Self Employed Cleaner tax advice please

eddiesaint76

Good evening, My partner will soon start working as a cleaner for her friend who owns her own cleaning business. She has been told that she will be classed as self-employed and will have to collect any receipts from buying cleaning products, uniform and petrol usage. We think that she will only earn roughly a maximum of £4000 to £5000 maximum a year. Any hours that my partner works each month will be invoiced to her boss who in turn will pay her what she has earned that month.

Even though we know that she will be earning less than the Income Tax Personal Allowance, is it advisable to keep all her receipts and even pay an accountant to oversee what she has spent or is it a simple thing to do ourselves?

Has any one else had a similar experience working as a self employed worker within a company?

Please forgive our lack of understanding regarding this matter as my partner and myself have always been employed by large companies, so we have never had to deal with our own taxes.

Many thanks for any advice given.

CIS

The decision on the self employment has to meet certain criteria otherwise it will be classed as employment - the decision is not down to what the friend decides.

HMRC have info here - http://www.hmrc.gov.uk/employment-status/index.htm#1

Slinky

From what the OP has described, this doesn't look like self employment to me, just a way for the friend to avoid paying tax, NI, holiday etc.

Proceed with extreme caution.

Lovelyjoolz

Sadly, this is happening more and more lately. The method is used by the PPI claims industry - even those working for large financial institutions such Lloyds TSB. They tell you that you are self-employed and must set up your own company to invoice them through. OR, they suggest you use a payroll company to run your pay for you, deduct NI & PAYE and charge you £25 a week for doing so. And the payroll company is actually owned by them too. It's shocking.

OP, take note of what Slinky said - it smacks of your partner's friend wanting to avoid registering as an employer and avoid paying Employer's NI.

Follow the link given and go through the ESI checker - that will tell you whether the HMRC would consider your partner an employee or not. If it does, then avoid.

Then again, if your partner has to become self-employed anyway, what is to stop her doing so, contacting her friends clients directly and undercutting her prices? Might mean the end of the friendship, but frankly, if she's playing that game, then she should expect it!

SteProud

You should always keep hold of any reciepts you have used to claim an expense even if you are working via a payroll company.

Just because they don't need to see them does not mean the HMRC can't ask for them.

OP - it sounds like a fairly simple business model so you might be able to do your accounts yourself with some decent software and a bit of attention to detail.

Alternatively, there are online accountants out there that will do all of this for you, set up as a business etc, all for a small monthly fee and for sole traders it can be as little as £80 a month.

antrobus

SteProud wrote: »

...
Alternatively, there are online accountants out there that will do all of this for you, set up as a business etc, all for a small monthly fee and for sole traders it can be as little as £80 a month.

£80 a month! That's £960 a year. The OP is only looking at earning "roughly a maximum of £4000 to £5000 maximum". There are offline accountants who would do it all for a lot less than that.

Slinky wrote: »

From what the OP has described, this doesn't look like self employment to me, just a way for the friend to avoid paying tax, NI, holiday etc.

I would suspect that avoidance of the NMW might be a big part of the etc.

Slinky wrote: »

Proceed with extreme caution.

Agreed. I would suggest that the OP have a good think about what hourly rate this cleaning work is going to generate net of expenses.

As far as self employment is concerned the one thing you would have to do is register with HMRC as self employed. HMRC will then expect payment of flat rate NIC; you may then choose to apply for an exemption on the grounds that the profits will be less than £5315.

Lovelyjoolz

antrobus wrote: »

£80 a month! That's £960 a year. The OP is only looking at earning "roughly a maximum of £4000 to £5000 maximum". There are offline accountants who would do it all for a lot less than that.

Agreed. It would be an extremely easy process. A decent accountant wouldn't charge more than £100 - £200 per year to sort out the books for you.