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.
See a different accoubtant mate
Your wage should be £641 a month then you pay personal tax or ni on your money
Pay any more you will have paye ni deductions and ltd company will pay employers ni on your money £641 is the linit this tax year
Plus meal allowances and nights out etc that i listed above
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.
Depends if you are salary or hourly pay. £600 per 5 days 28 days per year £3360. Not many firms keep self employed on full money when not working.
Can anyone with experience shed any light on this. I’m currently Self employed, as the Job advertised required the drivers to be self employed. All my work is sub-contracted through one agency, but all the work is for one company. Would I truly be classed as self employed, or should I be classed as an employee ? hmrc.gov.uk/employment-status/#1
looking at this page on the HMRC site, I sould be classed as an Employee, but how can I, If the job was advertised on a self employed basis.
If you work for one customer only for more than 3 months in any tax year you ought to be PAYE, however a work around for this is to either,
Supply your own tool and equipment
Have an element of autonomy (that is to say plan your own work etc)
Have an element of risk (i.e a chance that you’ll make a loss)
I cant remember the exact wording but that’s what it boils down to.
Another option would be to set up as a LTD or LLP and pay yourself as an employee of your on firm, that way you can work in one place permanently.
Kneal:
Can anyone with experience shed any light on this. I’m currently Self employed, as the Job advertised required the drivers to be self employed. All my work is sub-contracted through one agency, but all the work is for one company. Would I truly be classed as self employed, or should I be classed as an employee ? hmrc.gov.uk/employment-status/#1
looking at this page on the HMRC site, I sould be classed as an Employee, but how can I, If the job was advertised on a self employed basis.
Cheers
Yes, according to what HMRC provide in writing, as per your link, you are an employee, however at the moment if you query it verbally with your tax office they will tell you that you can be self-employed in your situation, but they will not give you that in writing. When the economy does start to pick up again, in the same way that the IT industry was hit some years ago, the taxman will then start following the letter of the law and will start hitting the sham self-employed and it is the driver who will end up paying big time. The best way to do it is to sign up with 2 agencies, and even if you only get a couple of weeks work a year from the second one then you will have more of a basis for saying you are truly self-employed.
We’ve managed to confuse the OP and a number of others.
So, how about making it simple, if you want PAYE all power to you, it’s not for me and I feel I am able to earn more than by being SE.
You are the only one who can make the decision as to PAYE or SE.
If I was trying to make the decision now I’m fairly confident I wouldn’t be taking advice from someone with 6 weeks experience, which hasn’t been tested.
I have many years experience of both SE and LLP and both work for me and my bottom line is higher than it was when I was PAYE. I’m happy saying that, however I will say you have to do the math for yourself and NOT assume that because it works for me it will work for you.