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Going Self employed

Discussion in 'Careers, Employment and Professional Development' started by dsb, 17 Feb 2019.

  1. dsb

    Wise Guy

    Joined: 31 Jul 2006

    Posts: 1,400

    I have a few questions about going self employed specifically joining an LLP.

    First of I have no clue so if you need an answer to a question please ask.

    I’m a HGV driver and the company wants us to move over to LLP which in its self is a mine field.

    I am on a salary of 33k plus bonus and take home about 40k before taxes.

    Going self employed can I claim the following.

    Return to my place of work 1 way there park car for 3 nights 1 way back, about 40 miles each way.

    We have been told that we will remain on the same salary but the saving on NI contributions will go back into the company, is this legal. (We will get the same money if we go LLP or remain PAYE) is this legal.

    All our taxes will be managed by a 3rd party. But is there a charge for me to be self employed?

    I have lots of questions but I see no benefit to me to do this. Am I missing something.
     
  2. Uther

    Capodecina

    Joined: 16 Jun 2005

    Posts: 13,003

    I could be totally wrong but I see zero benefits for you doing this.
     
  3. Thecaferacer

    Hitman

    Joined: 3 Feb 2019

    Posts: 747

    Basically the company want to offload you as an employee and you will effectively become a freelancer. As an employee the company would pay you and deduct PAYE and NI at source. As a freelancer this would become your responsibility as you are paid gross. Your employer would then not have to pay their NI contribution (in addition to what you pay) which is what I am assuming they are repatriating back into the company.

    In terms of using a outside company to calculate your tax and NI, you'll need to ask them direct.

    As a freelancer I assume you'll lose certain employment rights such as sick, holiday and new mandatory pension pay.
     
  4. keylion

    Gangster

    Joined: 17 May 2003

    Posts: 427

    Location: Lancashire

    As Thecaferacer said, you'll loose holiday pay, sick pay and and company pension contributions. Your pay actually goes down as if you want four weeks holiday over the course of the year you're only then earning 48 weeks of salary.

    Also if they want to get rid of someone it's much easier if you're self employed.

    This move is clearly a benefit for the company not you.
     
  5. the_r_sole

    Mobster

    Joined: 25 Aug 2010

    Posts: 2,978

    I thought this was the kind of arrangement the government were clamping down on?
     
  6. Jokester

    Don

    Joined: 7 Aug 2003

    Posts: 40,923

    Location: Aberdeenshire

    Aye, LLP type setups are at the front of the firing line at the moment with HMRC. Also, the general rule if you went contract with your own ltd company you couldn't stay doing work with your original employer as it would be a blatant example of you being a disguised employee, there would be no reason why this wouldn't be the same for a LLP, so it would be a massive red flag to them.

    As has been pointed out, this is absolutely to your employer's benefit in this case as they are shifting all the tax liabilities, sick pay, pension, holiday pay and all the other costs associated with your employment directly onto you, without compensating you for that. Given the choice, avoid it like the plague if you can. Only consider it if the gross pay to you goes up sufficiently for you to personally cover this.
     
  7. Eurofighter

    Wise Guy

    Joined: 20 Mar 2014

    Posts: 1,782

    Welcome to Tory Britain
     
  8. mattyg

    Sgarrista

    Joined: 17 Jun 2007

    Posts: 7,743

    With recent rulings with HERMES and others I doubt this will get through.

    It does look like its at the benefit to the company. But for what reason. The company could be struggling and this is a way to save it.

    There are a number of reasons why this would also benefit you

    The haulage industry is getting battered and has been for a while now. Lots of fly by night companies and price wars and haulage companies are rightly trying to stay afloat.

    What we all need tp do is form a union and all increase our prices which will obviously be passed onto the consumer.
     
  9. dsb

    Wise Guy

    Joined: 31 Jul 2006

    Posts: 1,400

    So a few points to make. I’m salary so will get holiday pay as my monthly wage won’t change.

    Has anyone got a link to anything where LLP is being looked into by the government.

    I too see no benefit but would rather be informed when declining the offer. The company at present is doing well.

    I’ve also heard that to be self employed there is a £600 a year charge from the government duels to the amount I would earn?

    Thanks for the reply’s.
     
  10. Jokester

    Don

    Joined: 7 Aug 2003

    Posts: 40,923

    Location: Aberdeenshire

    Slightly old, but clamp downs take years to filter down:-
    https://www.hwfisher.co.uk/publicat...s-be-killed-off-by-tax-avoidance-legislation/

    People were using LLPs back in the early 00s and 10s to avoid tax on income and then abusing the profit share as avoidance. HMRC is now laughing all the way to the bank as they hit them with massive tax bills, plus interest, plus fines for the dodged income tax and NI.
     
  11. HangTime

    Man of Honour

    Joined: 25 Oct 2002

    Posts: 28,117

    Location: Hampshire

    If you are getting the same salary there is no point in this. Whole point of taking this sort of arrangement is to get more pay and/or avoid some tax.
     
  12. dsb

    Wise Guy

    Joined: 31 Jul 2006

    Posts: 1,400

    So far the only benefit is the possibility of a bonus. Which I have asked directly and indirectly to how much to not get what I believe is a reasonable answer.
     
  13. keylion

    Gangster

    Joined: 17 May 2003

    Posts: 427

    Location: Lancashire

    I'd be inclined to treat the bonus as non-existent as that is what it may end up being once you've moved to self employment.
     
  14. keylion

    Gangster

    Joined: 17 May 2003

    Posts: 427

    Location: Lancashire

    Take a look at the BBC article titled 'Hammond plans tax crackdown on 'synthetic self-employed' (sorry I don't have a link).

    If the figures stack up now they may not do in the near future.
     
  15. kindai

    Soldato

    Joined: 9 Aug 2013

    Posts: 6,771

    Location: Bromsgrove

    You need a minimum of a 25% pay increase to make it worthwhile for you.

    But no, youre not missing anything, its a terrible move unless there is a significant bump in pay.
     
  16. Pestilence

    Capodecina

    Joined: 22 Feb 2008

    Posts: 11,047

    Yeah late to the party on this one, but at the same pay rate not a chance dude. Don't touch with a barge pole.