Employer wants me to go self employed

smileythirtysomething

Good morning,
I need some advice please. I have worked for the same employer for 3 years on a full time basis. I recently handed in my notice as I wanted to pursue a career as a freelance designer. In the meantime my employer has offered me a position working 2 days a week but would like me to be paid on a self employed status whereby I would issue an invoice on the 21st of the month to be paid along with the rest of the staff on the 28th. Is this dodgy?? She said that this would give me tax benefits. My boss knows that I may be trying for a family soon, if I am self employed will this scupper any maternity pay/allowance I may get. All advice very very welcome :-)

the_photo_boy

I think you would definitely fall foul of the IR35 legislation. Plenty of info on Google about it, but I would steer clear of this arrangement.

fengirl_2

IR 35 does not apply to sole traders.
Being self employed may give you tax benefits, but it will also give your employer benefits in that they wont have to pay NIC, holiday pay, sick pay or redundancy pay and they could just get rid of you at will.
An employer cannot just say you are self employed - they are responsible for checking with HMRC that this arrnagement meets the criteria for self employment. As your employer to see the ruling from HMRC that this is a self employed position. I bet they can't produce it.

McKneff

Its the HMRC who decides who is classed as self employed not an individual.

You'd be best ringing them.

Youre very brave leaving a secure job just before thinking about planning a family.

paulwf

Your tax benefit for being self employed might be tiny. If you've already got the software and equipment and don't need to travel there's not much you can class as expenses. You can claim some expenses for working from home but that's only £3 a week unless you start calculating domestic v business use and produce bills.

Working 2 days a week you might be below the tax threshold anyway (and the new government are increasing the threshold) so your tax advantage could be nil. Not a great deal when you lose all the benefits fengirl lists.

Debt_Free_Chick

It sounds to me as though your employer has just handed you your first assignment as a freelance designer!

This happens all the time and provided the paper trail is correct, there's nothing to worry about.

You should write in your freelance capacity to your ex-employer, outlining the work that needs to be done and confirm you can do it for x hours per month. The x is hours that adds up to two days. I would be inclined to commit to x hours spread over the month, rather than "every Monday and Thursday" as that suggests that you are being employed by them for two days a week.

What your ex employer has suggested is very common and perfectly legal, provided that they are contracting you to provide a specific service and not simply seeking to employ you for two days a week.

Becles

If you go self employed and are planning a family, make sure you do not claim the NI exemption certificate and make sure you do pay Class 2 NI.

If you do that you'll be entitled to the full maternity allowance which is around £120 a week for 39 weeks.

If you claim the exemption certificate, you'll only be entitled to £27 a week MA.

DVardysShadow

the_photo_boy wrote: »

I think you would definitely fall foul of the IR35 legislation. Plenty of info on Google about it, but I would steer clear of this arrangement.

As soon as OP picks up another assignment, being self employed is well justified.

PasturesNew

smileythirtysomething wrote: »

Good morning,
I need some advice please. I have worked for the same employer for 3 years on a full time basis. I recently handed in my notice as I wanted to pursue a career as a freelance designer. In the meantime my employer has offered me a position working 2 days a week but would like me to be paid on a self employed status whereby I would issue an invoice on the 21st of the month to be paid along with the rest of the staff on the 28th. Is this dodgy?? She said that this would give me tax benefits. My boss knows that I may be trying for a family soon, if I am self employed will this scupper any maternity pay/allowance I may get. All advice very very welcome :-)

I'd say it's normal. You handed in your notice to become a freelancer ... and your boss has offered you some freelance work.

flossy_splodge

If you were going to go freelance then this is just freelance work. To go freelance you need to be registered as self employed.
However be aware that as outlined above it is often the case that most of the 'advantage' is to the employer not to you unless your circumstances afall into a particular arena.
I had no choice, but I can tell you i would prefer employed anytime.
If I am sick or want a holiday, no provision, all down to me.
Take care.