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Welcome
Driver,
Here are some notes
available via my blog:
Notes surrounding the issue,
am I self employed? HMRC’s
criteria regarding who is
and who is not self employed
can be complex, but is
narrowed down, to two very
important points: are you
responsible for losses
incurred by your engagement,
can you send a substitute in
place of yourself to
complete your contractual
engagement?
Driving
(Taxi or LGV) through an
agent or ‘Base’ has
difficulties in complying
with these clauses, meaning
you are in contravention of
HMRC’s IR35, which states
that attending the same
place of work continuously
and submitting invoices to
one single agent/contractor
defines you as employed and
subject to tax at source and
national insurance will be
class 1.
Accountants
say ‘there is no such thing
as a self employed driver’
this is a fact not an
opinion! However there is a
solution; operating through
a limited company allows the
director to gain income from
whatever source they may
choose (in line with the
general activities of the
company).
I do not
favour the use of ‘service
companies’ which by using
the company as an umbrella,
they distribute agreed
expenses to directors
arriving at a reduced tax
commitment for the
participants minus a fee, of
up to £80.00 per month. HMRC
will close this loophole
shortly, harming those
wishing to comply, for the
benefit of their client’s.
The above is
in the public domain, but I
will now explain how KPB
will facilitate the tax
advantages of working self
employed. Forming a limited
company is easy, via the
internet, an ‘off the peg’
company uses existing
dormant names which have
ceased trading, or you can
choose to incorporate a name
of your choice (providing
there is no other of that
name) for reasonable rates.
Typically £26 to £130 the
more expensive do come with
benefits, in that you
receive hard copy of
articles of association and
memorandum plus share
certificates, minute log
etc, KPB can do all this for
you at no additional cost.
Once you have your company,
all returns, year ends and
online submissions are
completed by KPB. The task
of minimising the client’s
tax is the single most
important factor governing
the relationship. The ease
at which this occurs is
unique in that 12 envelopes
are sent to you; your task
each month is to post them
back to KPB (at no cost to
you) filled with every
invoice relevant to the
business, then those that
you are unsure of, then
finally throw what’s left in
too, how easy is that?
Let KPB be
the judge of what is
claimable! From this we will
extract the information to
maintain accurate accounts
and return the documents to
you within five days
complete with information as
to how you are progressing.
The year end will be
forecast for you, so that
you can make provisions for
the tax liable.
The most
important piece of
information the cost is not
last on purpose, now you are
familiar with how it works,
what are the costs and
savings? These can be
summarised as follows:
Taxed at
source (PAYE)
Your gross
wages/ income/ fees at
640.00 per week are liable
to Just short of 25.5%
deductions achieving a net
wage of £476.80.
Limited Company (KPB)
The
calculation of corporation
tax is more complex but KPB
has for several years
achieved between 15 to 18%
deductions from gross.
Best: 15%,
net wage £544.00
Worst: 18%, net wage £524.00
Within the calculations is
the administration of the
clients affairs, fixed for
2010/2011 @ £7.00 per week.
This is not additional
expense it is within the 15
to 18% deductions! The only
criteria is that this figure
be paid to KPB directly each
month via a Direct Debit of
£30.33
More
information as to how we
work and our commitment to
clients is available on this
website. The formation of
the original company is not
included in these
calculations as it remains a
single one off expense
within the first year.
Remember for 98% of
our clients we make savings
in excess of our fees.
We have negotiated with CW
to apply for a fresh bank
account for the business
without your attendance,
just a few short questions
on the phone and your
holding account is in place!
I hope this information has
been helpful to you, call me
on 01788 550176 if
you are unsure of any
aspect. Alternatively, you
can
send us your enquiry
through the website to set
in motion an action plan.
Engage our services and
start saving TAX!
Paul A King AICB
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