Self Employed Guys - Advice Please

UK PROFESSIONAL DRIVERS FORUMS THE UK PROFESSIONAL DRIVERS FORUM (INTERACTIVE)
61

Bale Bandit:
Ok, broadly speaking I’m invoicing out at £10-15 more a shift than the PAYE staff at one of my regulars. Between 20 and 23 shifts a month that’s a minimum of £200 a month more than a PAYE driver.

Except it isn’t.

PAYE driver gets paid 10.3% more per week than they get in their wage packet in holiday pay.

So if they’re earning £100 a shift in their pay packet and you’re charging £110 a shift as a self employed driver you’re actually earning the same as them due to the holiday pay they accrue on top of what they’re paid.

No wonder you have plenty of work.

62

NewLad:
I give up!

Edit - At the end of the day as a class 2 driver over 5 days I took home £519 with no nights out, as a Class 1 driver PAYE employed by a company I take home £480 for the same week with no nights out.

You do the maths

If I was a class 1 on Ltd Co my take home would be 70-100 pw more than class 2

Except you wouldn’t be because the PAYE driver would have an additional £60 per week in holiday pay.

NewLad:
My point is in the 6 weeks I was Ltd Co, I didn’t once have to provide a receipt for meals

Only because your accountant didn’t ask. If HMRC did a tax investigation they bloody well would expect you to provide them.

You make me laugh. You were Ltd Co for all of a month and a half and are telling those who have been self employed for years and in some cases like myself over a decade that we’re wrong. You didn’t even do your own books but paid someone. You’re the one who doesn’t have a clue.

63

Conor:

NewLad:
I give up!

Edit - At the end of the day as a class 2 driver over 5 days I took home £519 with no nights out, as a Class 1 driver PAYE employed by a company I take home £480 for the same week with no nights out.

You do the maths

If I was a class 1 on Ltd Co my take home would be 70-100 pw more than class 2

Except you wouldn’t be because the PAYE driver would have an additional £60 per week in holiday pay.

NewLad:
My point is in the 6 weeks I was Ltd Co, I didn’t once have to provide a receipt for meals

Only because your accountant didn’t ask. If HMRC did a tax investigation they bloody well would expect you to provide them.

You make me laugh. You were Ltd Co for all of a month and a half and are telling those who have been self employed for years and in some cases like myself over a decade that we’re wrong. You didn’t even do your own books but paid someone. You’re the one who doesn’t have a clue.

The only person I am arguing with is dieselofshyte who has never been Ltd Co

64

If ltd company and dot it properly
Regardless of what you invoice your customers you can legally
Pay yourself from ltd co

£148 salary week (no ni or tax to pay) pension contrib still added as you on low income
£25 night out allowance tax free
£4 day meal allowance taxfree
Incedtial expense alliwance £5 uk. £10 europe per night out tax free

Anytjing else taken as dividend

Make sure compamy has seperate bank account aswell

Also cannot claim tax free expenses above if self employed
If pay csa they can only go on the £148 not divs or allowances
Freind of mine and not mmtm seen paperwork
Csa dropped from 650 month to £75 for 2 kids

65

NewLad:
The only person I am arguing with is dieselofshyte who has never been Ltd Co

I’m trying to learn from your Limited experience.

I want your 45ppm too.
.
FOOD [/b]
TRAVEL [/b]
MILEAGE RATES
EXPENSES FORM > > > hmrc.gov.uk/forms/p87.pdf
.

66

gettin-on:
CSA dropped from £650 month to £75 for 2 kids

.
Great friend - let some other fokker pay for the 2 kids.
.

67

In fairness his kids dont go without
He buys them everything they need
Just a greedy ex wife he not paying for her lifestyle
Esp when kids turned upto him in rags for visits

School trips clothes etc comp games he buys them
Just her goes without
So yeah let the new bloke pay

68

Dieseldoforme:

the old timer:
If someone earns £10 per hour works 60 hours on PAYE he will earn £600.

S/E earns same £600 but travels 400 miles to do it and

claims 5 X £10 meal allowance and has tickets to prove it.

I have done both and my preference is definetly PAYE.

.
The main point that I would like to get across is that PAYE Agency
Workers can also claim the same meal + mileage tax relief, on the
grounds that they will not work at the same location for over 24 months.
.

With PAYE mileage on agency if you work say 10 miles from your house but the agency is 20 miles from the place of work you can claim the 20 but if you travel to the agency office you cannot claim anything as that is your base, same if the agency has staff based at the place you are working at you also cannot claim.

69

gettin-on:
Also cannot claim tax free expenses above if self employed

Rubbish.

70

Dieseldoforme:
“Don’t listen to Dieseldoforme’s preachings - listen to my preachings instead.”

I’m not preaching at anyone, I’m just saying how it works for me, and how I benefit from it, and recommending anyone considering it takes advice from a professional - not from Trucknet. At least I’m talking from experience of s/emp / Ltd Co, which is more than you are.

71

Dieseldoforme:
.

Great Value for a quid an hour.

I’ve said it before, and I’ll say it again… I get more than £1.00 per hour extra from the agencies I deal with. Even more from direct clients.

So you can drop that argument as well now.

72

mac12:
Then with Herongate he works for his own company so he earns his own money that he then pays to his company that then pays his self so how can his company pay him as much holiday pay as he wants surely he his paying himself if he is not at work 28 days per year he is not earning
quote]

I earn the money as an employee of my own Limited Company - that goes into the Ltd Co’s bank accounts. The Ltd Co then pays me a set wage each month, into my personal bank account, the same amount, every month, no matter how many days I work in each month, or what rate I charge out on (different clients / agencies pay different rates).

The rates I charge allow me to do this as it creates a surplus in the Ltd Co’s account; this gives me “holiday pay”. And dividends, and end of year profits.

73

Dieseldoforme:

Bale Bandit:
Broadly speaking I’m invoicing out at £10-15 more a shift than the PAYE staff at one of my regulars. Between 20 and 23 shifts a month that’s a minimum of £200 a month more than a PAYE driver.

As for invoicing, I keep a diary of the shift/hours I work, I transfer this to an invoice weekly and produce those invoices monthly to all my customers. I offer a standard 30 day payment term although most of my customers pay within 14. Should a customer request a breakdown I transfer the hours/shifts to a timesheet and email it over. None of my customers have queried these timesheets and other than 1 customer about 2 years ago I have had no trouble collecting payment since moving into haulage.

.
Thanks. I don’t want to put you down because I think you have been pretty honest with the figures that you have kindly given us. Unlike New Lad who has come out with a pile of bullshot.

For my part, I genuinely want to see what is best under different circumstances. I think a lot of Drivers have been misled in the past. I did look seriously into all this when the popularity of going SE reached a peak for truck drivers in my area about six years ago. It was then that I discovered that Agency Drivers on PAYE can also get many of the tax allowances that SE get. Back then the going rate was mainly an extra £1 per hour for SE and in many cases it is still the same today EVEN THOUGH PAID HOLIDAYS FOR PAYE HAVE INCREASED FROM 20 DAYS THEN TO 28 DAYS NOW, BY LAW.

A lot of Agencies try to give PAYE Drivers the basic rate for holiday pay when it should be the average pay for the previous 12 weeks. I know this to be correct because I have taken legal action against two agencies and I won both cases.

So, to be fair, I always take PAYE holiday pay to be worth £2800pa, that’s 28 days at an average wage of £100 per day. Call those 28 days - 6 weeks - therefore there are only 46 weeks or ten and a half months left in the year for the SE just to make up that £2800 alone. That’s £266 per month. And we haven’t considered Sick Pay, Redundancy Pay or even Company Pension contributions yet.

Can you follow this ?

The PAYE is aready 66 quid pm better than you as SE in your first paragraph above!

How come? What am I missing ?
.
.

Thanks, I’ve been completely honest if a little vague with my figures.

I can follow what you’ve written. Using your example a PAYE employee is £66 a month better off.

However, I have based my response on my experience, which is to say tat I have based it on PAYE employed staff at my regular customers, not agency PAYE. Although this changes very little in the real world, other than the tax relief/rebates I can claim.

Although this doesn’t account directly as holiday pay clearly, the way I control my accounts etc I use the balance of my tax account as a holiday saving scheme, once my tax bill has been paid.

If I was to be a PAYE employee I would have to pay higher rate tax on my second and third job which would negate any benefits of being PAYE IMHO

74

Conor:

Bale Bandit:
Ok, broadly speaking I’m invoicing out at £10-15 more a shift than the PAYE staff at one of my regulars. Between 20 and 23 shifts a month that’s a minimum of £200 a month more than a PAYE driver.

Except it isn’t.

PAYE driver gets paid 10.3% more per week than they get in their wage packet in holiday pay.

So if they’re earning £100 a shift in their pay packet and you’re charging £110 a shift as a self employed driver you’re actually earning the same as them due to the holiday pay they accrue on top of what they’re paid.

No wonder you have plenty of work.

No!
My figures INCLUDES the standard adjustment for holiday pay.

I’ll make it simple for you and use your figures

PAYE driver
£100 wage for shift
+10.3%
= 110.30

ME!
£110.30

  • £10
    = £120.30

See how that works? £120.30 is a bigger number than £110.30

Using my figures it’s a rounder number than that but you get the picture

75

Conor:

gettin-on:
Also cannot claim tax free expenses above if self employed

Rubbish.

Talk to a proper accountant or have a tax inspection then
If self employed not ltd company you can not claim tax free nights out or meal allowances tax free but you can put in receipts for meals etc

If ltd co you are then an employee and can claim
Night out money and meal alliwances tax free etc

76

I went Ltd company in June 2013 and so far have found I am a lot better off the only part that was hard was at first I had to go to monthly pay. It won’t suit all but it has me so far. The main benefit is getting on the Flat rate Vat scheme, for example I only earn 50p per hour more than those on paye so not that much I agree but if I earn £600 in a week I invoice my agency for £720 which is the £600 plus Vat @ 20% so they pay into my business account £720 if I earn that for 4 weeks just as an example that’s £2880 a month I then pay Hmrc 10% Vat of that amount which is £288 so leaves me with £2592.
hmrc.gov.uk/vat/start/scheme … rate.htm#5 so I have earned £192 more in a month just on the Vat flat rate scheme alone.
My company then pays me a salary of £700 out of the £2592 leaving £1892 then my Expenses which is different for everybody but mine is around £800 a month so leaves £1092. So up to now I have earned in my hand £700 + £800 = £1500 you then have to set aside 20% corporation tax on the £1092 left which is £218.40 leaving £873.60 but I take 22% off £240.24 leaving £851.76 just so when I pay my corp tax i’l have a little lump sum for myself as a little extra savings. So now I have the £1500 plus £851.76 which is paid as a Dividend which comes too £2351.76 I pay my accountant £ 84 a month so am left with £2267.76. You have to pay NI every 3 month’s which I haven’t got a bill for yet I will get that at the end of this month but my accountant tells me it will be around £30 a quarter.
On paye at £600 a week = £2400 a month take home will be around £1867.12 so am about £100 a week better off so far I have actually earned a lot more than the £600 a week example but yes admit you will have to take into account the times when the work is not about as much as it is now like during some of the winter months but life’s a game of chance which I have taken and so far am very happy but who knows in 6 month’s I might be back saying it’s the worse thing I have ever done, as I said not for all even though I have an accountant I still have to do a little paper work but it’s easy.

77

essexandy1963:
I went Ltd company in June 2013 and so far have found I am a lot better off the only part that was hard was at first I had to go to monthly pay. It won’t suit all but it has me so far. The main benefit is getting on the Flat rate Vat scheme, for example I only earn 50p per hour more than those on paye so not that much I agree but if I earn £600 in a week I invoice my agency for £720 which is the £600 plus Vat @ 20% so they pay into my business account £720 if I earn that for 4 weeks just as an example that’s £2880 a month I then pay Hmrc 10% Vat of that amount which is £288 so leaves me with £2592.
hmrc.gov.uk/vat/start/scheme … rate.htm#5 so I have earned £192 more in a month just on the Vat flat rate scheme alone.
My company then pays me a salary of £700 out of the £2592 leaving £1892 then my Expenses which is different for everybody but mine is around £800 a month so leaves £1092. So up to now I have earned in my hand £700 + £800 = £1500 you then have to set aside 20% corporation tax on the £1092 left which is £218.40 leaving £873.60 but I take 22% off £240.24 leaving £851.76 just so when I pay my corp tax i’l have a little lump sum for myself as a little extra savings. So now I have the £1500 plus £851.76 which is paid as a Dividend which comes too £2351.76 I pay my accountant £ 84 a month so am left with £2267.76. You have to pay NI every 3 month’s which I haven’t got a bill for yet I will get that at the end of this month but my accountant tells me it will be around £30 a quarter.
On paye at £600 a week = £2400 a month take home will be around £1867.12 so am about £100 a week better off so far I have actually earned a lot more than the £600 a week example but yes admit you will have to take into account the times when the work is not about as much as it is now like during some of the winter months but life’s a game of chance which I have taken and so far am very happy but who knows in 6 month’s I might be back saying it’s the worse thing I have ever done, as I said not for all even though I have an accountant I still have to do a little paper work but it’s easy.

At £600 per week that’s over £3000 lost holiday pay

78

If self employment is so poor, how come everyone I know that are self employed earn a heck of a lot of money?

Too many folk on here talking about something they know very little about. A quick look on Google does not make you an accountant gentlemen.

If you do S/E right, you will earn more than paye. If you don’t, you aren’t doing it right!

79

How does it work out £3000 loss of holiday pay on £600 a week then ?

80

essexandy1963:
How does it work out £3000 loss of holiday pay on £600 a week then ?

It doesn’t, Surely the holiday pay an PAYE employee (not agency) gets is based on a standard 8 hour day. so it’s 80 quid a day if they earn £10 an hour, less tax.

This agency nonsense of adding a percentage is border line legal. As a company your duty is to ensure your employees take their holiday. Pay in lieu of holiday was abolished years ago but the agencies took no notice.