changing from self employed to employed

leese2504

Evening,

Hoping for some help, for past 4 years my husband has been a sub-contractor in the building industry, as of Tuesday he is finally starting permanent :Temployment for a company he has never worked for before as a PAYE. My question is, as he won't have a P45 to hand in to his new employer, what forms if any does he fill in for the inland revenue to calculate his correct tax code? Also does he need to notify anyone within inland revenue that he is no longer self employed ( he hasn't had any work since the start of this tax year and hasn't claimed any benefits ) He has spoken to someone within the inland revenue but they didn't seem to know.

Thanks in advance

jenando999

Hi I'm no expert, but the company I work for deals with CIS and PAYE. When we employed some joiners who had previously worked for us as self-employed subcontractors, we required them to fill in a P46 as they didn't have a P45. This should be the case for anyone without a P45. When the employer submits this to HMRC they will be advised of the proper tax code for your husband.

Our joiners started employment in October and were on a week/month 1 tax code until the start of the new tax year. I would suggest that as your hubby has started employment right at the start of the new tax year he will probably be on the normal cumulative tax code as long as he has completed his tax returns properly.

Congrats to your hubby on getting a permanent position in these difficult times :T

fengirl_2

He will need to ring HMRC to say he has stopped being self employed so that they canc ancel his DD for class 2 NIC. he will need to self assess in the usual way so that he can declare his final profits.

His new employer will give hinm a P46 to sign to say this is his only job. he wont be on emergency code because we are at the start of the tax year and employers have the authority to operate 647L on a cumulative basis, but he will need to ring his tax office to claim his fixed rate expense allowance (assuming he is still in the building trade).

mrkbrrws

He needs to contact the National Insurance Contributions office to cancel any Class 2 NICs.

http://search2.hmrc.gov.uk/kbroker/hmrc/contactus/search.ladv?sr=0&as=1&cs=ISO-8859-1&sc=hmrc&sf=&sm=0&nh=50&ha=34&tx0=370292&fl0=__dsid:&tx1=2042&raction=view

When you start a new job without a P45 you should be given a P46 to complete. There is a box on that form that states you have received no income since 6 April - which applies in this case. Ticking that box puts you on a standard personal allowance code (647L) from the start.

Then on the 2008/09 Tax Return there is a box where you put the cessation date of the trade. It might also be a good idea to spell it out in the additional information box.

If any payments on account are calculated for 2009/10, remember that you can reduce them to Nil if you expect all tax to be paid under PAYE in the current tax year.