I am just in the process fo moving back to driving and interested in working as a l.t.d,previously I worked through NOVA.
Can anyone give me pointers on how to go about setting up as a L.T.D please.
thecoder0:
Can anyone give me pointers on how to go about setting up as a L.T.D please.
Check out the HMRC`s business education unit website.
They run a variety of short free courses detailing how to setup and run a Ltd co.
There are several online companies that will do it cheaply for you, or ask an accountant to do it, or as stated elsewhere
peirre:
A quick search of the forum using the search box in the top right hand corner will reveal all the info and opinions from a variety of users that you require
peirre:
A quick search of the forum using the search box in the top right hand corner will reveal all the info and opinions from a variety of users that you require
+1.
Right, having used the “white box” method (oh, and thanks for the wonderfully helpful replies that directed me to that, wonder why i didn’t think of it before…) i am still none the wiser about the pros of setting up my own limited company. I can see plenty of confused people asking for help, but the answers just seem to confuse the issue further…(oh, there you go, maybe that’s why i didn’t bother with the search option first…?)
Bottom line is i am just about to embark on at least 6 months of work with an Agency who are initially paying me as PAYE. They will happily pay me as a ltd company or umbrella at a higher hourly rate.
If i set up a ltd company and get paid through the agency for the work, is that going to upset the HMRC who will try and say i am an “employee”?
Can i use the “flat rate” VAT thingy where i charge the agency 20% and pay HMRC 10%?
Do i have to negotiate a new rate with the Agency for this VAT thingy, or do i just adjust the already agreed hourly rate so that it shows a pre and post VAT amount on the invoice i.e. £10 per hr post vat or £8.33 pre VAT?
Nova run a sole trader option also, they will set it all up for you and get you registered for V.A.T. for 5% of your wage.
For a fee they will do your accounting also if you like but its easy enough.
Claim mileage, Laundry and food up to £5 without reciept.
There is companies who are cheaper than Nova also.
aranger:
Nova run a sole trader option also, they will set it all up for you and get you registered for V.A.T. for 5% of your wage.For a fee they will do your accounting also if you like but its easy enough.
Claim mileage, Laundry and food up to £5 without reciept.
There is companies who are cheaper than Nova also.
To be honest, even the guy at the Agency warned me away from Nova!
He did say Backoffice were ok though?
DonutUK:
aranger:
Nova run a sole trader option also, they will set it all up for you and get you registered for V.A.T. for 5% of your wage.For a fee they will do your accounting also if you like but its easy enough.
Claim mileage, Laundry and food up to £5 without reciept.
There is companies who are cheaper than Nova also.
To be honest, even the guy at the Agency warned me away from Nova!
He did say Backoffice were ok though?
Think some agencies have a deal with umbrella companies as they seem to promote specific ones.
This mob did me o/k before for £20 a week, will do everything Nova do.
DonutUK:
Right, having used the “white box” method (oh, and thanks for the wonderfully helpful replies that directed me to that, wonder why i didn’t think of it before…) i am still none the wiser about the pros of setting up my own limited company. I can see plenty of confused people asking for help, but the answers just seem to confuse the issue further…(oh, there you go, maybe that’s why i didn’t bother with the search option first…
Because people dont bother searching for answers, afterall the correct replies and right information have been posted over and over. it becomes a teedious task for those who give the answers. I generally find those seeking this information are problably the kind of drivers who are being pushed into the situation, & who are not willing to put the effort in to run the company they setup correctly, inc sitting down after a 15hr day and having to do book keeping, tax returns etc, when the cold beer and hotmeal in front of the TV is Sooooooo appealing and more likeable. These are the type of drivers that the umbrella Cos expoit 
with their hands off attitude
DonutUK:
Bottom line is i am just about to embark on at least 6 months of work with an Agency who are initially paying me as PAYE. They will happily pay me as a ltd company or umbrella at a higher hourly rate.
If your only considering doing agency work for 6 months or more setting up a Ltd Co isnt for you. As its generally seen as a long term option of at least 2-3 years The higher hourly rate :laughing: the agency is willing to pay you to get you off PAYE isnt worth it with what youd loose, and the fees levied be umbrella Cos will wipe out a large chunk of those extra monies
DonutUK:
If i set up a ltd company and get paid through the agency for the work, is that going to upset the HMRC who will try and say i am an “employee”?
As an employee of your own company, you would be liable for NI & PAYE contributions, likewise your company would also be liable for NI & PAYE contributions. So youd be hit with a double wammy Thats why all drivers running Ltd Cos are company directors who draw profits
DonutUK:
Can i use the “flat rate” VAT thingy where i charge the agency 20% and pay HMRC 10%?
Again it isn`t worth the effort for only a 6 month period registering for VAT with HMRC
DonutUK:
Do i have to negotiate a new rate with the Agency for this VAT thingy?
Ive yet to find a driver who has negotiated their own rate with an agency, as its generally the agency who dictates the rate.
Lump it or like it theyll always find find some mug to do the job if you wont.
Don`t be suprised if they burst out laughing if you try dictating the rates to them.
You will deffinately be put on the sidelines if your rates are higher that the other joe
DonutUK:
do i just adjust the already agreed hourly rate so that it shows a pre and post VAT amount on the invoice i.e. £10 per hr post vat or £8.33 pre VAT?
The NET amount is the rate the agy pays you per hour + 20% VAT = the gross amount youd charge the agency on an invoice However in the rate is inclusive of VAT youd need to use the VAT fraction to work out the amount of VAT, currently this is 1/6th of the gross amount (divide the total by 6)
ie: the VAT on £6 gross (inc VAT) is £1
it could be worse especially trying to work out the VAT fraction on 17.5% as that was 7/47th
My previous advice about looking up those free courses run by HMRC http://www.hmrc.gov.uk/bst/ are obviously being ignored be a lot of people inc you.
As all of the above stuff about setting up you own Ltd Co, dealing with you liabilities to HMRC & how to do stuff are all covered by these courses.
TBH I learned more (inc how to NOT pay certain taxes) from the HMRC staff running these courses
Im also guessing that the 10 mins Ive just spent typing this info (again) will go largely ignored which is why I suggested using the search box in the 1st place
Maybe a mod could sticky this thread?
Peirre, thanks for the detailed response, your time wasn’t wasted.
I do realise that there comes extra responsibility, and therefore work, with my own company.
I fully understand about both myself and the company being liable for NI & PAYE and had fully intended to “draw profits”. Having done some more research i think i was getting confused about the definition of employment status for the purposes of AWR. There is an awful lot of information around about IR35 as well which was really what i was after.
I totally agree with you about the idea of negotiating new rates with the Agency, but it was a question that popped up.
I really don’t want to pay an umbrella company to do something i could do myself, however i take your point about the ltd company being a longer term option. Obviously i am hoping that the 6 month stint turns into a much longer term option…but at the moment it is what it is.
I will look into the free courses as they sound an excellent idea.
I asked the same question a few weeks ago, replies were great, spoke to business gateway who are not really as clued up as they think, HNRC was all just too complicated, so I booked a meeting with an accountant, first hour free, best thing I could have done, sorted everything out in my head and he explained it all in a way I understood.
starfighter:
Maybe a mod could sticky this thread?
We are probably gonna need a sticky FAQ for this subject.
however I`m still convinced people will still ignore any advice given, such is human nature.
So I figure any FAQ section/sticky would be pointless.
I can`t emphasise how worthwhile the HMRC courses can be.
The handfull of courses on the “to do list” BEFORE setting up should inc:
Setting up a limited company
Becoming a director
how VAT works
PAYE - Expenses and Benefits — the basics (to learn about the NI payment thresholds 
)
Business expenses and Capital Allowances for the self-employed
http://www.hmrc.gov.uk/bst/advice-team-events/work1.htm
afterall this is the only use for an umbrella
thecoder0:
I am just in the process fo moving back to driving and interested in working as a l.t.d,previously I worked through NOVA.Can anyone give me pointers on how to go about setting up as a L.T.D please.
Im with Maddison group co uk and works fine for me.
Getting every year Money from tax back
Peirre, couldn’t you do a full ‘help’ post on LTD and ST and ask a mod to sticky it? Depending on which mod you ask, they may stick it and remove some stuck crap that’s quite pointless and taking up space, imo.
Im sure there are more wiser sages who are more clued up on the subject than myself. Which is why I always point people towards the HMRC business support team website.
I`m cutting back on the time I spend posting the same info over and over, because the advice that is given is largely being ignored, or taken with a pinch of salt. If people cannot go to the trouble of spending time using the search function to find the correct answers that have already been stated. So why should I & others bother. Which is why IMO a sticky would be pointless. IMO the majority of people asking these questions are those who are being forced down that route by a variety of employers. These are also the people who would never have even considered setting up shop for themselves in a million years. So they end up putting the cart before the horse, ending up getting in a fluster for not doing their homework, the setup & prep work for the company prior to embarking on such a venture.