Employment vs Self employed! Please advise!

angelcake

My boyfriend is employed direct from a company, the wages are poor, especially compared to what he was promised, they aren't paying his overtime and every month he is getting less and less!! Now obviously the option is to look for another job! nowadays that seems like needle in a haystack .. he is in skilled work, has been doing the work for 9 years, he is very good at it! He is wondering about going self employed. To me its very scary, we have 3 children together and it just seems the wrong option with regards to job security.

Another employee at the same company handed in his resignation, he was offered to work self employed for the company for more money!! Quite a lot more, my boyfriend is a better surveyor then him, has more experience etc... He is wondering whether it would be the better way for him, we have no knowledge or know where to start with the pros/cons of him doing this! Obviously we have no promise they would do this for him either, we need to look into it before he suggests it to the company! where do we start!? what would you do?

angelcake

Why would having someone self employed be more appealing to a company?

princessdon

It's a personal choice - you can still claim Tax Credits etc via Self Employment so it's a case of weighing up your personal options.

You don't say if you work, if not then perhaps look at a part time job to have some regular money whilst he builds up his business?

Notmyrealname

angelcake wrote: »

Why would having someone self employed be more appealing to a company?

No employers NI to pay.
No holiday pay to pay.
The worker has absolutely no rights under employment laws.
When there's no work the company doesn't need to have them in.

InsideInsurance

Many would argue that there is no such thing as job security these days and as soon as he leaves then as a new employee at the next place they can dismiss him without reason in the first 12 month (or 2 years if the changes have been made yet - dont think they have).

You certainly need to ensure that if you do go down the contractor route that you are getting an appropriate rate. You need to factor in no holiday pay, no sick pay, no employee right, no pension, no insurances, no healthcare, no bonus or any other employee perk.

The two traditional methods of doing rate is taking your annual salary and divide by 1,000 for your hourly rate or divide it by 100 for your day rate. So if you earned £30,000 you'd look at a rate between £30/hr and £300/day. Whilst some are achieving this (IT, Projects, BAs etc) I hear others are struggling more on their rates at the moment.

I hate the term "self employed" because it doesnt really mean much legally and you therefore end up in debates. There are normally three routes for freelancers/ contractors - sole trader, ltd company or umbrella company.

Just because your contract says you are "self employed" doesn't mean HMRC agrees with this. If they feel you are a masked employee then they are able to impose taxes as if you were an employee instead. Due to this being worst for the client/"employer" many large companies wont take sole traders. For Ltd companies a piece of tax legislation called IR35 comes into play and for those using an umbrella company it is a none issue as you legally are an employee of the umbrella and so are fully taxed and the umbrella pays the employers NI out of the fees you charge.

One big no no generally is to go back to your ex employer as a contractor. It is considered a red rag to HMRC for them to investigate you and judge your working relationship.

I didnt/ dont have kids and so had less to risk but I certainly gave up the relative securities of perm work for the income of contracting and, touch wood, todate havent regretted it at all. It does however take a certain personality type and you need to adjust to the different politics when you arent an employee - there will never be promotions for you, you will get the least sexy work to do, some of your employee colleagues will see you as a second class citizen, you are expected to add value very quickly but you will earn enough to have big money fights on the bed (if the mood takes you )

quatrofromageo

Hi Angel,

I'm currently employed, sole trading on the side and looking to make the jump to being a full-time self employed freelancer.

The extra money you earn as a freelancer/contractor is totally worth losing the holiday benefits and sick pay. :money:

At my daily rate I could work 8 days a month for the full time salary I'm currently on, which really puts it into perspective.

Also, one of the big accountancy groups has put out some survey results today about contractor happiness, this should help to answer a lot of your concerns:

http://www.sjdaccountancy.com/news/contractor_attitude_survey_results.html

Hope this helps

McKneff

With 3 kids, I think I would be thinking about the security of normal employment to be honest and cut your cloth ie living expenses accordingly.

Even if they said they would use his services, 2 months down the line they can just as easily say 'we have no use of your services any more'

6 months down the line, you could be on here saying 'my OH has no work, we have used up all our savings, what benefits am I entitled to?

Later on in your life, yes, but not with 3 little 'uns.
But good luck in what ever he decides.

anamenottaken

angelcake wrote: »

My boyfriend is employed direct from a company, the wages are poor, especially compared to what he was promised, they aren't paying his overtime and every month he is getting less and less!! Now obviously the option is to look for another job! nowadays that seems like needle in a haystack .. he is in skilled work, has been doing the work for 9 years, he is very good at it! He is wondering about going self employed. To me its very scary, we have 3 children together and it just seems the wrong option with regards to job security.

Another employee at the same company handed in his resignation, he was offered to work self employed for the company for more money!! Quite a lot more, my boyfriend is a better surveyor then him, has more experience etc... He is wondering whether it would be the better way for him, we have no knowledge or know where to start with the pros/cons of him doing this! Obviously we have no promise they would do this for him either, we need to look into it before he suggests it to the company! where do we start!? what would you do?

Is he a qualified surveyor (member of a professional institute)? If he would be offering a professional service, he would also need to have PI insurance too.

mildred1978

anamenottaken wrote: »

Is he a qualified surveyor (member of a professional institute)? If he would be offering a professional service, he would also need to have PI insurance too.

PI costs us (2 of us and 1 who could potentially cost companies millions if he fcuked up) £33 per month. Not extortionate when you're charging £6-800 a day, pretty steep if you're charging £1-150 per day.

Savvy_Sue

InsideInsurance wrote: »

Many would argue that there is no such thing as job security these days and as soon as he leaves then as a new employee at the next place they can dismiss him without reason in the first 12 month (or 2 years if the changes have been made yet - dont think they have).

Yes, the changes have been made, from April this year, but not made retrospective.

So the OP's OH has more protection atm than they would for the first TWO years if they changed employers.

And anyone who started work for a new employer after April this year has very little protection until they've been there for two years.