comparing tax/insurance when self-employed and through payroll

b56c

I'm currently working 4 days a week with 2 1/2 of those being paid as an employee and the other 1 1/2 as a self-employed consultant. It has been suggested that I can be put on the payroll of my currently 'self-employed position' but would have my hours reduced to 1 day a week instead of 1 1/2. This seems beneficial to me for a variety of reasons: my hourly rate will increase and I will be working fewer hours, freeing me up to potentially get another day's work elsewhere; I will be paid for holidays and illness; I will also be able to make pension contributions through the payroll system and I will not have to file my own tax returns. However, I don't actually know how to make a comparison between what I have been earning this year minus tax and self-employed NI and what I will be making next year as an employee. Can anyone help?

taxing

b56c wrote: »

I'm currently working 4 days a week with 2 1/2 of those being paid as an employee and the other 1 1/2 as a self-employed consultant. It has been suggested that I can be put on the payroll of my currently 'self-employed position' but would have my hours reduced to 1 day a week instead of 1 1/2. This seems beneficial to me for a variety of reasons: my hourly rate will increase and I will be working fewer hours, freeing me up to potentially get another day's work elsewhere; I will be paid for holidays and illness; I will also be able to make pension contributions through the payroll system and I will not have to file my own tax returns. However, I don't actually know how to make a comparison between what I have been earning this year minus tax and self-employed NI and what I will be making next year as an employee. Can anyone help?

Oh dear, I see no one is prepared to do the sums here: me neither, sorry.

What I will say is that the whole arrangement (if with the same 'employer) is exceptionally 'odd' and liable to attack by HMRC anyways - as I would guess that you are truly an employee in both roles here .

If two quite separate engagers and engagements, the attraction of employee benefits (sick pay, and paid holidays, right to notice & redundancy etc) must be attractive...particularly if they are gonna put your rate up. Are they going to pay something in to the pension too? If so, that is also very valuable.

With self employment you can usually claim more expenses, like travel & subsistence to the site but, as an employee, this is more difficult as the rules are tighter: you can only claim for expenses that each and every worker in that job would need to spend in doing that actual job. However, it may be your emplyer will now pick up a lot of the expenses you had (computer, printing costs, software updates etc) so probably not an issue.

If faced with a choice, and unless you are able to commend hugely superior hourly rate charge as self employed, then most of us would opt for the security of employment.

Reagrds.