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bigduckontax
bigduckontax, Accountant
Category: Tax
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I'm a self employed Chauffeur and work small

Resolved Question:

Hi...
I'm a self employed Chauffeur and work for a small company and my boss is keep hinting that I need to be a " Ltd company" for different reasons, the latest is HMRC have found out he is giving us work in this way and he's " up shit creek" but when I questioned him he said the other alternative is for me to have shares in the company!
Can someone please try to clear up what he's getting at here?
It would be much appreciated thanks!
Lewis
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello Lewis, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. I had a client who was in your position, indeed he still is! He runs his taxi which is provided by the firm, collects the fares and pays a proportion into the company by means of bank deposit slips. His takings less the proportion less other incidental allowable expenses are reported annually to HMRC under the self assessment regime for self employment upon which he is assessed for tax and National Insurance. That appears to be the right and proper way to conduct such a business. Providing you are reporting your profits annually to HMRC by self assessment you should have nothing to worry about. Using your own limited company as an intermediary you will find a bit of a palaver. For a start you will almost certainly have to pay your earnings through PAYE and have to operate RTI. It may be that HMRC have rumbled your employer and detected that he should be paying you under RTI, ie deducting tax at the standard rate, which he would not have to do were he paying you as a limited company. Having shares in his company would yield you nothing unless dividends are declared and you would have little say in the running of the organisation or indeed the declaration of dividends. I suspect that your boss has got himself in a hoe, in which case he should stop digging. I do hope that my reply has been of some help to you and thrown some light on this rather murky situation.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.