Self-employed contractor,fixed term contract, tax / ni questions

Milltowngirl

Ive just been taken on by Lionbridge as a self-employed internet assessor. It is stated in the contract it is for a period of 11 months maximum. Could I buy a new laptop for the business and claim this as a capital allowance (?) against my future tax bill, knowing that after 11 months I will no longer be self employed ? Is there a minimum time I need to be self employed for, unless the Govt will try and take any tax allowance back ? Would I not be allowed to use this laptop for personal use, either during the 11 months or after I cease being self-employed ? Could I 'get around this' by taking on other self employed casual work, such as mystery shopping for example, so that I still filed a tax return for X amount of years, albeit probably with not enough self-employed income in the future to generate much of a tax bill ?

Also, just a quick question about tax periods. If I started as self employed this week, but dont actually receive any payment until after April 1st, would I have to declare any income income / pay any tax for tax year 2010-11 ? I guess I mean, do you declare income at the date of the income being received or the date the work was completed which generates (the delayed) income ?

Oh, and finally, whilst Im here (!), do I have to pay NI contributions on my self employed income, when I already pay them on my first / full time job (Ill still be in full time PAYE employment as well as this fixed term self employed contract) ? Does it depend on the amount of the self-employed income ?

Sorry for the dumb questions, never been self-employed before, always let my employers sort out my tax before, lol !! Ive had a look on the business link / HMRC websites but am still a bit confused !

Thankyou : )

diable

Are you under an umbrella company and how are you paid or bill the client?

chrismac1

First you need to make sure this is genuine self-employment. PM me for a link if you want more details about this. Moving on to the specific questions:

1. You can claim the business use of the laptop as a business expense - "Equipment Expensed" is a good heading. There are 100% capital allowances up to £100k so it makes no odds if you treat it as an addition.

2. Strictly your self-employment began on the date of your first sales order, during the 10-11 tax year. This is in fact probably good news for you, as you've probably incurred a few expenses in setting up and might end up with a taxable loss in your trading to 5 April. If so, this can be offset against your earned income in this tax year and get you a tax rebate - which will arrive in your bank account 3 weeks or less after you file a self-assessment tax return. So make sure you get a Unique Taxpayer Reference as soon as poss.

3. If your total income exceeds 43,875 (42,485 for 2011-12) you can apply not to pay self-employed NI on the portion above that. Above that the rate drops to 1% on income, compared to 8% - 9% for 2011-12 - below.

There's probably a lot of ways you can benefit from setting up meetings with local accountants for their free 1 hour consultations - most do this.