Self employed tax & NI?

caz246

Hi all,

If my partner was to accept a driving job on a self employed basis how would this work? I know nothing about paying tax/NI when self employed, is it a major hassle? He would get a monthly wage and it would be up to him to pay his tax etc.

I'm also worried how this would affect tax credits when I go back to work after maternity leave if he did accept.

Any help appreciated.

Notmyrealname

It is most likely not to meet HMRC's requirements for self employment. An employer can't just decide whether a position is self employed or not. Employers do this because it saves them between 10-25% on the wage bill and they get to wash their hands of all that inconvenient employment legislation.

Anyway, that aside it isn't hard to do. The hardest part is working out what expenses you can claim. However what is more important is the money and other things. To employ someone it actually costs about 25% more than the employee gets paid per hour in holiday pay and employers NI. So if the PAYE rate for a job is £8/hr, self employed you want to be on at least £10 just so the company makes no savings over taking someone on PAYE.

He will have no rights as an employee - no right to set hours, no right to notice of termination, no SSP, no holiday pay, won't be covered under the "employers" liability insurance - nothing, nada zip. He doesn't even have the right to be paid on time and may even find he doesn't get paid at all, needing to chase the company through the court for the money. He needs to get a "Terms of Business" sorted out that he must get them to sign which sets out when payment is due and also has clauses he is not liable for any costs or losses arising out of his actions otherwise prang the van and he could find he has to pay the repair bill.

Tax credits aren't an issue - you give them the projected profit. However unemployment benefits are another matter. He will not be able to claim any contributions based benefits except ESA. Even though he will be paying NI it will be Class 2 which doesn't count.

caz246

Thanks for your reply.

He has recently started working as a driver for an agency and has been offered full time hours by one of the owner drivers. I am aware he wouldn't get any holiday/sick pay etc which is obviosuly a concern but he has been out of work for nearly a year so this is the best offer so far, although not ideal.

How would he pay his tax/NI if he is not classed as 'self employed'? What he register as with HMRC? Aplogies for all the questions but I have no idea and neither does he, he asked the guy if he would receive a a P60 as we'd need it for tax credits and he said no.