Tax situation with occasional work

sparksfly

Hello all,

I retired at 60 with a private pension of about £12000. I don't yet get a State pension.

I would like to do some occasional work (programming) for different companies who will no doubt want to pay me by cheque and also claim for my costs on their accounts.


I only want to do the odd spell of work and don't really want the hassle of registering as self employed and have to submit accounts etc. to HMRC.

I only expect to do about 4/5 jobs a year for a total of about £1500.

Is there a simple way I can legally pay my tax without the hassle?

A friend told me that there are companies that will accept payments from your customers, 'employ' you and pay your PAYE tax after they have taken their commission. Has anyone heard of this sort of scheme and is it a worthwhile option?


Thanks

Stef

xylophone

http://www.hmrc.gov.uk/working/intro/casual.htm
Google umbrella company?
http://en.wikipedia.org/wiki/Umbrella_company

agrinnall

How long have you been retired? I am slightly surprised that someone who intends to do programming work, and therefore presumably has some experience in the IT industry, hasn't heard of umbrella companies, probably the most common method of payment to contractors since the introduction of IR35 in 2000.

Although using an umbrella company is the easy option you might find that you'll end up with more money going the self employed route (assuming the people paying you allow that, which they might for small contracts). Yes, it's a bit more hassle, and takes a bit of time, but you're retired so do you not have the time available to you?

beartsarah

Just a general note, Umbrella companies are now very common, however you will 99% of the time end up with less money and the IR35 rules are becoming much much stricter to try and control service companies. However IR35 DOES NOT APPLY TO YOU. IR35 applies most commonly to a limited company being used as a tax front by 1 director, 1 shareholder. Umbrella companies actually get out of this legislation because they are not an intermediary they are an agency and pay you as an employee, umbrella companies that pay you as a contractor are acting as a subcontract payroll agency and are classed as an outsourced accounting function of their clients.

As an accountant my advice would be register self employed with HMRC. Based on your expected income you would only need to complete a self employment (short) section giving your income and any expenses you want to reclaim. You won't need to have a set of accounts done to submit alongside it or to work out the figures - it's going to be very straight forward.

If you want any advice on how to do this let me know and I'll point you in the right direction.