We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Any Advice ... Working for a company but paying own Tax & NI

Hi
I wonder if anyone can help me, I have not worked for about 15 years now due to being a stay at home Mum, I have recently been offered a job but not sure whether to take it or not, due to the fact they have told me I have to pay my own tax and NI.
The job entails working from home packing goods up for a local company and they pay me x amount for each item that I pack for them. I have to collect and return the items to be packed to the factory.
They will then calculate from the 1st of the month – to the last day of month how many items I have packed for them x price per item they pay = total, and then pay me the total owing in a further two weeks, so getting paid every six weeks. They have told me they don’t deal with any tax or NI and I would have to sort out paying this myself.
So will I be classed as self employed?
Any advice would be grateful as I don’t really know whether it is worth taking the job as I don’t really understand much about going and paying your own tax and NI.
Thanks in advance
«1

Comments

  • WEEGIE
    WEEGIE Posts: 11,420 Forumite
    Part of the Furniture Combo Breaker
    Please be very careful about taking this job, there are a lot of scams going about, some ask you for upfront fes, if this company asks you for this DO NOT TAKE IT. As a matter of interest who are these people?
    Like good food and drink?
    Try Hotel Chocolat and Baileys.
    :drool: :drool: :smiley:
  • The main issue here is that working for a particular company on a self employed basis is not a matter of your or the company's choice: it is how HMRC look at the relationship that matters most.

    Many companies are trying to keep costs down by avoiding paying the usual employee benefits such as sick pay and holiday pay, and to escape the Employer's NI payments and having to run a payroll. They tell their workers to pay their own income tax and NI.

    Does this company know the definition of self employment? Do they know that they can get fined if HMRC investigate them? Self employed people usually invoice their clients and can turn work down and work for many clients. They have made their own decision to go self employed, and make alternative pension arrangements.

    Would there be a regular commitment to this company?
    Who having known the diamond will concern himself with glass?

    Rudyard Kipling


  • maggiesden
    maggiesden Posts: 38 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    WEEGIE wrote: »
    Please be very careful about taking this job, there are a lot of scams going about, some ask you for upfront fes, if this company asks you for this DO NOT TAKE IT. As a matter of interest who are these people?

    This is a small firm that has been established in our town for about 10 years and they do not require any financial backing from me
  • maggiesden
    maggiesden Posts: 38 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    edited 5 March 2010 at 9:51AM
    The main issue here is that working for a particular company on a self employed basis is not a matter of your or the company's choice: it is how HMRC look at the relationship that matters most.

    Many companies are trying to keep costs down by avoiding paying the usual employee benefits such as sick pay and holiday pay, and to escape the Employer's NI payments and having to run a payroll. They tell their workers to pay their own income tax and NI.

    Does this company know the definition of self employment? Do they know that they can get fined if HMRC investigate them? Self employed people usually invoice their clients and can turn work down and work for many clients. They have made their own decision to go self employed, and make alternative pension arrangements.

    Would there be a regular commitment to this company?

    How it work's is this is a small firm that make various products, they employ about 15 -20 full time staff and when they are busy which is about 75% of the year, they have a about the same amount of people they call upon to help package the products up, which this is the job they are offering me.

    The conditions will be that I am responsible for collecting and returning the work myself, it has to be packaged at my home and they will set the price tariff for how much they pay me to pack each item and lastly it will be on a casual basis where they call me if they have work and I can choose to do it or not.

    Editing : Also I am responsible for paying my own tax & NI contributions and I will be paid by cheque
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    do you know approximately what you expect to earn each year?
  • maggiesden
    maggiesden Posts: 38 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    CLAPTON wrote: »
    do you know approximately what you expect to earn each year?

    Upon asking this I was told other people who are on their books doing the same job earn between £400 and £1200 a month but, it's all dependant on how many orders are placed for their products, and also how quick I can pack the goods too.
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    from what you say you would have to register with HMRC as self employed

    you would need to pay class 2 NI contribution by DD as you will be above the 'small earnings exemption ' level

    you would then need to fill in self assesssment form (or online) the following year

    so if you started working in (say) May 2010 you would need to fill in the tax form by end of January 2012

    you would then need to pay tax on your 'profit' and class 4 NI contributions
  • bryanb
    bryanb Posts: 5,034 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    CLAPTON wrote: »
    from what you say you would have to register with HMRC as self employed

    you would need to pay class 2 NI contribution by DD as you will be above the 'small earnings exemption ' level

    you would then need to fill in self assesssment form (or online) the following year

    so if you started working in (say) May 2010 you would need to fill in the tax form by end of January 2012

    you would then need to pay tax on your 'profit' and class 4 NI contributions

    Can you say what the small earnings exemption level is please?
    This is an open forum, anyone can post and I just did !
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    bryanb wrote: »
    Can you say what the small earnings exemption level is please?


    http://www.hmrc.gov.uk/manuals/ntcmanual/glossary/smallearn.htm

    i.e. below £5,075 per annum in income
  • zygurat789
    zygurat789 Posts: 4,263 Forumite
    Part of the Furniture Combo Breaker
    2010/11 £5075
    The only thing that is constant is change.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 352.1K Banking & Borrowing
  • 253.5K Reduce Debt & Boost Income
  • 454.2K Spending & Discounts
  • 245.1K Work, Benefits & Business
  • 600.7K Mortgages, Homes & Bills
  • 177.5K Life & Family
  • 258.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.