New self employed job with supplied vehicle - trying to figure out tax/ni I would pay

Jimmy_Boy

Hi,

I have applied for a new job which will be a "Self Employed" position. I have never been self employed before and am getting a little baffled by all the rules etc.... All I want to be able to figure out is roughly what my monthly / weekly net income will be to see if it is a viable job option.

I will provide an extract of an email about the job I have applied for :


Job Details:

The job would entail working as a self employed Engineer, working over 6 days a week.

You will be paid £95 per day for the first 3 months, then £100 per day after.

You will be working as a self employed Engineer so will have to pay for your own fuel.

If you exceed 100 miles throughout the day, 13p per mile will be contributed to your fuel costs.

You will have £120 deducted from your weekly wage for rental of the vehicle, insurance cover (which is done automatically and will be stated on your invoice).

Working as a self employed Engineer you will be responsible for arranging you own income tax which is 18% compared to PAYE which is 33%.



The question I have really are

1) Do I have to pay tax on the £120 vehicle rental charge

2) Can I claim back any fuel allowance ?


There are a few ways I can see of figuring this out, but im not sure if any of them are right / wrong!

Working of the principal of me earning £600 per week, I see these options ;


Option a ;

I pay tax/ni on £600 per week


Option b ;

£600 per week
-120 van rental
===========
480 per week to pay tax/ni on


Option c ;

£600 per week
-120 van rental
-120 fuel (estimated)
===========
360 per week to pay tax/ni on


Am I thinking along the right lines at all?

BoGoF

Sounds rather dodgy to me......it doesn't sound like self-employment to me.

And there is no rate of income tax at 18%

dori2o

You need to ask yourself the following questions.

Will you be available to do the same job for another company/person?

Will you have to provide your own tools to do the job.

Who is responsible if there is a problem, i.e a part fitted is fitted incorrect? Will you have to bear the brunt of the cost to replace/repair or will it fall on the contractor?

Will you be carrying out the same duties as those employed by the company?

If you will not be able to carry out work with other contractors/businesses then if you work for the same contractor for a long period of time, HMRC could deem you an employee.

If the company provide you with the tools to do the job, again, you are likely to be deemed an employee

If you would bear no financial costs of any failure on your part and all this cost would fall on the contractor, then again you are likely to be an employee.

Yous see where this is going.

Companies sometimes try and avoid paying costs they are supposed to pay, i.e. Class 1 National Insurance, and statutory payments such as Sick Pay, Holiday Pay, Maternity/Paternity pay, by claiming you are self employed when infact on the true basis of things you are en employee by HMRC's definition.

Don't forget as a Self employed person if you are sick their is no sick pay, not even SSP, neither is their any JSA for 6 months after finishing self employment.

Contact HMRC and ask to speak with a Status Inspector who can provide advice on you correct status.

Chinkle

Agree doesn't sound like self-employment to me - just an employer trying to shirk their responsibilities.

Btw a self-employed person pays the same rate of tax as an employed person its just paid in a different way - ie by self-assesment at the end of the tax year rather than pay-as-you-go.

There is neither a 18% or a 33% tax band currently.


All this adds up to a rather dodgy job ad - I would be very careful pursuing it if I were you OP.

laticsforlife

The 18% they are referring to sounds like CIS deductions which were 18% (I don't klnow if they still are 18%?) which only apply to construction industry, showing how little this 'employer' knows about the scam it is trying to pull.

You can't have a 'wage' as a self-employed person, thats what us employees have.

It's clearly an attempt to shirk employee/employer responsibilities,and you ought to steer well clear, it will end in tears.