I have been driving class 1 for 6years usually through agencies.I have noticed that nowadays approximately 30%-40% of drivers that work at each agency I have been with are selfemployed or ltd companies.Forgive me if this has been done before but would like some advice on wether its worth setting up a LTD company■■?
I have spoken to a few drivers and the general feeling I get is that your better of being self employed due to the tax relief you get is this true???I know that you loose any holiday pay and you have to pay your NI contributions but to be honest I would rather the holiday pay was paid upfront to me and be gathering interest in my account rather than the agencies who I dont trust 100%
I have also read that it is possible to claim for expenses fuel,ppe,food etc and still be paye is this true if so how do you go about this■■?
any help from drivers who have been there and got the tee shirt would be appreciated.
I was on agency for nearly three years class one. In answer to your question yes the Ltd company way is better in my opinion IF you are doing enough days to warrant paying the accountant or management company to do your books. Nova for example, and this is from memory charge around £25-30 a week to process your NI and tax. You can claim, 40p a mile to and fro to your destination of work, food, clothing, washing,parking expenses, basically anything that you would normally run through a company. They account for all this and take the x’s you have incurred through the week and knock it off your tax weekly instead of annually when most companies submit their tax returns.
If you google Nova and put your current salary into their calculator it will give you an idea of what you will be saving in tax. It all mounts up and I was saving in the ball-part of £60-70 a week leaving me with more in may wage packet.
You will have to check with your agency that they use these companies, there are many out there, Nova though is a well established one and if I was to go back on agency I would use them again. They text you when your money is paid into your account and let you know your savings in tax. I would definately go back and use them. Accountants are more expensive and not as handy. Keep your bills receipts, fax/emial the stuff off each week and your done and will be saving yourself a good few quid in tax, legally.
Thanks for your reply Matt at least some one bothered
Regarding your post about management companies I have heard that overall they are more expensive than Accountants and judging by the quote you gave it would work out at approx £1500 a year where as an accountant should cost approx £500 I’ve been told.I will do my own research into this.So with a management company you receive your tax expenses immediately in your wages instead of waiting till the end of the year I can see that is an advantage.
Many drivers I know in your position use Fairgate, similar to Nova but they charge £15 per week to do the same. That drops to £5 if you ‘earn’ less than £150 I think.
Allowances (from the Tax Office) that don’t require receipts:
£2.12 per day for laundry
£5 per day for food (up to a 10hr working day)
£10 per day for food (over a 10hr working day)
£0.40 per mile travelling (first 10,000 miles, £0.25 thereafter)
If receipts are produced:
Any legitimate expenses i.e. new pair of steel-toe boots, work gloves, work wear - trousers/polo shirts, PPE - hi-viz/hard-hat, digi-tacho rolls, etc. Some of those drivers even claim for a wee bit for stationary. There is some ‘weird’ thing to do with mobile phones; if you are on a contract, you claim as per your itemised bill - if you have a PAYG phone you just claim a standard £20 per week I think but you’d need to check that one to be sure.
Like has been mentioned before, if you are getting the hours, and you [financially] plan for taking some time off (i.e. your own holiday pay) you should be better off.
I was also told that for the scheme to remain legal, there has to be a 22% or 24% difference between PAYE drivers and umbrella scheme drivers. Hence the reason an agency I know of pay £8/hr PAYE but £10.50 (min) umbrella scheme. I can give you a contact if you want more info ‘from the horses mouth’, so to speak.
As it seems you have already worked out, the various management companies like Nova are very expensive for what they do. Personally I wouldn’t go near one with a bargepole. I used to pay my accountant £350 a year to do my annual accounts and the rest of the paperwork I did each week in under half an hour.
Paul I think I would go the LTD company route as it seems cheaper but I don’t know how long I will be working for the agencies I never tend to work for them for more than a year.I have some other possible work in the pipeline and if that doesnt work out I might just get a permanent job I know a few companies who are recruiting like Somerfield in St Helens if you like working EVERY weekend that is
So I thought maybe a Management company might be best just in the short term and if I end up on the agencies long term then I could go LTD Company and get myself a decent accountant
Yes thanks marcustandy I will have that contact number of you it wont harm will it
