umbrella company

UK PROFESSIONAL DRIVERS FORUMS THE UK PROFESSIONAL DRIVERS FORUM (INTERACTIVE)
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The-Snowman:

tmcassett:
No its not swings and roundabouts in regards of your holiday and sick pay, they are not held back, they are simply added on top of what you earn if your PAYE

Maybe im thinking about it all wrong then. In order to get holiday pay and sick pay not added on top of my wages I need to be PAYE? Of which I’ll earn less every week anyway. I get less every week to ensure I get paid when I take a week off? Sorry,not seeing any difference there.

tmcassett:
Also just because someone’s been to university does not automatically mean their opinion on something is true and correct.

I know it does not make their opinion any more correct,everyone is entitled to an opinion, but I am however more likely to trust an accountants opinion regards taxation etc than someone who is not. I have no idea how clued up on the laws people on this forum are. Anyone can quote figures and calculations but until I have seen credentials I will lean towards the person I trust more.

tmcassett:
Exactly what hassle would that be then

The extra hassle involved is all the other stuff that is neccessery. You have not mentioned all that you have had to set up regards the law for agency workers. Are you SURE you’ve covered everything? It may only take 15 minutes “because your organised” but I don’t see how it can be that easy. My wife is SE (website designer) and it does not take 15 minutes to do her tax returns. Organised or not.

tmcassett:
I can negeoiate my own pay rates (obviously within reason) and the fact that its more than the measly £1 per hour offered by agencies

Extra £1 on top of what? Im on AT LEAST £4 p/h more than full time jobs are offering. Do you mean going to companies direct and by passing the agency altogether? Because that would actually be worth considering,if possible

But it’s not as simple as just setting up a ltd company and missing out the middle man. There are other stuff involved due to the law change,as I already mentioned. At least with the umbrella company they deal with it all in one go each week and I don’t need to bother about it. I appreciate what you are saying regards to having more in my bottom line each week but to me it does not offset the headache that comes with it.
I appreciate what you are saying but like you say,Im happy with what im paying for the service I get. I come and go with driving. I work for a few months,then take 4-5 month’s off. That’s why im agency. So I can pick up and stop when ever I choose. Having a ltd company causes problems that are not worth it for the short times I am doing it.
Don’t get me wrong,I appreciate everything your saying. I am especially looking forward to your answer regards the extra £1. If it IS going direct & missing out the agency altogether (something I had not thought about) then I will deffo consider that.

When you say you are getting £4 per hour more than full time jobs are offering are you referring to the permanent drivers at the company(ies) you drive for or is that £4 more than the PAYE agency workers at the same agency you work for. If its the PAYE agency rates then fair play to you because I’ve never known an agency to pay that much more for Ltd or Umbrella so you’ve done well?

Yes tax returns take a couple of hours to do at the end of the year and if VAT registered then quarterly you will have to do your VAT returns but the 15 mins I was referring to was the week to week stuff involved in running a Ltd Co. such as sending invoices off, updating my income/expenses spreadsheets, filing my paperwork and records, paying myself. If organised like I am this takes me 15 mins tops. I don’t personally see the headache you refer to compared to an umbrella company doing it but everyone is different. Also with me doing it I know its being done and paid, can you be 100% sure the umbrella company are doing it right and paying the right amount to HMRC and also you are still paying their weekly fee’s and employers NI contributions, with a LTD Co. you save on those.

One thing I’m not sure on which you or someone else may be able to tell me because I haven’t looked it up is if you are running a Ltd Co. via an umbrella company are you still able to be VAT registered enabling you to charge 20% extra on your invoice amount. Might seem a stupid question but I’m intrigued to know. If not, then there is extra money you are losing out on for free because you get to keep around half the VAT amount you charge.

If you do want to come and go with driving and take 4-5 months off you can still do this. Just because you have a Ltd Co. does not mean you cannot.

Bottom line if your happy then that’s all that matters, its not up to me or anyone else to tell you otherwise, I’m just highlighting how you can be even better off.

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tmcassett:

YorkshireJeff:

tmcassett:
for every £20 I charge in VAT £9 goes into my pocket

Hi Tmcassett
Do you not mean for every £20 you charge in VAT £10 (£11 in your first year of flat rate VAT) go’s into your pocket, has i understand it drivers pay 10% VAT with a 1% reduction in there first year ie 9%.

Regards,
Jeff. :sunglasses:

Hi Jeff

Yes sorry your right, It had been a long week and I was on my 4th glass of the falling over juice when I wrote that so my head was a little scrambled and I got the example the wrong way around with the figures.

Just a quick point. You do charge VAT at 20% and the industry level for the FRVS is 10% (9% in your first year as Jeff said) but you charge the 20% on the nett and pay the VAT man on the gross.

So if you charge 20% VAT on a £100 invoice (invoice value = £120) you need to send the VAT man 10% of the invoice value which would be £12.00. The extra company profit would be £8.00. Less CT at 20% the true value is £6.40.

First year figures are 9% to the vat man which is £10.80 giving £9.20 extra company profit. Less CT at 20% the true value is £7.16.

Also the amount you could take as a dividend may be affected if you are, like most lorry drivers :neutral_face: , a higher rate tax payer