Going self employed - Help Needed

chrissy_stevo

Hi

I currently work and am in full time employment with tata steel. I am seeking to leave and start working on an ad hoc basis as a contactor. Now, I am clueless in this field and wondered if there is a difference between self employed and contractor.

I am wondering if there are differences between contractor and self employed in respect to the following items:

1. I am currently in the process of buying my first home, what differences are there in terms of how I would get a mortgage between being in full time employment and in being a) a contractor and b) self employed.

2. I also am wodnering how being a) a contractor and b) self emplyed effects my rights to things like JSA when looking for the next job and sick pay if sick.

Totally alien situation to me this as I have always been in full time emplyment. Is there anywhere I can go to or anyone I can sepak to for advice.

Any help appreciated.

Chrissy

Notmyrealname

chrissy_stevo wrote: »

I am wondering if there are differences between contractor and self employed in respect to the following items:

1. I am currently in the process of buying my first home, what differences are there in terms of how I would get a mortgage between being in full time employment and in being a) a contractor and b) self employed.

None. You stand equally as little chance with both.

2. I also am wodnering how being a) a contractor and b) self emplyed effects my rights to things like JSA when looking for the next job and sick pay if sick.

It depends on how you form your business and how you pay yourself, It is Class 1 NIC that counts so if you form as a Ltd Company and are an employee of that company with Class 1 NIC paid, you will get Contributions based JSA.

Totally alien situation to me this as I have always been in full time emplyment. Is there anywhere I can go to or anyone I can sepak to for advice.

A tax accountant. They'll advise you of the pitfalls, the best way to form the business.

McKneff

You have no security mind, they could dry up the work they give you at a moments notice.

On the books you have sick pay, holiday pay, etc etc etc.

And also dont forget, Its HMRC who decides whether yu can go self employed or not, you cant just choose to.

MonkeySaving?

Some crap advice in this thread, OP download the guide from the PCG and read it thoroughly as it tells you all you need to know.
http://www.pcg.org.uk/cms/index.php?option=com_content&view=article&id=6343:pcgs-complete-guide-to-freelancing-new&catid=806:going-freelance&Itemid=1316

As a contractor you are effectively self employed unless you go through an Umbrella company, HMRC has no say in it, you either declare yourself self employed or you don't. As for house buying, forget it if you decide to contract, at least for the first 3 years.

If you are wanting to contract you should already have a healthy warchest saved up before you leave, I don't know why you are asking about JSA as you should not be going down this route if you are leaving voluntarily. Also, if you are in IT then watch out for IR35.

McKneff

MonkeySaving? wrote: »

Some crap advice in this thread, OP download the guide from the PCG and read it thoroughly as it tells you all you need to know.
http://www.pcg.org.uk/cms/index.php?option=com_content&view=article&id=6343:pcgs-complete-guide-to-freelancing-new&catid=806:going-freelance&Itemid=1316

As a contractor you are effectively self employed unless you go through an Umbrella company, HMRC has no say in it, you either declare yourself self employed or you don't. As for house buying, forget it if you decide to contract, at least for the first 3 years.

If you are wanting to contract you should already have a healthy warchest saved up before you leave, I don't know why you are asking about JSA as you should not be going down this route if you are leaving voluntarily. Also, if you are in IT then watch out for IR35.

So where is the crap advice, manners cost nothing.
There really is no need to be rude. People are trying to help the OP and are insulted. Grow up.

You are wrong. An employee cannot just decide to go self employed, they have to fit certain criteria
which is on the HMRC website.

Notmyrealname

MonkeySaving? wrote: »

Some crap advice in this thread, .

Where would that be? Oh, you because you think that IR35 only applies to IT contracting.

MonkeySaving?

Notmyrealname wrote: »

Where would that be? Oh, you because you think that IR35 only applies to IT contracting.

No I don't think that at all, I highlighted the industry sector where you are most at risk....

MonkeySaving?

McKneff wrote: »

So where is the crap advice, manners cost nothing.
There really is no need to be rude. People are trying to help the OP and are insulted. Grow up.

You are wrong. An employee cannot just decide to go self employed, they have to fit certain criteria
which is on the HMRC website.

I doubt i'm wrong, I was an employee, left and then went self employed. It was as simple as telling HMRC that I was self employed. Just like the OP.

KiKi

MonkeySaving? wrote: »

I doubt i'm wrong, I was an employee, left and then went self employed. It was as simple as telling HMRC that I was self employed. Just like the OP.

You are wrong, I'm afraid.

Yes, you can go self employed, but when you are looking for jobs, there are specific criteria that determine whether or not a position is employed or self employed. It's not up to you or the company to decide (although in practice that often happens - until HMRC land on you).

I still don't see why you're claiming the advice is crap on this thread - it's accurate.

OP: as a contractor you *are* self employed. There is no difference, except that as a contractor you tend to work on fixed contracts for a period of time rather than having many clients and / or running your own business.

Have a look at the Businesslink website which has everything you need to know about setting up as a self-employed person

KiKi

McKneff

KiKi wrote: »

You are wrong, I'm afraid.

Yes, you can go self employed, but when you are looking for jobs, there are specific criteria that determine whether or not a position is employed or self employed. It's not up to you or the company to decide (although in practice that often happens - until HMRC land on you).

I still don't see why you're claiming the advice is crap on this thread - it's accurate.

OP: as a contractor you *are* self employed. There is no difference, except that as a contractor you tend to work on fixed contracts for a period of time rather than having many clients and / or running your own business.

Have a look at the Businesslink website which has everything you need to know about setting up as a self-employed person

KiKi

:T:T:T

Excellent well balance post.............

I'm just a pleb, but this is what I meant,

MonkeySaving?

Right, let me spell this out so it makes sense.

1. I hand in my notice and leave my job
2. I register as self employed and start working for myself

So you are telling me that I've done this wrong when my £100 a month accountant (specializing in contracting) says I'm doing it right?