go with an umbrella company last year and have found them to be ok I only pay them when i earn over a certain amount and then its about £17.
I dont have to worry over anything at all i get petrol allowance of 45 p a mile first 2000 miles i travel then 25 p a mile after that £ 5 a day meal alowance and a lot of other stuff including some form of insurance … all i have to do is send in my expences form and reseipts for extra expences i.e sat nav /mobile phone bill / weekly
dont even have to send petrol receipts .
So Im happy but its not everyones cup of tea.
More fantasy but agreed that its “not everyones cup of tea” because some Drivers are better off on PAYE. I wonder who advised you to go Umbrella - How much are they making out of you ? Your £17 is cheap because some charge £30 per week.
The tax free travel allowance is 45 pence per mile for the first 10,000 miles per annum then 25 pence per mile after that. But you don’t get the 45 or 25 pence. You only get the tax and national insurance that you would have paid on those amounts. That is 20% tax and 9% National Insurance. So you only benefit by 29% of 45 pence and that is 13 pence. It must cost you more than 13 pence to travel so you’re not making money out of it at all. Some people fiddle their mileage but some have been caught and have to pay a hefty price. HMRC are having a clamp down on all this and will be requiring more receipts from self employed people in the future. They will also increase their random checks on distances from home to place of work. Take heed of the small print warnings from some of these Umbrella companies and remember that they’ll keep your 30 quid a week even if you do get a hefty bill and fine for unpaid back tax and fiddled claims.
The same applies to the meal allowance. The Tax Man is not treating you to any free meals. You shell out a fiver for a meal and he’ll let you off with £1.45 tax and insurance. It’s still cost you £3.55 but you could have enjoyed a coolbox full of goodies from home for less than that.
And don’t forget the Holiday Pay that you have lost. That can be worth £65 per week for 46 weeks of the year. (That’s based on actual true figures of £2995 for six weeks holiday taken in 2011/2012 - and 6 weeks off means that it had to be earnt in 46 weeks.
And finally - these tax free allowances can also be enjoyed by PAYE agency Drivers anyway - but many Drivers simply do not know about them. And they are actually worth MORE to PAYE agency Drivers than self employed because they get 32% back, not 29%.
Yes - not every ones cup of tea so only use an Umbrella if it’s raining.
I was with an umbrella company when I first started 10 years ago (anniversary anyone?). I was with them for several years and found that they provided a reasonable service BUT
Payments were sometime late (as I was slightly late getting my expenses sheet back to them)
It is actually quite costly - £20 per week = £1040 per year!
Yes you don’t have the big tax bill at the end of the year (they effectively hold on to the tax until it is time to be paid and give you the remainder). This means they also get the interest on YOUR money (and the tax money until it is paid)
I left the umbrealla company for the reasons but also because they say “we have lawyers who work with us”. What they mean is they have lawyers to protect themselves (NOT YOU) in the event of a tax investigation. The Revenue don’t like these umbrella companies and plenty have been stung before in the past for Tax and NI going back years and the umbrella company have done NOTHING to help them.
I switched to a local accountant who proved expensive (very) then to Tax Assist who were great but also a bit pricey (some added extras hidden in there as well). I then switched to www.hgvaccounts.co.uk who I am with now. So far so good.
All I will say is I tried umbrella (JSA) for a few weeks when I was on class 2 work. It was a shambles and they don’t like you questioning them about NI and tax. I came off and went PAYE when I started doing class 1. Guess what? just been informed by HMRC that I am going on emergency tax rate at 40% because I have not been paying the right amount tax!
davidmonroe:
I was with an umbrella company when I first started 10 years ago (anniversary anyone?). I was with them for several years and found that they provided a reasonable service BUT
Payments were sometime late (as I was slightly late getting my expenses sheet back to them)
It is actually quite costly - £20 per week = £1040 per year!
Yes you don’t have the big tax bill at the end of the year (they effectively hold on to the tax until it is time to be paid and give you the remainder). This means they also get the interest on YOUR money (and the tax money until it is paid)
I left the umbrealla company for the reasons but also because they say “we have lawyers who work with us”. What they mean is they have lawyers to protect themselves (NOT YOU) in the event of a tax investigation. The Revenue don’t like these umbrella companies and plenty have been stung before in the past for Tax and NI going back years and the umbrella company have done NOTHING to help them.
I switched to a local accountant who proved expensive (very) then to Tax Assist who were great but also a bit pricey (some added extras hidden in there as well). I then switched to hgvaccounts.co.uk who I am with now. So far so good.
Hope this helps
This sounds like a ad for this firm, paying them £45 + Vat per month no matter if you work 1 day or 25 seems very expensive to me when most things you can do yourself.
.dont even have to send send petrol reseipts .
