Can I be taxed basic rate AND on a self employed rate?

pKaTz

Hi
I have started a new job recently, and have been asked how I would like to be taxed. I work in sales and have a basic and get paid commission also. But obviously every month I will not get paid the same amount.

I have 2 options:

• Get paid Basic and Commission - And get taxed/NI on both as normal
• Get paid Basic pay with Tax/NI deducted - AND the commission have paid on a self employed basis

With the second option, this has been offered as the better option.
As I will have to pay at the end of the tax year BUT can claim for expenses etc.

Can you be taxed at both a basic rate and self employed rate?

would there any advantage [or disadvantage] to having tax paid separately on my basic and commission?

Many thanks.
I know they say that "tax doesn't have to be taxing" but this is.

tyllwyd

I don't understand - how can you be self-employed when the money is being paid by your employer? Are you sure that it is self-employment that they are talking about?


http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/WorkingAndPayingTax/DG_4015975

Edited to say - maybe the two options are either to be employed, or to be self-employed and paid comission only. I think you need to go back and understand more clearly what you are being offered, and how it would affect you in terms of what rate you would be paid at, your job security, entitlement to holidays etc.

flossy_splodge

I work in Payroll for a firm of accountants and have just asked my boss, a tax adviser and he firstly says the same as the first response post above but also says no-one can advise you properly on the limited info available.
A big factor seems to be how much commission you expect to make and the advice or guidance would be fundamentally different if your expected commission is in 4 figures.
Hope this helps.
It would appear that you are being ill advised at present.
For an employer, if part of your payment is excluded from the PAYE system then it saves them money on employers NIC so they may have a vested interest in what they say to you.
Suggest you pay for a short session with a qualified person.
Good luck.:o

pKaTz

flossy_splodge wrote: »

I work in Payroll for a firm of accountants and have just asked my boss, a tax adviser and he firstly says the same as the first response post above but also says no-one can advise you properly on the limited info available.
A big factor seems to be how much commission you expect to make and the advice or guidance would be fundamentally different if your expected commission is in 4 figures.
Hope this helps.
It would appear that you are being ill advised at present.
For an employer, if part of your payment is excluded from the PAYE system then it saves them money on employers NIC so they may have a vested interest in what they say to you.
Suggest you pay for a short session with a qualified person.
Good luck.:o

thanks fot the replies.

Yes - I can see how it would save my employer from paying NI for me.

What would normally be done if someone was to be paid with commission. Commission could be from around 200 to 800 or 1000 per month.

is the argument that I could claim back travel and other costs valid.

Would I be in a better position if I asked my employer to tax everthing [basic and commission] together?

noh

You can't choose whether your renumeration is paid on a self employed or employed basis.
Your employment status is a matter of fact.
If you are self employed in a particular job all your renumeration is paid to you on that basis.
If you are employed all your renumeration is paid via PAYE.

pKaTz

I work for a small company, and they were suggesting this.
I am going to ask for everything to be taxed and NI'd so that there are no complications.

The only benefit to try and do it separately would be tax avoidance and that is something I do not want to do.

John_Pierpoint

Could you work one week as an office bod on a basic pay and being told what to do (PAYE) and the next week as a commission only salesman ("agent")? I have worked with lots of people who have an ordinary PAYE job 9 - 5 (or perhaps 9 - 12:30) but make probably more in a self employed sales or dealing role in the rest of the 7 days a week and 24 hours of the day. Having a "partner" helps.

I have a feeling it would attract attention if it were for the same firm.

If you are in a master and servant relationship, your master should be providing you with the support you need to do your job.
Presumably they are trying to claim that you are responsible for providing the tools of your trade (ie a car and gallons of fuel?)
In that case I would demand full self employed status (see tax man's guide lines) if I thought the product was a winner..