Self Employed or Staff?

serapis

Hi all. Just a quick question.

I have recently been offered a job paying a basic rate of £18,000pa but I have been offered the chance to be self employed.

What are the benefits to being self employed rather than staff? Everyone who is self employed says I should do it, but I don’t know what the actual benefits will be and there is little information on what I can claim back etc from the government sites for obvious reasons.

grey_lady

What will they pay you on a self-employed basis?

What kind of job / work is it?

serapis

I'm not too sure tbh as I have yet to start working for the company.

Becles

You can't decide if you want to be employed or self employed. Generally if it's one fixed place where you go to work, they supply all the materials etc., to do the job, you work the hours they say you have to and you can't send someone else in to do the work, then you are employed.

If you are self employed, you won't get paid holiday or sick leave, you'll have to pay Class 2 NI which means you can't claim JSA and other benefits if you need to at a later date, and you need to do a tax return each year to pay your income tax, plus Class 4 NI.

scotsbob

The big advantage is you will get the £18000 without any NI or tax deductions. It will then be up to you to declare your earnings

You should also be able to deduct a variety of expenses as a self employed person against tax.

Many accountants do free initial consultations (they hope you will then use them for your tax returns), why not go to one and discuss the options.

If you do go self employed try to get at least some of your salary in cash.

PassedAtFailing

Becles wrote: »

You can't decide if you want to be employed or self employed. Generally if it's one fixed place where you go to work, they supply all the materials etc., to do the job, you work the hours they say you have to and you can't send someone else in to do the work, then you are employed.

If you are self employed, you won't get paid holiday or sick leave, you'll have to pay Class 2 NI which means you can't claim JSA and other benefits if you need to at a later date, and you need to do a tax return each year to pay your income tax, plus Class 4 NI.

This is true.

You do not decide whether or not you are self-employed, your working habits do.

Employers tend to try to convince workers to become self-employed to save money and hassle. They shouldn't do though unless the worker is self-employed in the eyes of HMRC.

If you are allowed to send someone to do the work for you when you are not able to, then you're self-employed. If you're able to choose your own working hours, then you're probably self-employed. Likewise, as self-employed, you may lose entitlement to a number of things an employed person may have.

On a side note, I would be very wary of accepting a job that I didn't "know about" - you should be aware there are many scam jobs about. I'd also be wary of the an employer that believed it was up to the worker to decide whether they are self-employed or not - because neither the worker is nor the employer.

If they are simply trying to avoid the hassle of payroll and the like, then they should be using an agency.

paulwf

With self employment you need to be asking for 25% more than a salary, preferably 50% more. This is because you don't get holiday pay, sick pay, redundancy, any job security, maternity rights and so on.

Although you can offset expenses against tax that doesn't save a great deal when if you were employed the company should be covering the total cost of those expenses.

Having to keep tax money to one side sometimes for over a year and doing your self assessment is extra hassle for no extra gain. I would take the employed position...not that they should be able to offer both options anyway.

gladispanivas

In terms of flexibility and a greater control of the work-life balance, being self-employed provides so much more than being an employee ever could.

- Won't be bothered by office politics
- You can take a long lunch break and no one will say a word
- Cut down on commute
- Opportunity to collaborate with who you want with no restrictions

Josephine
Time attendance, Payroll, HR software.