Becoming Self Employed?

RayWolfe

I wonder if you should have?
There is a lot to learn and you need to make a start ... or perhaps appoint some professional advice,

Becks_in_Debt

I have been saving petrol receipts but other than that nothing, i really dont know what i can claim back on. Does any body know if i can claim back VAT on my Daughters Nursery fee's??? kind of work related, and that would help out a great deal. How do you find out what you can claim on, is that why people get accountants, because i was going to try and do it my self the first year and see how i get on with it? surely cant be too hard to do, if you are organised and know what you can claim and keep a record of your earnings. or am i just being nieve?

EagerLearner

Becks in Debt - accountant will do your tax return for about £150 a year I think, prob worth it as then you can just pass them the receipts and they decide... I am now self-employed and won't use one simply because I have very few items to put through - only things like phone bill portion, council tax portion, electricity portion etc as I work from home or at client premises.

What about calling IR and asking their advice? Might as well use 'em and they are friendly.

Becks_in_Debt

it is a strange 1, i am a admin manager and every1 else at the company is self employed as it is the industry that i am in so it was easier for them to do me as self employed as well, works out better for me i suppose. So dont know if a can really claim things like that or could i pretand? would really come in use to help pay off all the debt that i have?

EagerLearner

Becks_in_Debt wrote:

it is a strange 1, i am a admin manager and every1 else at the company is self employed as it is the industry that i am in so it was easier for them to do me as self employed as well, works out better for me i suppose. So dont know if a can really claim things like that or could i pretand? would really come in use to help pay off all the debt that i have?

You can call the IR and ask now for free, or, hire an accountant to do your tax return and pass them your receipts so they can decide.

Becks_in_Debt

Thank you EagerLearner, sorry i havent responded sooner, since all this upgrading has been done i havent been informed when new posts have been posted to my subscribed threads, just looked now on a off chance

craigio

http://www.giantgroup.co.uk/press/2006december.asp

I am now left with a choice to do standard PAYE or to run under my own company, what route have people taken?

I am considering to run under my own company, as apparently there is a saving of taking dividends instead of PAYE. Has anyone got bitten by doing this?

Interested in feedback

dunstonh

Another consideration is that self employed individuals do not get the second state pension. Only the basic state pension. So, an employed individual could be looking at state pensions worth £9300 a year but a self employed individual is looking at a state pension worth £4381 a year.

So, if you are self employed, you have to take greater responsibility for your own retirement planning. That difference in state pensions is worth around £100,000 in pension fund value. So, that is what you need to have put aside just to match the benefits (in todays terms).

JoeK_3

There are many implications to either being employed or self employed and it is far greater than taxation alone.

Let's look at some advantages and disadvantages of each.

Employee: Advantages
P.a.y.e system - tax and nic paid
Vat system - paid by the employer
Redundancy payment - Paid either by the employer or the goverment
State Secondary Pension Scheme
No marketing and sales responsibilities

Employee: Disadvantages
P.a.y.e system - could be paying more in tax and nic?
Have a boss?

Self Employed: Advantages
Taxation - Could be better off?
No boss - other than her indoors?

Self Employed: Disadvantages
Inland Revenue - IR 35 problems
Taxation - Preperation of Accounts each year
V.A.T - Registration and work load each quarter
Marketing and Sales worries and responsibilities
No State Secondary Pension Scheme (S2P)

I'm sure that there are other things that I have not summarised in this list.

The choice to go self employed should not be made on taxation alone.

JoeK

morgani

Becks_in_Debt wrote: »

I have been saving petrol receipts but other than that nothing, i really dont know what i can claim back on. Does any body know if i can claim back VAT on my Daughters Nursery fee's??? kind of work related, and that would help out a great deal. How do you find out what you can claim on, is that why people get accountants, because i was going to try and do it my self the first year and see how i get on with it? surely cant be too hard to do, if you are organised and know what you can claim and keep a record of your earnings. or am i just being nieve?

Yes you can do Self Assesment Tax returns yourself but accounants have more knowledge on what you can claim back based on your business and earnings.

Also as the fees for the accountant are a business expense you then claim these back effectively too so its not as expensive as it can seem.

Nursery fees are a personal expense not a business expense so the simple answer is no