new to self-employment (told wrong info from tax office too!!!)

Wiggynut

Hi all

I've literally just registered for self-employment and I'm slightly annoyed (and also kicking myself!!) as when I contacted the tax office in early August to ask how to pay my tax - as the company I worked for started paying me by cheque each week meaning i have to sort the tax & NI.

The tax office said I wasn't self-employed so not to register but I've now found out (I did ask other sources to back this up) that I DO have to register... I'll get a penalty now which is annoying as it was the tax office who said not too.... (I started being paid by cheque back in May of this year!!)

I would like to know if anyone knows any good websites or books etc - ie: sources of information that will tell me about how to be self-employed so that I'm not totally confused and get 'lost' in the system.

I've had a nightmare with the tax office before which took 4 years to sort out (their error not mine) so I'm dreading all this really.

I started as a mature full time student in Sept and have kept working one day per week since... I worked full time hours last week and will work one week after new year until the course starts again.

I know that I've earned just over £1,200 over the tax threashold so far since May and I'll get a bill soon for the NI which I think will be approx £70 (I have to get a tooth fixed... might have to have it taken out instead now!! :rotfl: )

I really can't afford to get an accountant as I've been quoted £300 which on top of the tax and NI I'll be paying is too much really.
I'm wondering whether to just stop working for this company and get a job where the tax is paid!!!

any helpful pointers would be lovely - thank you.
(no family and don't know any accountants types either so I'm on my own!! )

ceeforcat

Explain what you do as, from first glance, you do not seem to be self-employed. How many self-employed people get a cheque from the same company every week? How is this payment calculated?

CIS

If your only working for one company then you may not meet the criteria for self employment , the issue is not a matter than can be self determined by yourself or your employer. HMRC Guidance is here - http://www.hmrc.gov.uk/employment-status/index.htm

Wiggynut

ceeforcat wrote: »

Explain what you do as, from first glance, you do not seem to be self-employed. How many self-employed people get a cheque from the same company every week? How is this payment calculated?

well, this is what the tax office said - I rang them as I went on to the government website and it gave a list of requirements of what self-employed is about and I don't fit those!!!

How is the payment calculated? well, I have to write down what hours I've worked and it's £10 per hour - the boss gives me a cheque for the hours worked (I don't get sick or holiday pay so I'm worse off in some ways but there was no other work at the time!! I had worked for this company for a year before on 3 month contracts then the other employees got made redundant... my contract wasn't continued so I tried temp jobs... the boss then asked if I needed any work so I came back.)

I just figured (and told by the tax office) to keep records (I have a spreadsheet with hours worked, cheque recieved, amount and when banked) and then I'll pay the tax & NI at the end of the year!

Wiggynut

CIS wrote: »

If your only working for one company then you may not meet the criteria for self employment , the issue is not a matter than can be self determined by yourself or your employer. HMRC Guidance is here - http://www.hmrc.gov.uk/employment-status/index.htm

that's what I did... I just rang the self-employment register line and I told them this but they have now registered me!

the self-assessment tax online asks me for the amounts of tax forms sent to me and I haven't received any so I have no idea what to put in the relevant boxes!!!

I rather naively, thought I could enter my total earnings and it would be calculated from that or similar!!!

ceeforcat

Wiggynut wrote: »

How is the payment calculated? well, I have to write down what hours I've worked and it's £10 per hour - the boss gives me a cheque for the hours worked

£10 per hour ...

The boss...???

Unlikely you are self employed:

DO you invoice?
Do you advertise?
DO you do self employed work for anyone else?
Have you headed notepaper?
Have you a separate business bank account?
Do you provide your own equipment?
Do you work at your own premises?

Providing No to any of these questions indicates employment and the onus is on the employer to determine your status.

Wiggynut

ceeforcat wrote: »

£10 per hour ...

The boss...???

Unlikely you are self employed:

DO you invoice? yes - I write down hours worked and total to be paid.
Do you advertise? No - I only work for this company
DO you do self employed work for anyone else? nope
Have you headed notepaper? nope
Have you a separate business bank account? no business account. only student account
Do you provide your own equipment? (I take my own wacom tablet! but not a requirement just prefer it)
Do you work at your own premises? no

Providing No to any of these questions indicates employment and the onus is on the employer to determine your status.

my boss says I'm freelance!

Pennywise

Your boss isn't the person who decides! HMRC decide who is employed and who is self employed. They are the only two options. "freelance" means nothing in tax law. As others have said, follow HMRC's guidelines as to whether or not you are self employed. If you aren't self employed, then the only thing you can be is employed - there's no other option. I think you need to write to the tax office explaining exactly what you do etc and let their "status" inspector decide - they can then go after your "employer" for not deducting tax and NIC if you are found to be an employee.

Wiggynut

Pennywise wrote: »

Your boss isn't the person who decides! HMRC decide who is employed and who is self employed. They are the only two options. "freelance" means nothing in tax law. As others have said, follow HMRC's guidelines as to whether or not you are self employed. If you aren't self employed, then the only thing you can be is employed - there's no other option. I think you need to write to the tax office explaining exactly what you do etc and let their "status" inspector decide - they can then go after your "employer" for not deducting tax and NIC if you are found to be an employee.

I'll write to the tax office then and try that way (I just hope the fact that I've rang the self- employment line to register doesn't confuse issues even further!!!)

it's frustrating as this is why I rang the tax office several time months ago to try and sort this... they said they would send a tax form and I will fill it out and pay the tax at the end of the year... I've not recieved anything from them and it's taken 3 months (of constant calls) to get the online assessment ID numbers, no tax form and I'm worried that the 31st Jan deadline applies to me... I was under the impression that they would want all the info of what I've earned from April 08 to April 09 but I'm confused now!!!

thanks for all your help guys (company xmas dinner now.. everyone has that stomach bug going around so it's going to be fun only 3 of us (and one went home sick!!)

I'll check back on here later this afternoon.

Treading_Water

Just to set your mind at rest - if you are deemed to be self employed, incomes from the period 06 April 08 to 05 April 2009 doesn't have to be declared until after April 2009, when you will be sent a Self assesment form. The form doesn't need to be returned before 30 sep 09 if on paper and 31 Jan 2010 if you register for online. Also any tax to pay won't be due until 31 Jan 2010.

Wiggynut

Treading_Water wrote: »

Just to set your mind at rest - if you are deemed to be self employed, incomes from the period 06 April 08 to 05 April 2009 doesn't have to be declared until after April 2009, when you will be sent a Self assesment form. The form doesn't need to be returned before 30 sep 09 if on paper and 31 Jan 2010 if you register for online. Also any tax to pay won't be due until 31 Jan 2010.

thank you - that's the clearest news I've had in months of trying to find out what/how things happen (and that includes ringing the tax office several times!!)
:beer: