HGV LTD - The Book-keepers Forum (UK)

abacus12345 · Guru

HGV LTD

abacus12345 · Guru

To add - frs 105 will surely be sufficient?

Cheshire · Master Book-keeper

Couple of quick thoughts......are you authorised to act as a formation agent? Now I think of agent status.....don't forget to get yours via HMRC if you haven't already. Also, why would you be involved in opening the Bank account? Or have you turned HGV driver these days?

abacus12345 · Guru

Hi Joanne, Lol. No, it's a family member so I've the advantage of being there every step of the way so to speak. It's sort of a check list of what is to be done.

Cheshire · Master Book-keeper

More thoughts (random today!). I recall you said you had your AAT, are you MAAT MIP or would you need supervision for the Limiteds?

Also - if not employed by a haulage form, dont they usually drive their own cabs?

Have they already done self assessments as they would be expected to continue and would no doubt receive the 'invite' to complete one.

Insurance I understand, you shouldnt be advising on as its a regulated area, other than to perhaps suggest he looks at getting fully insured as appropriate.

Is there a need to register for VAT just now? Im guessing youve weighed up the options including as to the scheme.

Shamus · Forum Moderator & Expert

If ever you are confused as to whether you need to fill out a self assessment refer to this page : www.gov.uk/check-if-you-need-a-tax-return/y

As for whether it carries any legal clout... Hypathetically no, but where an HMRC help page exists that is telling you one thing is it really worth arguing the toss over something as simple as a basic self assessment?

You may find that once incorporated the client gets a letter from HMRC requesting that they make a return. If you get a letter then you can argue that it was issued in error but if HMRC say they want one and that it is not a mistake you have no choice but to complete one.

Also, if your client has any income other that taxed through PAYE / at source then a self assessment is required whether HMRC have requested one or not.

At the end of the day personally I believe that that it is better to register all directors for SA as you will come accross cases where HMRC issue them with a notice that they do not pass on (remember you are not their agent for SA if they are not registered so HMRC do not contact you) then they get a fine for missing a filing that you knew nothing about.

As for where the invoice gets sent, who is the contract with that pays the company? I would assume that the contract is with the agency unless the leasing company has the contract with the agency and then subcontracts the work to your client in which case the money would be coming from the leasing company, not the agency.... But then why would your client mention the agency at all as they would have no direct contract with them... No, I'm overcomplicating this, the contract is with the agency and the agency pays your client so they are the one's that the invoice is sent to.

Remember that there are special rules for subsistence for long distance lorry drivers which are more lenient / beneficial than normal subsistence rules.

Also refer to the really useful recent post from John (Ledger) about the PSC register which you need to add to all of the other registers that need to be maintained at the companies registered offices.

hth,

Shaun.

abacus12345 · Guru

Yes I'm AAT qualified, yet I'm with the IAB at the minute. It is a complete change of trade for the guy. From PAYE, in a unrelated profession, to the new venture. It is my understanding (at the minute) that agency drivers do not necessarily need their own cabs. The reason for the VAT, in particular FRS is that there is an advantage there. I understand the principles of what is needed (I hope) and I see this as an opportunity to potentially learn something of major use. The insurance reference is akin to forms of personal liability for the guy - not road type insurance. I wouldn't advise on which brand, as such to go with. I understand each ingredient, I just don't want to forget something, so as that the cake falls apart. Thanks

abacus12345 · Guru

Hi Shaun. Thanks. Re invoices, that is yet to be discovered. I'd assume at this point, they'd go to the agency. The agency route is being used at the minute as the driver has little experience of driving, so as you can imagine, an agency offers options. I was aware of an area of subsistence for lorry drivers, from another thread about subsistence - I've not read too much into that area yet. I'm in agreement in regards to completing a SA, even if not strictly, by the letter of the law needed. Thanks

Shamus · Forum Moderator & Expert

Who is responsible for the marine insurance? Is that the business wanting goods shipped or the company doing the transporting?

By marine insurance thats a generic term meaning goods in transit insurance but I use the term marine as it's an insurance reference that your client may be hit with.

Interesting thought... If an asylum seeker is climbing on his cab trying to smash their way in, falls off and sues, what insurance would cover that? Would that be public liability insurance or something more specific?

I think that you really needsomeone who handles HGV drivers who knows the various insurances that they need.

Do you find it at all worrying that thats nothing to do with the bookkeepers / accountants role but rather something specific to the business but you are the one asking questions about it?

Does your client know this business well enough yet as knowing this sort of stuff is their responsibility, not yours but if you take it one and advioose them then you are accepting responsibility for the advice that you give.

Shamus · Forum Moderator & Expert

Oops, just realised the time.

I'll continue this tomorrow now.

night all.

Cheshire · Master Book-keeper

Hi Johnny
Sorry but I completely missed your post about it being a family member, think I was mid typing my next reply when that snook in. Its certainly a good one to follow and learn from, maybe even sit with him when he incorporates online and starts the ball rolling with HMRC online, so you can see what sort of questions crop up.

Liking the fact you are doing a list, lol.

Working for an Agency is a good route into the industry and once he has some experience it might be worth looking at working for a haulage company that deals with the large fast food chain with the clown mascot as they are really good payers, so Im told!

Might be worth contacting the Freight Transport Association or the Road Haulage Association for some advice - or they might have some on their website.

abacus12345 · Guru

Hi Joanne. Thanks for the info. Yes with it being immediate family, I can literally be there to have a nose at every opportunity. This also covers much of what I want to see in practice, as an oppose to just reading about xyz. I will definitely check out some transport forums to access whether I may have over looked any issues. Thanks

Leger · Master Book-keeper

Hi Johnny

Re overnight subsistence, the Road Haulage Association has a national agreement with HMRC and is not a P11D treatment. https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim66110 If its a sleeper cab I believe that HMRC will accept 75% of the rate shown.

I agree with Shaun in registering for SA but for a different reason. All shareholders (he will be the shareholder as well presumably) have to pay tax on any dividends received over 5k now, so assuming they take a mix of salary and shares (1) registering is now a given, in my opinion

(1) Depending on the depth of your involvement, ensure that your relative doesn't fall foul of IR35. It would be advisable to get the contract checked imo.

abacus12345 · Guru

Hi John. Thanks. This contract you speak of, it is between the agency and the driver, written by the agency? What I've sourced ATM in regards to IR35 is that as long as your not driving for one company exclusively you should be ok. Also there is a mention on being told your start times being a factor also.

Cheshire · Master Book-keeper

In this case Johnny, can it not be argued that the 'agency' is the one company he will be working for? Unless he is signed up to several agencies.

abacus12345 · Guru

You see at the moment I'm assuming it is through the agency as obviously they get there their slice for the main company. Chances are more than one agency will be used due to the nature of the game, together with getting enough work to live on. I do see your point. Would you agree that it is almost the same as a Ltd cis business?

Cheshire · Master Book-keeper

Just thinking - Im assuming such agencies dont treat them as 'temporary staff' and pay them via PAYE. The getting enough work really shouldnt be an issue as there is a massive shortage of HGV drivers in the UK, albeit his lack of experience might mean he has to take really short haul journeys on to prove himself.

When you say about comparing it to Limited CIS do you mean from a PSC/IR 35 point of view? Difficult to say without knowing the eventual outcome of this one in terms of work and where he will actually get it. Has he actually got the HGV licence yet?

Might be worth waiting until first 'offer' from an agency and the contract from them is received, or trying to get information about the types of contracts and how they work now, as a Limited can be set up very quickly these days if required.

abacus12345 · Guru

Hey. Yes in regards to IR35. Yes he has the license to drive. As I say, ATM he is still in PAYE in a completely different trade, so for me at least, this is research phase. From what I've gathered over time, from speaking to a few drivers (just in passing) is that agencies prefer drivers to either run a Ltd, or work underneath a umbrella. I came here first so as that I know the correct direction to be looking, as the Internet is great, when you know for sure what you're looking for. Dare I say - I understand the filing, the VAT, the PAYE, the bookkeeping etc..yet as I say, I don't wish to miss anything out. IR35 is definitely one which needs a stern looking into. Thanks

Leger · Master Book-keeper

Hi Johnny

I'm not fully conversant with the ins and outs of IR35 but contracts can be formulated so to be outside of IR35. The main thing I believe is the amount of control the "employer" (which may be the agency) has over the contractor.

I had a lorry driver on my books last year and I pointed her towards relevant material IR35 wise and left the decision with her. IR35 is a very grey area and I didn't want it to be my decision.

Joanne, a quick question re formation agents. I have set up Ltd Companies on behalf of other people ( using a formation company up until now) As far as I know that's ok to do?

I had an interesting conversation yesterday with a company that means I can do it through them paying only the Companies House fee plus a small monthly amount to them, which also gives me access to all things companies house related.

However I don't want to be falling fould of any formation regulations I am unaware of.

Cheshire · Master Book-keeper

Sounds like one that HMRC may not have got to yet, or perhaps one I just havent heard much about as CIS is always up there - might be worth a dig around their website for clarification.

Certainly one worth looking at very closely. Spreading the load helps, plus the fact that he can refuse some assignments but then on the opposite side - he cant just send someone as a substitute to do the work might present an issue - unless you roll up your sleeves and get that HGV licence too (bloomin expensive mind!!!!!!)

abacus12345 · Guru

Thanks guys

Cheshire · Master Book-keeper

Leger wrote:

Joanne, a quick question re formation agents. I have set up Ltd Companies on behalf of other people ( using a formation company up until now) As far as I know that's ok to do?
I had an interesting conversation yesterday with a company that means I can do it through them paying only the Companies House fee plus a small monthly amount to them, which also gives me access to all things companies house related.
However I don't want to be falling fould of any formation regulations I am unaware of.

Hi John

My understanding is that Formation Agents are authorised by Companies House. Ive only ever used the big boys for such stuff, in a former life. But I know lots of Accountants who do it and only charge the £13, no doubt getting the labour time back in their annual fixed fee. I certainly wouldnt consider paying a fixed monthly fee - but maybe thats cos Im too tight! In fact all the Accountants I know bar one charge £13 for the annual return, the other charges through the nose if you blink!

Worth a gander round Companies House website as just now Im bombed and should be doing work rather than on here, so just now I cant send you any info link. Might have another gander later though.

Leger · Master Book-keeper

Thanks Joanne

The monthly fee isn't for setting up a Ltd Company its for being able to file to Companies House via this company. It's only £6 + 80p per Company a month but I have to decide whether its worth paying £8-£9 for the privilege. I am a tight a*se myself so may not anyway, but it didn't sound too bad.

So do I get the impression that you have to register as a formation agent if you make a charge for setting up a Ltd Co?

Cheshire · Master Book-keeper

Ive not read this - no time! Soz
www.gov.uk/government/publications/formation-and-company-secretarial-agents/company-formation-agents-and-secretarial-agents

abacus12345 · Guru

For those reading this new to this area as I am - there is some interesting case laws I've been reading through. As per x can contradict y.... There are companies who will check over the contract, as per above. HMRC will also check a contract, although I'm sure with that comes certain risks within itself! The caveat with this type of business setup lays within either, being within, or outside of IR35. IF your inside it, and get caught, expect a letter...Thanks again to those who posted on the thread, you led me to the information I needed.

Cheshire · Master Book-keeper

Oooh - how about posting some. Although I might need my boss to slap my legs as this aint getting my work done. Oh yes - I am da boss!

abacus12345 · Guru

He he. http://www.contractorweekly.com/contractor-news/tax-a-ir35-news/493-ir35-cases-that-shook-the-world Scroll down to read through

Cheshire · Master Book-keeper

Hi Johnny, thanks for the link. Not had time to read it yet, but Ive stuffed it into the favourites box for if I ever get any time, which has rarely happened since Oct 2014!

abacus12345 · Guru

No problem - I have stacks of favourites, always forgetting to revisit them!