Not paid any tax for 5 years. Help

LyndseyFHTFH

I've been reading this thread with great interest, but haven't yet commented, so this is going to be a long one, that is hopefully helpful even if it might be tough to hear.


I know what has happened to you seems unfair (it probably is) and you feel like the companies that you've been involved with have mislead you and treated you badly (they probably have). However, it is what it is and being angry about it isn't going to fix it, getting wise to the game, channelling your frustration into something productive and sorting it out is.


Do you know what will make the whole industry situation better for HGV drivers? Learn the game. Haulage firms have accountants and lawyers, so they know that they can legally do what they are doing and that it will financially work for them. They have absolutely no responsibility, whatsoever, to make sure that you understand what it means to be a limited company; it's 100% not their problem.


If every driver knew that that £10.50 an hour was actually £7.50 (or whatever) an hour after all of your deductions and none of your limited companies then chose to contract with them, what do you think they'd do? They'd up the money, change the contract or employ directly if the costs were favourable to them. Moaning about it being unfair, quite frankly, won't change a single thing. Wising up to the game and encouraging your fellow drivers to wise up may.


Once you understand the tax situation that you're in through talking to business line, HMRC and a good accountant, you will be able to make a decision about what the next move is to pay back what you owe and whether you want to continue working in the way you are.


You are right, you aren't self-employed. You aren't self employed because your company (the listed company that you are the director of) employs you as it's sole employee. You are not employed by the company whose name is on your uniform or the side of your lorry, you just aren't. That company is contracting to your company, and you, as it's sole employee, are carrying out the work on behalf of your limited company.


It's similar to being a subby on a big building site, for example. Not all of those subbies will be self employed, many will have limited companies with them as a sole employee, like you, so that they can deal with their tax affairs differently, others may be limited companies with a couple of employees (for example, builders with a labourer, or their Mrs/Mr/mate down the road who does the books).


As your limited company employs you, you as the director are responsible for ensuring that you're earning minimum wage, paying tax and NI etc etc. As far as the contracting company (the one whose name is on the uniform you wear) is concerned, they are offering out a piece of work for fulfilment and a company is taking it on. How they expect that work to be undertaken will be detailed in a contract between the two companies, they may detail some bits about what they expect from sub contractor's employees within that contract (for example, some companies might specify that companies that are party to the contract must pay the living wage to employees, but that's an ethical choice not a requirement. From the sound of the companies you deal with, it's likely the contract will stipulate the need to wear the uniform but not what you must be paid)


Warnings etc should be communicated to you as the director of the limited company, not as the employee of the limited company, because you aren't their direct employee. I'd be willing to bet that they know that though and they'll be serving their written warnings in such a way as to reflect that.


You as the company director are responsible for making sure you meet the legal requirements in respect of your employee (aka you), not the contracting firm. In your situation, whether you do the same shift everyday or clock in/out of the same factory doesn't mean that you're employed directly by the factory that you're turning up to, because there is a contract between two companies that makes it clear that you aren't.


As a limited company, you must have a contract somewhere between your company and the haulage company that you do work for. In that contract, there may be a clause that says your limited company can only work for their company. That's perfectly legal and if you signed it, you have to abide by it or you'll be in breach of the contract.


Incidentally, if you've got more than one limited company (which you shouldn't have until you've got to grips with the one you have!) then you may be able to contract to another haulage firm without being in breach of your original contract. For example, haulage firm A has a contract with Ltd Company A, forbidding contracts with other firms; haulage firm B has a contract with Ltd Company B, forbidding contracts with other firms. Ltd Companies A and B are separate commercial entities, it's irrelevant that you are the director and sole employee of both.


In addition, to all of the recommendations for getting professional assistance, I'd add that it would be worth you having any contract/future contracts looked over by a solicitor. If all of the limited companies are trading with the haulage firm under a standard contract, it might be cost-efficient to try and get solicitor's advice with others/as a group so you can share the cost burden. That way, at least, you'll understand what your company is signing up to and be able to make informed decisions about whether to take the contract. There is lots of info online about sub-contracting, but seeing a solicitor would be better.


Now, the really important part that I 100% cannot stress this enough:


You've said before that you're a driver and not a business person but, unfortunately, you ARE a business person now, regardless of whether you've been dragged there kicking and screaming or been lured there by lies.


So your choices are either to BECOME a business person and learn what you need to know or EMPLOY the services of people to help you (at the very least, an accountant and a solicitor for any contracts or disciplinary stuff).


If, as you say, the only way to get work is to do so as a limited company and getting PAYE is not an option, then I'm afraid being "just a driver" is no longer an option available to you. It's better to just face that fact, fair or otherwise, than continue further up you know what creek without a paddle by just hoping it will go away because it won't and HMRC will eventually come knocking.

hgvdriverhelp

LyndseyFHTFH wrote: »

I've been reading this thread with great interest, but haven't yet commented, so this is going to be a long one, that is hopefully helpful even if it might be tough to hear.


I know what has happened to you seems unfair (it probably is) and you feel like the companies that you've been involved with have mislead you and treated you badly (they probably have). However, it is what it is and being angry about it isn't going to fix it, getting wise to the game, channelling your frustration into something productive and sorting it out is.


Do you know what will make the whole industry situation better for HGV drivers? Learn the game. Haulage firms have accountants and lawyers, so they know that they can legally do what they are doing and that it will financially work for them. They have absolutely no responsibility, whatsoever, to make sure that you understand what it means to be a limited company; it's 100% not their problem.


If every driver knew that that £10.50 an hour was actually £7.50 (or whatever) an hour after all of your deductions and none of your limited companies then chose to contract with them, what do you think they'd do? They'd up the money, change the contract or employ directly if the costs were favourable to them. Moaning about it being unfair, quite frankly, won't change a single thing. Wising up to the game and encouraging your fellow drivers to wise up may.


Once you understand the tax situation that you're in through talking to business line, HMRC and a good accountant, you will be able to make a decision about what the next move is to pay back what you owe and whether you want to continue working in the way you are.


You are right, you aren't self-employed. You aren't self employed because your company (the listed company that you are the director of) employs you as it's sole employee. You are not employed by the company whose name is on your uniform or the side of your lorry, you just aren't. That company is contracting to your company, and you, as it's sole employee, are carrying out the work on behalf of your limited company.


It's similar to being a subby on a big building site, for example. Not all of those subbies will be self employed, many will have limited companies with them as a sole employee, like you, so that they can deal with their tax affairs differently, others may be limited companies with a couple of employees (for example, builders with a labourer, or their Mrs/Mr/mate down the road who does the books).


As your limited company employs you, you as the director are responsible for ensuring that you're earning minimum wage, paying tax and NI etc etc. As far as the contracting company (the one whose name is on the uniform you wear) is concerned, they are offering out a piece of work for fulfilment and a company is taking it on. How they expect that work to be undertaken will be detailed in a contract between the two companies, they may detail some bits about what they expect from sub contractor's employees within that contract (for example, some companies might specify that companies that are party to the contract must pay the living wage to employees, but that's an ethical choice not a requirement. From the sound of the companies you deal with, it's likely the contract will stipulate the need to wear the uniform but not what you must be paid)


Warnings etc should be communicated to you as the director of the limited company, not as the employee of the limited company, because you aren't their direct employee. I'd be willing to bet that they know that though and they'll be serving their written warnings in such a way as to reflect that.


You as the company director are responsible for making sure you meet the legal requirements in respect of your employee (aka you), not the contracting firm. In your situation, whether you do the same shift everyday or clock in/out of the same factory doesn't mean that you're employed directly by the factory that you're turning up to, because there is a contract between two companies that makes it clear that you aren't.


As a limited company, you must have a contract somewhere between your company and the haulage company that you do work for. In that contract, there may be a clause that says your limited company can only work for their company. That's perfectly legal and if you signed it, you have to abide by it or you'll be in breach of the contract.


Incidentally, if you've got more than one limited company (which you shouldn't have until you've got to grips with the one you have!) then you may be able to contract to another haulage firm without being in breach of your original contract. For example, haulage firm A has a contract with Ltd Company A, forbidding contracts with other firms; haulage firm B has a contract with Ltd Company B, forbidding contracts with other firms. Ltd Companies A and B are separate commercial entities, it's irrelevant that you are the director and sole employee of both.


In addition, to all of the recommendations for getting professional assistance, I'd add that it would be worth you having any contract/future contracts looked over by a solicitor. If all of the limited companies are trading with the haulage firm under a standard contract, it might be cost-efficient to try and get solicitor's advice with others/as a group so you can share the cost burden. That way, at least, you'll understand what your company is signing up to and be able to make informed decisions about whether to take the contract. There is lots of info online about sub-contracting, but seeing a solicitor would be better.


Now, the really important part that I 100% cannot stress this enough:


You've said before that you're a driver and not a business person but, unfortunately, you ARE a business person now, regardless of whether you've been dragged there kicking and screaming or been lured there by lies.


So your choices are either to BECOME a business person and learn what you need to know or EMPLOY the services of people to help you (at the very least, an accountant and a solicitor for any contracts or disciplinary stuff).


If, as you say, the only way to get work is to do so as a limited company and getting PAYE is not an option, then I'm afraid being "just a driver" is no longer an option available to you. It's better to just face that fact, fair or otherwise, than continue further up you know what creek without a paddle by just hoping it will go away because it won't and HMRC will eventually come knocking.

I have read this twice and i'd like to thank you for going out of your way to write to me, i respect your words i really do . But i am sorry this is ethically and morally wrong.

How far does this have to go before dinner ladies are made to be self employed ? or how about Police men/women ? Fireman/women ? How about Rita who works behind the underwear section in Primark ? should she be a limited company too?
When you go to KFC what would you think to Tarquin behind the serving hatch writing in his little black book the amount of time it took him to serve you because he is trying to claim it back in expenses ? I am sorry but this is just wrong and a huge stress that i don't need anymore.

Windofchange

hgvdriverhelp wrote: »

I have read this twice and i'd like to thank you for going out of your way to write to me, i respect your words i really do . But i am sorry this is ethically and morally wrong.

How far does this have to go before dinner ladies are made to be self employed ? or how about Police men/women ? Fireman/women ? How about Rita who works behind the underwear section in Primark ? should she be a limited company too?
When you go to KFC what would you think to Tarquin behind the serving hatch writing in his little black book the amount of time it took him to serve you because he is trying to claim it back in expenses ? I am sorry but this is just wrong and a huge stress that i don't need anymore.

But as per the above, it doesn't matter what the rights and wrongs of the situation are, the fact is that you are in it! It may well all be a big steaming pile of BS but that won't change the outcome should HMRC start digging. I would suggest it would be wise to get yourself in order, sort out what you can and then go on a crusade against the unjustness of it all.

mumofthetwins

OP I am sorry but it just doesn't seem like you want to help yourself .. people have genuinely tried to offer advice but you seem to just dismiss anything that isn't what you want to hear, I am sorry but its just how the posts are coming across.
I work 3 jobs and pay tax and NI on each of them, in the past I have rented property and completed self assesments and paid tax on this .. im sorry but no mater which way you look at it you need to pay your tax and sort out HMRC before you get into serious trouble.
I don't admit to fully understanding the limited company part but my dad who does run a limited company which is vat exempt and employs numerous staff employs an accountant and he does all the "money" side of it .. its simple really you need to stop feeling sorry for yourself and grab the bull by the horns and sort this mess out before its to late.
sorry to be so brutal but I think its true.

D_M_E

There is a case being heard at the Supreme Court starting today which may have some bearing on this

http://www.bbc.co.uk/news/business-43115219

hgvdriverhelp

D_M_E wrote: »

There is a case being heard at the Supreme Court starting today which may have some bearing on this

http://www.bbc.co.uk/news/business-43115219

Thats right i got a text yesterday to read about this as it's basically what i have been going threw on a much smaller scale.
The company i work for is much bigger, more employees and more nationwide.
DPD have also been in the news over this and are being investigated.
Both companies have 'grey areas' in my opinion, the company i have worked for makes it obvious you are not self employed and they still continue to hire full time staff on full time contracts with regular shift patterns, hours and pay.

nkkingston

If you try and tackle the industry wide issues without solving your own problems first, they'll use your tax issues to silence and belittle you, and shut down discussion of their own wrongdoing. If you speak to business debtline and go to HMRC cap (and budget plan) in hand and start paying it off, then you have a more righteous platform to denounce your employer from. As they always say on the airplane: put your own oxygen mask on first!

D_M_E

Here's another case recently decided by the Supreme Court which sounds similar to your situation

https://www.supremecourt.uk/cases/uksc-2017-0053.html

No news yet on the one I posted above.

fiisch

I have worked as a contractor via a Limited Company, and there are certainly benefits for the individual as well as to the company, if it suits the individual. I can't help feeling you're playing up to the victim role here - when you first went self-employed, I expect you enjoyed a hefty pay rise (if nothing else, from not paying any tax!), although it does sound like you've been had over by this Think Accounting.

I can't help with what's gone on before, but Brookson's are an excellent accountancy firm for managing your business accounts going forwards, and I'd highly recommend - they charge around £70 per month (tax deductible), but they will give you all the hand-holding you need, and they have an online portal which allows you to see from your earnings what you can spend and what you need to hold in reserve for future tax bills. They're also excellent at giving advice to ensure you are tax efficient, without falling foul of the tax laws.

There is a lot of added administration and work to do away from your actual day job to manage your business affairs, and it isn't for everyone, but if managed correctly and you've a decent attendance record, it can work out far more lucrative than a regular PAYE job.