Transport managers operating as a Sole Trader vs. as a Limited Company

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Transport managers operating as a Sole Trader vs. as a Limited Company

Post by Admin »

It is well known in the industry that the Traffic Commissioners require or very much prefer that transport managers operate as sole traders rather than using limited companies. I personally have seen cases where transport managers were asked to produce bank statements from their personal bank accounts showing that they receive payments directly from their operators, not through limited companies. That requirement seems to come from paragraph 50 of Statutory Document No. 3 where they talk about a "Genuine Link" which in their view means that the transport manager has to be a sole trader.

However, some transport managers who operate using limited companies have said that they've been to public inquiries where this subject came up and there were no issues related to them invoicing their operators through their own limited companies. You can read the following posts and comments to them in our Facebook group for Transport Managers with over 10,000 members:
https://www.facebook.com/groups/cpc.tm/ ... 1722060462
https://www.facebook.com/groups/cpc.tm/ ... 9672467668
https://www.facebook.com/groups/cpc.tm/ ... 2629972373

If you operate as a Sole Trader, most likely you'll be non-VAT-registered and you won't charge your operators VAT. However, if you decide to operate as a limited company despite what has been said above, and if you decide to charge your clients VAT that will make them feel cheated. Most of them view VAT as an additional expense regardless of what it really is and you adding VAT to your invoice will make them angry and may prompt them to start looking for another transport manager who will operate as a sole trader and won't charge them VAT. So this issue will probably create an unnecessary and avoidable confrontation with your client and may cause you to lose some of them. Therefore, just be a sole trader for your work as a transport manager and you won't have any problems, not with your clients, not with the Traffic Commissioners.

If you need a Transport Manager (CPC Holder) or assistance with an Operator's Licence anywhere in the UK, contact Dmitry Nade at TransportForum.com 7 days a week on 07833 684449 (phone and WhatsApp) or email: [email protected]
Bluecorn
Posts: 107
Joined: Sat Jul 10, 2021 6:58 am

Re: Transport managers operating as a Sole Trader vs. as a Limited Company

Post by Bluecorn »

Why say .....a Sole Trader, most likely you'll be non-VAT-registered and you won't charge your operators VAT.
When actually, being voluntary VAT can have some significant benefits to the sole-trader.
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