Self Employment Help!

Wherehasmymoneygone

Afternoon All,

Just after some advice and I thought I would ask here hoping someone is self employed and can help me.

Basically my husband is working for a company on a temporary basis but he has an agency handling the payments and tax. We have had numerous problems with the agency not paying what’s expected and paying things late so he is considering becoming self employed.

At the moment he does the work, emails the agency his hours, they invoice the company he works for, the company pays the agency, the agency then pay my husband. Very long winded. If we cut out the agency my husband will just invoice the company for hours work and the company will pay my husband - this will also cut out the agency monthly cost.

I have a few questions:

1. Would the company just pay my husband direct into his bank account?

2. Am I correct in thinking that tax is paid at the end of the year via a self assessment?

3. If the above is correct, am I right in thinking he would keep what the company pay him on a monthly basis and then just pay the tax at the end of the year (paying monthly at the mo - we will prob put money aside to ensure no short comings)

4. What about NI - Is this done in the same way?

5. Expenses - are they claimed yearly? And is there something that defines what expenses are?

6. Would we at the end of the financial year we do a self assessment and then they tell us what he owe tax wise - we then pay it?

It sounds a bit easier than I expected and would save time, hassle and money but I am just worried about not paying tax or the right amount of tax and then having mr scary tax man on our back!

Thanks in advance! :beer:

fengirl_2

Your husband cannot just choose to be self employed with this employer. As he is employed via an agency, I would expect this to be an employed position rather than self employed. He needs to ask hmslef:
1. Does he set his own rate of pay?
2. Does he come and go as he pelases?
3, Can he send smeone else to do the job?
4. Does he have to put work done incorrectly right in his own time?

If the answer is no, then he is probaby an employee. an employer cannot just treat someone as self employed at whim - failure to operate PAYE is anoffence. Also, you husband would not be entitled to holiday or sick pay, would have to provide his own insurance and would have reduced benefit rights.

Wherehasmymoneygone

fengirl wrote: »

Your husband cannot just choose to be self employed with this employer. As he is employed via an agency, I would expect this to be an employed position rather than self employed. He needs to ask hmslef:
1. Does he set his own rate of pay?
2. Does he come and go as he pelases?
3, Can he send smeone else to do the job?
4. Does he have to put work done incorrectly right in his own time?

If the answer is no, then he is probaby an employee. an employer cannot just treat someone as self employed at whim - failure to operate PAYE is anoffence. Also, you husband would not be entitled to holiday or sick pay, would have to provide his own insurance and would have reduced benefit rights.

Hi, thanks for getting back to me.

He isnt employed by an agency, he just has a company handling the money side of things. He drew up his contract and he chose his daily rate which the people that wanted him to work for them agreed.

He was in a position for 5 years through an agency AND a company who did his tax and pay etc. When that finished he was asked if he wanted to start a new position to which he agreed but as it was nothing to do with the old position it wasnt through the agency. He asked the company who do his tax if he could still use them, they said yes so he drew up the contract and got it signed by the people he was going to work for. He chose his hours and rate.

We asked the company to do his tax and stuff so we can ask them not to and do it ourselves I assumed. Perhaps not.

Wherehasmymoneygone

Oh, and he currently doesnt get paid for sick, holiday or training days off.

Horace

If he sets himself up as self employed there is no guarantee that he will get the contract to work for the company who employs him via the agency. If say the company chose to employ him directly then they would have to pay the agency a fee - usually an extortionate one.

If your OH has training days off...surely these are work days and they should be included on his time sheet so that he can be paid for them? As I understand it, your husband works for the agency who contracts him out to work for this company. Your husband should really be talking to the agency and not just over the phone - go and sit in their offices and have words with them.

If he goes self employed, then he needs to contact HMRC and then part of the income goes towards his tax and NI. But remember he works for the agency and the company he is contracted out to pays the agency for the hours worked and then the agency take their cut and pay your OH.

Wherehasmymoneygone

Hi,

I shouldnt have used the word agency in my first post as its made things complicated.

He does not work for an agency, therefore there are no issues re him leaving the agency and no fees will be due.

He drew up the contract between himself and the company he works for now. He chose his pay and hours.

Basically he does the work then has a contractor umbrella company who deal with the pay.

They do his tax etc and then pay him.

I wanted to cut our the umbrella company and do it ourselves as they often mess things up like pay days and that has an effect on my bills and sanity!

I will just have to leave it as it is then.

fengirl_2

He annot be self employed which is why he is using an umbrella company - to get round the rules on being self employed. If he wants to do away with the umbrella company, he would need to set up his own company which would do the same thing as the umbrella company. He would need to see an accountant to draw up a memorandum and Articles of assn, register with Companies House, HMRC, etc.

rich_months

As fengirl says, his only realistic options are form his own ltd company or work through an umbrella.

He shouldn't be tied to the umbrella, so maybe it's time to start looking around for a new one? Try https://www.freelancesupermarket.com and https://www.umbrellasupermarket.com for ideas as a starting point. Reputable ones don't charge a fee to leave.

tiddly_widdly

Im freelance and work for several colleges and companies at the same time. I invoice them directly, I deal with my own Tax and NI. It takes a quick phone call to the inland revenue, NI is paid quarterly - they send a bill, I send a cheque. I fill in a tax return and go from there. Im not a limited company or registered with companies house etc. Ive been self employed since 1996 and it works fine