What do you expect from us?

We give 100% customer service to all of our drivers. This includes:

What do we expect from you?

We expect all of our drivers to keep us informed of changes in their circumstances. It is important to tell us of any changes in financial circumstances, i.e. tax credit claims, changes in address and contact information. Please do not go off the radar if you leave your agency or cease driving in a self employed capacity, as in practice, there are usually financial matters to sort out.

How does the scheme work in practice?

the hgvfreelancer process utilises and pulls together several existing tax breaks and only works if the rules are followed by the driver. Day to day there should be very little for you to do, except drive your vehicles as directed. However, on a quarterly basis we expect each driver to complete the monthly expenses return form and to send us copies of large invoices (single invoices detailing purchase that have a total value of £2000), as we may be able to be offset this against your corporation tax or even recover the VAT element.

We also require copies of all bank statements when we prepare your annual accounts, usually 15 months after you set up the company.

How do the Agency Workers Regulations (AWR) affect me?

These are regulations which arise out of the European Agency Workers Directive, but by operating as a limited company you as the driver will be operating outside the scope of these regulations and therefore can work for any agency at anytime and with any frequency. AWR came into force on 1 October 2011 and gives temporary agency workers the right to the same pay and working conditions that they would have been entitled to had they been directly employed into the same role by the hirer.

All temporary agency workers including those employed through umbrella limited companies are affected by this legislation. However, because you operate as an independent limited company (which makes you genuinely self-employed) you are excluded, provided you can demonstrate that you are genuinely in business on your own account  i.e. all income is paid directly into the limited company bank account and that therefore the Agency is your client rather than their Principal.

Do I need Public Liability Insurance?

Yes, it is essential that all self employed drivers have their own public liability insurance for their limited company. (A minimum of £2million cover is recommended).

If you injure a member of the public for example and they claim for damages, Agencies are increasingly expecting the self employed contractor to pick up part of the claim with their own policy.

We can provide details of suitable brokers (if required).

Do I need a separate bank account for my limited company?

Yes, it is important that all drivers have a separate limited company bank account for their business. This ensures compliance with AWR and other HMRC requirements.

Do I need to have my own PAYE scheme?

Yes, it is essential that all drivers have a PAYE scheme for their limited company. 

The importance of this:

i. Ensures you pay the correct amount of NI and income tax per tax year.

ii. Ensures your NIC stamp for the year entitles you to statutory state benefits (if required).

iii. Supports any mortgage or rental tenancy requirements.

iv. Supports any HMRC tax credit claims.

Will I still get my NIC stamp?

Yes. For employees earning between the lower earnings limit and the minimum threshold, you get your full NIC stamp but do not need to make any NIC contributions. This why hgvfreelancer recommends that you pay yourself the at the minimum threshold as a wage. We will keep you advised annually as to what these limits are, and provide a schedule of suggested salary and dividend payment amounts each year.

Example of current minimum threshold and tax allowance for recent years:

2014-15 £7,956 /£10,000

2015-16 £8,060 /£10,600

Am I required to complete a self assessment tax return?

Yes, as a limited company director, you may be required to complete a self assessment tax return for the period subsequent to setting up your limited company. In practice most drivers are familiar with self assessments. However we can provide assistance if required.

What expenses can I legitimately claim?

As a rule of thumb, business related expenditure can be claimed against your corporation tax bill and personal expenditure is generally not allowable. We will advise you of legitimate expenses that you can claim as part of your welcome pack on joining

Company Car vs Own Car

We are often asked by our drivers whether their limited companies can own a company car. There is no right and wrong answer. However, in our experience, most company cars are not tax efficient, and therefore do not work out to be a financially beneficial option. It is far more tax efficient for the driver to claim business miles through their own cars rather than own and operate a company car.

Flat Rate VAT Scheme

The flat rate VAT scheme is designed to help small businesses by taking some of the work out of accounting for VAT. HMRC allow businesses to keep a percentage of the VAT it collects on its behalf in lieu of accounting for VAT incurred. The current flat rate for drivers is 10%, which means that in essence nearly half the VAT charged to the Agency can be retained by the business. If you are in the first year of your VAT registration you get an extra 1% off the amount of VAT that the Company pays over to the HMRC. The numbers can be summarised as follows:

Quarter ended 31 March 2015:

Sales (without VAT) - £10,000

Sales (with VAT) - £12,000

VAT Charged to Agency is therefore £2,000

Amount of VAT payable at 9%* = £12,000 x 9% = £1,080

Amount saved by using the flat rate VAT scheme = £2,000 - £1,080 = £920

This example demonstrates that it is extremely advantageous for your business to be part of the flat rate VAT scheme.

What happens if you want to leave hgvfreelancer?

You are entitled to leave our services with 30 days written notice (we ask for a reasonable amount of time to sort out your affairs responsibly). If you want to dispense with our services for another accountancy practice we ask that the new accountant follows the Professional Etiquette guidelines on taking on new clients.

If you wish to dispense with your company and cease trading in that name, there is a set procedure to follow, which can take several months to complete. The company will not just be closed, it will need to be ended carefully and correctly with special attention to clearing all debts and assets.