Could do with some advice regarding contracting and vehicle use.

[D88MK]

Hi there firstly forgive me for my lack of knowledge I'm quite new to this.
Since the new budget I'm no longer classed as self employed and am being forced into an umbrella scheme. The money I come out with is less due to the extra tax implications but I'm not gaining any rights I'm still being classed as a contractor that can be dropped, no permanent hours.
I wanted to create my own limited company in which I could sort my own tax and VAT and invoice the company I do work for. I have a good accountant but he's not sure how to advise me on my vehicle use.

I have a vehicle and fuel card supplied by the company I do work for, but I'm told that this will create issues going limited?
Before I used my own vehicle and did 46k miles in a year so at the time thought it great they offered me a vehicle due to the expense of using my own.
Just to add the office is a 90 mile round trip so the vehicle is parked on my road.

I'm really stuck on what to do, do I have to hand my fuel card back to go limited?
Do I incur any tax or penalties, or can I keep using the vehicle and fuel car and not be taxed or penalised for having it?

Thanks Matt

[cojak]

You need to sort out your employment status first.

You say that you are being forced into an umbrella scheme? By who and what is this umbrella scheme? Do you just mean an umbrella company such as ContractorUmbrella or a scheme that sounds like a loan?

And what about this company fuel card?

If you go Ltd you'll be working for the Ltd and of course will have to return your card to your 'old' employer. But how can you go Ltd if you're being forced into the umbrella?

Your post is too confusing to give you any useful advice I'm afraid.

PS. The new budget has no impact on your employment status, your employer/client is the one doing that.

[cojak]

It sounds as if you really need to read up on contracting.

You'll find a lot of answers to your questions within the CUK website.

On the right you'll find CUK Navigation. >>>>>>>>>

Look down and you'll come to the First Timers section. Have a read through there.

Basic expenses questions answered here: Contractor Expenses - How to claim Travel and other expenses via Limited Company or Umbrella

Then pay particular attention to IR35.

If you go into the Accounting/Legal forum you'll discover the thread Basic advice when running your own contractor business.

Guide to Contracts also has some good articles.

But most importantly - find out what kind of umbrella you are working for.

[D88MK]

Thank you. I was self employed getting paid through a company that does all my tax stuff, now that company is making us all umbrella or we can go limited. So effectively I'm being forced into it by either paying more tax or giving my fuel card back 😰

Granted I'm in over my head here, but from what I make out this umbrella is all of the bad things about being PAYE but no benefits of being a contractor

[Brian Potter]

Hi and Welcome

I have a good accountant but he's not sure how to advise me on my vehicle use.

You need to address this by finding an accountant who is sure about whatever you ask. For the sake of just over a £1000 per year (claimable) do look into hiring a decent firm to look after your finances AND answer your questions. A few of them post on these very forums.

cojak covered everything.

[Scruff]

Please say who the company was who was "doing all my tax stuff"? Sounds like they were stuffing you up the tax duff... Not looking very favourable if they are forcing you to do anything, so if you explain your present situation more clearly, you are likely to get some more objective advice?

[northernladuk]

Wow LOL... Don't see many like this!!

I have a good accountant but he's not sure how to advise me on my vehicle use.

No you don't.....

[LisaContractorUmbrella]

Thank you. I was self employed getting paid through a company that does all my tax stuff, now that company is making us all umbrella or we can go limited. So effectively I'm being forced into it by either paying more tax or giving my fuel card back 😰

Granted I'm in over my head here, but from what I make out this umbrella is all of the bad things about being PAYE but no benefits of being a contractor

Cojak has given you some great advice - you really need to read up. If your current company has been operating a false self employment scheme i.e. you register as a sole trader with HMRC but they then process your pay in the same way as an umbrella company would but avoiding the employer's NI liability then they are correct to move you to a proper umbrella situation or a PSC.

If you are inside IR35 (have a look at the guides Cojak pointed out) then your tax position will be virtually the same as if you were employed by a proper umbrella company; it is only if you are outside IR35 that your earnings will be significantly higher through a PSC. With a proper umbrella arrangement you become their employee which means that you have the statutory rights of any other employee e.g. sick pay, maternity pay etc.

[TheFaQQer]

I have a vehicle and fuel card supplied by the company I do work for, but I'm told that this will create issues going limited?

The client provides you with a company car and fuel?

I don't see any different issues being created by going umbrella or Ltd, to be honest - you'll still need to make sure that the benefit is being declared properly and any appropriate tax is being paid. But that's no different than at present - I'd expect there to be a benefit in kind arising from this situation, no matter who is paying for it.

I'd move accountants, if they cannot understand how to account for any of this.