Offered a job - Should I go on the Payroll or get paid by invoice

icebergx

Hi all,

I have a slightly strange scenario.
I have been offered a job by a foreign company to carry out a project in Denmark.

In terms of remuneration, I have been offered two options:
1) Get paid by monthly invoice
2) Go onto the payroll

I will be working from home, and using all the associated utilities, services (Internet etc.) and will use one of the rooms as an office.

Can someone outline the pros and cons of either option and, if there are other considerations I should bare in mind.

Thanks.

HappyMJ

I would opt for monthly invoice any day. More admin involved but the savings on tax are immense. You could claim all your income as expenses and have no tax to pay.

Payroll is easy but they will tax you on all your income.

icebergx

HappyMJ wrote: »

I would opt for monthly invoice any day. More admin involved but the savings on tax are immense. You could claim all your income as expenses and have no tax to pay.

Payroll is easy but they will tax you on all your income.

I was edging towards this option, but I presume that I'd need to be able to prove that my expenses are legitimate business expenses? For example, I presume I could claim the rent of the office space as a business expense, but not the rent of my whole home?

Premier_2

https://forums.moneysavingexpert.com/discussion/3023780

SteProud

icebergx wrote: »

I was edging towards this option, but I presume that I'd need to be able to prove that my expenses are legitimate business expenses? For example, I presume I could claim the rent of the office space as a business expense, but not the rent of my whole home?

The expenses you can claim for have to have been incurred wholly and exclusively as a result of you going about your business.

When you say paid via invoice do you have a specific trading model in mind? i.e. setting up your own limited company, working via an umbrella etc?

You might need to think about insurance as well.

icebergx

SteProud wrote: »

The expenses you can claim for have to have been incurred wholly and exclusively as a result of you going about your business.

When you say paid via invoice do you have a specific trading model in mind? i.e. setting up your own limited company, working via an umbrella etc?

You might need to think about insurance as well.

I was thing about starting off as a sole trader and seeing how it went. Not really a concrete plan but it seems like a logical way to do things.

SteProud

icebergx wrote: »

I was thing about starting off as a sole trader and seeing how it went. Not really a concrete plan but it seems like a logical way to do things.

Makes sense but just double check a few things.

Is there an agency involved? Sometimes, due to transfer of liability issues, some agencies and compnaies won't work with sole traders as they don't always have enough insurance cover.

IT contractors, for example, have their own limited company and will have public and professional liability cover. So if anything goes wrong they and the client are covered. If they work via an umbrella company then the umbrella companies insurance policy will cover them.

Sole traders can make them nervous but it all depends on the type of work you are doing. Worth asking the question though.

Mistral001

HappyMJ wrote: »

I would opt for monthly invoice any day. More admin involved but the savings on tax are immense. You could claim all your income as expenses and have no tax to pay.

Payroll is easy but they will tax you on all your income.

I think this poster is winding us up. What he/she is suggesting is called tax evasion and you can go to prison for that.

Horace

Another thing to consider is whether or not you will be able to work for other people or not? If not then you would be classed as an employee - if you are free to work on other projects for other companies then you could be a sole trader and invoice each month accordingly.

You can still have public liability and professional indemnity insurance as a sole trader.

icebergx

Horace wrote: »

Another thing to consider is whether or not you will be able to work for other people or not? If not then you would be classed as an employee - if you are free to work on other projects for other companies then you could be a sole trader and invoice each month accordingly.

You can still have public liability and professional indemnity insurance as a sole trader.

If I'm classed as an employee (ie. working exclusively for one company) how would that effect things?

The plan is, I've got guaranteed full time work for 8 months, but after that, nothing is confirmed.

steve1980

icebergx wrote: »

If I'm classed as an employee (ie. working exclusively for one company) how would that effect things?

The plan is, I've got guaranteed full time work for 8 months, but after that, nothing is confirmed.

Within the 8 months are you allowed to work for someone else alongside the current work?

If not then you're employed.