self employed at £15per hr or contracted at rate £12 per hr

WPN

HappyMJ wrote: »

I'd go the self-employed route every time. Employed through a limited company of which I am a director paid as an employee on a rate that avoids any PAYE tax so it protects my rights to contibutions based benefits. The remainder of the income after any expenses (you can buy all all your own tools out of this tax free) are deducted can be paid as a dividend after company tax of only 20% is paid. You need to know whether the contract rate includes annual leave or is in addition to that rate.

If you are an employee of a limited company, you are not self-employed.

Other than that I agree with what you say

where2start

HappyMJ wrote: »

I'd go the self-employed route every time. Employed through a limited company of which I am a director paid as an employee on a rate that avoids any PAYE tax so it protects my rights to contibutions based benefits. The remainder of the income after any expenses (you can buy all all your own tools out of this tax free) are deducted can be paid as a dividend after company tax of only 20% is paid. You need to know whether the contract rate includes annual leave or is in addition to that rate.

thanks for information...there is no annual leave or paid holidays, but all the same thank you for all the posts.

Hammyman

where2start wrote: »

can anyone advise me on what to do, been offered a position as a HGV technician but i either can join the firm as SELF EMPLOYED get a rate of £15 per hour and get to pay my own taxes etc...or go on contract and get £12 per hour. Any suggestions on the advantages and disadvantages on both sides...or which is best !!

any suggestions appreciated pse !! thank you.

Apart from the fact that technically it breaks the law as it does not meet HMRC criteria for self employment...


OK, lets look at it...

PAYE: £12 per hour.
Holiday pay is approx another 12.8% so your real hourly rate is £13.54. You get all the benefits of protection as an employee under UK employment law.

Self employed:
Pro: You can claim some expenses against tax but you're not likely to have a lot.

Cons directly affecting work:
Absolutely no protections under employment law.
If you have an accident at work and end up losing a thumb or unable to work because of the accident, you cannot sue your employer as you are your employer. The HGV garage is not your employer but your customer.
Depending on how good you are at book-keeping, you may have to pay someone to do your books.
No holiday pay.
They can decide to pay you as and when or not at all and you'd have to take them to court..
No rights to set hours.
They can decide they don't want you for the rest of the shift, a day, a week or a month.
THEY CAN JUST DECIDE ON THE SPOT WITH NO NOTICE WHATSOEVER THAT THEY DO NOT WANT YOU ANY MORE. You have no recourse or any entitlement to pay in lieu of notice if they do this.
You are not actually truly self employed so may end up in trouble with HMRC.

OTHER CONS OF SELF EMPLOYMENT AFFECTING YOUR PERSONAL LIFE:
Absolutely sod all chance of getting any finance, a mortgage or a loan if you want one. Basically when applying for credit, being self employed is like being a leper.
If you end up out of work then if your missus works, you cannot get JSA as you'd only be entitled to income based so it will lose you over £65 per week for up to 6 months.
You will have to add business use to your car insurance otherwise you are uninsured travelling to "work" and back.


...all the above for an extra £1.46 an hour ASSUMING YOU DO YOUR OWN BOOKS or less if you pay someone to do them which doesn't really make it seem worth it to sign away all your protection as an employee does it?

Hammyman

scooby088 wrote: »

I think i would go with the employed option everytime.

You'd sign away all rights as an employee and make it nigh on impossible to get a mortgage or bank loan for an extra £1.46 an hour?

Unbelievable.

Hammyman

HappyMJ wrote: »

I'd go the self-employed route every time. Employed through a limited company of which I am a director paid as an employee on a rate that avoids any PAYE tax so it protects my rights to contibutions based benefits. The remainder of the income after any expenses (you can buy all all your own tools out of this tax free) are deducted can be paid as a dividend after company tax of only 20% is paid. You need to know whether the contract rate includes annual leave or is in addition to that rate.

Company tax is the same as lower rate income tax. You are financially no better off from a tax point of view on your income than PAYE. You USED to be years ago when company tax was 10% but that game was stopped years ago.

Even on PAYE, a mechanic can claim for tools or used to be able to using form P87 - Expenses in Employment.

HappyMJ

Hammyman wrote: »

Company tax is the same as lower rate income tax. You are financially no better off from a tax point of view on your income than PAYE. You USED to be years ago when company tax was 10% but that game was stopped years ago.

Even on PAYE, a mechanic can claim for tools or used to be able to using form P87 - Expenses in Employment.

An employee also pays national insurance. A shareholder with dividends does not.

A mechanic paid on PAYE cannot claim for mileage to/from his employers workplace. A self employed mechanic based from home can claim for mileage to work at the clients premises. At 45p per mile it makes a big difference on my expenses.

HappyMJ

Hammyman wrote: »

You'd sign away all rights as an employee and make it nigh on impossible to get a mortgage or bank loan for an extra £1.46 an hour?

Unbelievable.

Yes I would. Employed as PAYE net pay after tax and NI is £339.19 per week. Contracted through limited company net pay is £428.98 assuming about £100 per week of valid expenses such as mileage and tools and equipment and also accounting for 5.6 weeks leave. Contracting option pays 26% more. £2.50 per hour more. I do that and due to enough expenses I also claim some means tested benefits as well. If I worked as PAYE I wouldn't get any. As far as mortgages and loans go I use my gross contract rate of £15 per hour and that is accepted by the bank as OK.

where2start

thank you for the posts just received now...making things alot clearer now, :j

where2start

thank you for the replies and posts...alot clearer to me now !

where2start

Hammyman wrote: »

Apart from the fact that technically it breaks the law as it does not meet HMRC criteria for self employment...


OK, lets look at it...

PAYE: £12 per hour.
Holiday pay is approx another 12.8% so your real hourly rate is £13.54. You get all the benefits of protection as an employee under UK employment law.

Self employed:
Pro: You can claim some expenses against tax but you're not likely to have a lot.

Cons directly affecting work:
Absolutely no protections under employment law.
If you have an accident at work and end up losing a thumb or unable to work because of the accident, you cannot sue your employer as you are your employer. The HGV garage is not your employer but your customer.
Depending on how good you are at book-keeping, you may have to pay someone to do your books.
No holiday pay.
They can decide to pay you as and when or not at all and you'd have to take them to court..
No rights to set hours.
They can decide they don't want you for the rest of the shift, a day, a week or a month.
THEY CAN JUST DECIDE ON THE SPOT WITH NO NOTICE WHATSOEVER THAT THEY DO NOT WANT YOU ANY MORE. You have no recourse or any entitlement to pay in lieu of notice if they do this.
You are not actually truly self employed so may end up in trouble with HMRC.

OTHER CONS OF SELF EMPLOYMENT AFFECTING YOUR PERSONAL LIFE:
Absolutely sod all chance of getting any finance, a mortgage or a loan if you want one. Basically when applying for credit, being self employed is like being a leper.
If you end up out of work then if your missus works, you cannot get JSA as you'd only be entitled to income based so it will lose you over £65 per week for up to 6 months.
You will have to add business use to your car insurance otherwise you are uninsured travelling to "work" and back.


...all the above for an extra £1.46 an hour ASSUMING YOU DO YOUR OWN BOOKS or less if you pay someone to do them which doesn't really make it seem worth it to sign away all your protection as an employee does it?

thanks for the information...makes alot of sense to me now !