Self employed - where to start

Amber07

Looking for some advice please....

Basically hubby was told a few days ago that the business he was working for had lost their financial backing and they have to let him go. He finished up today.

Fortunately he went to see an ex employer who has agreed to take him on, but he wants hubby to just present him with an invoice every week for hours worked and he will pay him by cheque.

We have figured out this is to save him paying holiday entitlement with summer around the corner, and save paperwork for him, but neither of us knows where to start really.

Obviously, it will all fall to me, which I don't mind doing but I just don't have a clue, but am willing to learn.

If anyone can give me advice on how an invoice should be presented, what should be on it, and the biggie...what do I do about tax and NI? How much, what percentage etc? Or is there a website which will explain things simply?

Any advice gratefully received, thanks.

tabskitten

You register with the tax office as self employed

fengirl_2

As you have rightly guessed, the employer is trying to evade his responsibilities and your OH should not collude in this. Ask to see the HMRC ruling that this is a self employed position and if he can't produce it, then point out that he should be an employee. The employer's duty is to ensure that tax and NI are deducted and if he doesn not, then he is liable.

paulwf

Not only is the employer avoiding holiday pay (a minimum of 5.6 weeks) and cutting down admin, but they also don't have to pay sick pay or paternity leave, the number of hours (if any) won't be guaranteed and they can terminate the contract at any time so no redundancy.

So, not only do you lose out on pay but it is also means you can't plan for the long term as any illness or if the company is quiet your husband can be dismissed just like that.

Emmzi

before we get all tense about ex employer being a tax evader shall we ask other questions?
- can hubby pick own holidays and own work hours
- is rate of pay greaater than normal to cover hubby's holidays, insurances, etc
- can hubby also work for other people

It may actually be a *good* thing, getting him to set up as SE, as if he can get more than one person to use his services, he is a lot less vulnerable to the rounds of redundancy he's been going through lately.

Amber, try business link. I reckon once *you* get on there you'll start thinking of other way package this. I'd go take all the free advice on offer.

http://www.businesslink.gov.uk/bdotg/action/home

fengirl_2

It's not a 'good thing' if it's unlawful!

Emmzi

but we don't have enough information to know if it is unlawful yet. We're all just guessing. Amber says she has "figured it out" but we don't know what that is based on. Lots of questions to ask first.

micmac22

if you know an accountant ask their advice first, 2 options that i know of depending on type of work and expenses that you will incure. cis4 card for sub contractors, or vat reg. (if new boss has asked for invoices it to include vat then you have to be vat reg)

you will charge a higher hour/day rate to cover your holiday/sickness pay ect. hols arranged by agrement or you may not be used again.

remember to insure your car / van for business and private use.

you need public liability insurance if not at 1 place of work all the time. (covers you just in case)

as other posts have pointed out check out you gov site. but chat to accountant first easier to understand than you gov web site.

good luck self employment has many perks.

paulwf

Ex-employer suggests that unless the job role has radically changed he should be taken on again as employed.

Self employment doesn't come with any perks unless it is genuine self employment where you can pick and choose when to work, set your own pay rate for a job (obviously to be agreed with the client) and incur expenses that can be offset against tax. If it is a regular job but just classed as self employed the OP might well be losing 8 weeks of pay a year (holiday plus a bit of sick pay), in effect around a 15% pay cut.

micmac22

as for invoice paperwork depends what you work as, check out microsoft office online site click on its downloads tag to see invoice templates for ideas.

mine from left to right shows,company logo- my add their add-
date-invoice no-job no-customer/store-hours day/night-@£per hour-miles coverd-expenses.
most important 30 60 90 days payment terms on the bottom of invoice or a 10% charge will be added for late payment. (its up to you to inforce it but advise you put it on)

miles coverd is a good one to have if you drive alot of miles as you can claim upto 0.65p per mile back it to helps keep a record.

also if you have alot of transactions on your normal bank account eg direct debits get another bank account just for the self employed chqs to go into but dont tell the bank its for a business or they will charge you for it. it will make your accounts alot easier to manage.

Amber07

fengirl wrote: »

As you have rightly guessed, the employer is trying to evade his responsibilities and your OH should not collude in this. Ask to see the HMRC ruling that this is a self employed position and if he can't produce it, then point out that he should be an employee. The employer's duty is to ensure that tax and NI are deducted and if he doesn not, then he is liable.

Tbh, we don't have any choice. Either he takes this job 'offer' or it's the job centre Monday Morning.
I figured us paying the tax/NI was the one way to keep it all legal and make sure it gets done.

paulwf wrote: »

Not only is the employer avoiding holiday pay (a minimum of 5.6 weeks) and cutting down admin, but they also don't have to pay sick pay or paternity leave, the number of hours (if any) won't be guaranteed and they can terminate the contract at any time so no redundancy.

So, not only do you lose out on pay but it is also means you can't plan for the long term as any illness or if the company is quiet your husband can be dismissed just like that.

I know, that's the rest of the downsides which were going through my mind. Really hoping it's only going to be temporary, hubby will still be jobhunting. For various reasons (job moves/other stuff) hubby hasn't had any proper holiday time since last May.

Emmzi wrote: »

before we get all tense about ex employer being a tax evader shall we ask other questions?
- can hubby pick own holidays and own work hours No. Mon-Fri 8-5, poss sat overtime. Guess he can take time off when he needs it unpaid.
- is rate of pay greaater than normal to cover hubby's holidays, insurances, etc No, this will actually work out less than hubby earned when he worked for this employer before. The guy knows he is desperate to work. Sadly, we are getting used to being done over by employers
- can hubby also work for other people Probably, but only really Sat afternoon/Sundays but I would prefer him to have the time off.

It may actually be a *good* thing, getting him to set up as SE, as if he can get more than one person to use his services, he is a lot less vulnerable to the rounds of redundancy he's been going through lately.

Amber, try business link. I reckon once *you* get on there you'll start thinking of other way package this. I'd go take all the free advice on offer.

http://www.businesslink.gov.uk/bdotg/action/home

Thanks very much for the business link, I will definitely look into it