Self employed?

mournemaid

Hello All, this is a query about my son.Son has been on job seekers since he lost his job a year+ ago. He has been offered a job which will last 3 months with a chance of longer but he has to go self employed with this job. He would really want to go to this job as he hates this job searching and having no money. If he goes self employed and the job only lasts 3 months will he be able to claim any benefits? Sorry but we know nothing about things like this or about self employed and what it entails.Thank you

McKneff

What is the job he has been offered. It is up to HMRC wheter a job is deemed self employment or not.

Sometimes these companies exploit youngsters and it annoys me so much, they do this to get out of paying ni, holidays, insurance etc.

HappyMJ

mournemaid wrote: »

Hello All, this is a query about my son.Son has been on job seekers since he lost his job a year+ ago. He has been offered a job which will last 3 months with a chance of longer but he has to go self employed with this job. He would really want to go to this job as he hates this job searching and having no money. If he goes self employed and the job only lasts 3 months will he be able to claim any benefits? Sorry but we know nothing about things like this or about self employed and what it entails.Thank you

Do not accept the job if it pays less than £7.50 an hour. That will equate to minimum wages after expenses and allowances for holiday pay.

If he's self employed that means he is charge of his own work. He is responsible for choosing the hours he works and whether or not he gets someone else to do the work for him on occasion such as when he is sick or on holiday. He would also need to use his own tools and equipment to do the work and have the correct insurance to cover loss and damage to those items and he also needs third party public liability insurance to cover damage caused to others. If he uses a vehicle to get to the clients premises that vehicle must have business coverage on the insurance. He can claim the mileage at 45p a mile for up to 2 years to the clients main site and indefinitely to other sites.

He would need to register as self employed with the HMRC and keep a good record of invoices he issues to the client and any expenses he incurs in carrying out the work for the client.

If he's over 25 he can claim working tax credits.

Personally I would never take another PAYE job ever again and have only ever worked for clients on a self employed basis for the last 10 years. It isn't that hard filling out tax returns each year.

He MUST save a third of his gross income (in excess of £156 a week which is tax free) to be able to pay taxes to the HMRC when they fall due.

McKneff

HMJ, brilliant post.............

mournemaid

Thanks for replies. The job is a painting job @ £7.00ph to get to job he would have to car share and that will £20.00pw. Oh he is 24 he had a permenant job from the day he left school until 2000 but since has had 3/4 short lived jobs,as i say he really wants to work.

HappyMJ

mournemaid wrote: »

Thanks for replies. The job is a painting job @ £7.00ph to get to job he would have to car share and that will £20.00pw. Oh he is 24 he had a permenant job from the day he left school until 2000 but since has had 3/4 short lived jobs,as i say he really wants to work.

Forget it....

He should pay himself £6.08 an hour. Then set aside and extra 12.07% of his gross pay to be able to pay himself 5.6 weeks annual leave (28 days). An extra £0.74 per hour. He also needs to set aside another 9% on the excess over £146 per week to cover Class 4 national insurance. That's another £0.55 per hour. Add all the elements together and the minimum he should ask for is £7.37 an hour just to get minimum wage and that's not even counting the £20 he has to pay for the car share which should be added on top at £0.58 per hour to total £7.95 per hour.

Russe11

HappyMJ wrote: »

Forget it....

He should pay himself £6.08 an hour. Then set aside and extra 12.07% of his gross pay to be able to pay himself 5.6 weeks annual leave (28 days). An extra £0.74 per hour. He also needs to set aside another 9% on the excess over £146 per week to cover Class 4 national insurance. That's another £0.55 per hour. Add all the elements together and the minimum he should ask for is £7.37 an hour just to get minimum wage and that's not even counting the £20 he has to pay for the car share which should be added on top at £0.58 per hour to total £7.95 per hour.

I though the NI was now 11%, no mention of equipment or tools.

Question is will they get a receipt for the £20 travel charge a week to offset, or will it have to be calcualted this after tax? then thats more than 58p a hour?

If its a skilled decorater/painter job and it truely is selfemployed then is should be more than £10 a hour i'd of thought. For a trade day rate i'm not sure theres many that would be happy on less than £120 a day(anyone know different?) thats covering travel time and expense, tools and equipment could be a 10 hour day.

My honest opinion is the person offering this job is offering 7p/h as they are charging the going rate and are trying to cut off the top, they are putting it like this but for are just expecting them to take is cash in hand.

Though we have to remember there is not legal requirement for a self employed person to earn the min wage for hours they work(have had HMRC try say different when it comes to tax credit claims though).

Russe11

Oh and class 2 contributions of £2.65 a week unless gets a low earning exemption.

HappyMJ

Russe11 wrote: »

I though the NI was now 11%, no mention of equipment or tools.

Question is will they get a receipt for the £20 travel charge a week to offset, or will it have to be calcualted this after tax? then thats more than 58p a hour?

If its a skilled decorater/painter job and it truely is selfemployed then is should be more than £10 a hour i'd of thought. For a trade day rate i'm not sure theres many that would be happy on less than £120 a day(anyone know different?) thats covering travel time and expense, tools and equipment could be a 10 hour day.

My honest opinion is the person offering this job is offering 7p/h as they are charging the going rate and are trying to cut off the top, they are putting it like this but for are just expecting them to take is cash in hand.

Though we have to remember there is not legal requirement for a self employed person to earn the min wage for hours they work(have had HMRC try say different when it comes to tax credit claims though).

12% for employees and 9% for self employed profits over £146 a week. http://www.hmrc.gov.uk/rates/nic.htm

I agree I think it'll just be £50 a day cash in hand. The recipient would then be responsible for declaring it to HMRC and paying tax and NI on it.

There is no legal requirement to earn NMW but you should at least charge the client enough so that it is at least possible to earn NMW without too many deductions and allowances.

Russe11

Not a clue where I got the 11% from then...

The amount of Class 4 National Insurance contributions you have to pay for any tax year is based on your profits for that year. You pay 9 per cent on annual profits between £7,605 and £42,475 (2012-13) and 2 per cent on any profit over that amount.