Tax Reduction Scenario

gandalftheking

Hi all

I'm working for a company that pays me £15 per task completed (this is under paye). I am also registered self employed for other income streams.

My employer, as above, has made a suggestion which I'd like your feedback on as to whether it will be financially beneficial, or make no difference;

She has offered to pay me £6 per task completed through paye, and the remaining £9 per task i would invoice her for every month.

I just need to know if it's worth doing this. My accountant thinks not, but I always like to hear what MSE'ers think...

Many Thanks

Pennywise

Why don't you trust your accountant's advice? It's impossible to say whether you'd be better off or not. Too many unknown factors. OK, at first glance it may seem beneficial, but what if you're already close to a threshold re your self employment and the extra s/e income would push you over it? Would you lose any employment rights by being on a much lower wage (i.e. sick/maternity pay, holiday rights, redundancy, etc)? What is your current level of earnings - are you currently paying tax and NIC on your employment and/or self employment incomes? It is quite feasible that you indeed wouldn't be better off, but only someone who knows the detail of your circumstances can tell you. If you don't trust your accountant, then get a replacement.

gandalftheking

Pennywise wrote: »

Why don't you trust your accountant's advice? It's impossible to say whether you'd be better off or not. Too many unknown factors. OK, at first glance it may seem beneficial, but what if you're already close to a threshold re your self employment and the extra s/e income would push you over it? Would you lose any employment rights by being on a much lower wage (i.e. sick/maternity pay, holiday rights, redundancy, etc)? What is your current level of earnings - are you currently paying tax and NIC on your employment and/or self employment incomes? It is quite feasible that you indeed wouldn't be better off, but only someone who knows the detail of your circumstances can tell you. If you don't trust your accountant, then get a replacement.

I think it's perfectly legitimate to get second opinions, but thanks for the practical pointers.

chrismac1

Whatever the task is, you're either employed or self-employed when you execute it. I suspect your employer has never heard of IR35 or "false self-employment". Google these to find out more!

Lovelyjoolz

Definitely sounds like your employer is trying to reduce their NIC bill. But it holds no advantage for you, so I agree with your accountant and suggest you carry on as you are now.