Second job - how do I pay tax and make things legal?

Conor_3

Becles wrote: »

That's a pretty vague list. For my self employment, I tick more boxes in the employed list, yet I've been specifically told I'm self employed by the companies I work for.

And you believe them?

Of course they're gonna say you're SE. They save 20% on your wages and get away with not having to worry about a whole raft of employment legislation such as maternity pay, sick pay etc etc etc.

One friend on MSN had a missus who worked for a firm who told her she was SE. When finally pushed enough, they admitted that she should actually be on PAYE. They weren't a small company either.

Becles

What is your problem?

Of course I believe them. Of the many tax returns I've completed over the years, nothing has ever been queried.

But then if some woman on MSN says otherwise....:rolleyes:

cash99

Becles wrote: »

What is your problem?

Of course I believe them. Of the many tax returns I've completed over the years, nothing has ever been queried.

But then if some woman on MSN says otherwise....:rolleyes:

Nor would your tax returns be queried as you are declaring the income, and there is no comeback on you for any tax.

The only thing you lose out on is employment rights.

Your "employers" may get a shock during a a PAYE audit, at which point the amounts paid to you will be grossed up and they will be asked to pay the PAYE and NIC. About 70% of the amount paid for a basic rate taxpayer and about 90% of the amount paid to a higher rate tax payer.

This list you referred to as pretty vague is a summary of the years of case law on the subject and this is the only basis on which these issues are decided, not whether you issue an invoice or not.

Becles

14 companies all paying me wrongly? I don't think so.

Here's an extract of one of the contracts I work with:

1. You understand that your acceptance of an Assignment and/or your acceptance of these Terms and Conditions do not form a contract of employment between yourself and (company). You acknowledge and agree that you will carry out the Assignment in the capacity of an independent contractor and that you are free to provide your services to other companies at any time.

3. (company) will not make any deductions from the Fees for tax or National Insurance contributions and you agree that you are responsible for all tax and National Insurance contributions which are payable in respect of the Fee.

It quite clearly states I'm self employed and responsible for paying my own NI and tax.

Anyway, why I have to justify my employment to random people on the internet when the thread isn't even about me is quite bizarre.

the_barretts

Thanks for all your postings Becles - HMRC says I would be self employed as the company I am doing the work for does not put me through their payroll system (I am an outside contractor!) so they dont take off NI or tax.

They have given me various numbers to ring to register and to get help with what I need to do.

Basically as my earnings will be approx £1000 a year (if I have the work for that long) but there is no NI to pay - would have been £2.20 a week but I can claim to be exempt because of the low earnings.

I just have to keep records of income and expenditure and there is a Business Support Team which do seminars about keeping records for yearly tax claims.

I can register by phone and use the website for forms and help so it looks like this is what I will be doing.

Becles - thank you for all the info and postings, you were spot on and it made things a lot clearer for me when I spoke to HMRC.

Becles

Glad you got everything sorted out.

I would do the tax return online. I've used both the paper and the online system, and the online one is so much easier.

Conor_3

Becles wrote: »

14 companies all paying me wrongly? I don't think so.

Here's an extract of one of the contracts I work with:



It quite clearly states I'm self employed and responsible for paying my own NI and tax.

And again, it doesn't make it legal. Just ask anyone who worked as an IT contractor and got hit by IR35.

Conor_3

Becles wrote: »

Glad you got everything sorted out.

I would do the tax return online. I've used both the paper and the online system, and the online one is so much easier.

They now do a shorter basic SE returns form for those earning under £15k. It's literally a couple of sides of A4.

Becles

Conor wrote: »

And again, it doesn't make it legal.

Ok.

I think I'd rather trust the professional advice I've been given though, rather than some comments from a random internet person who knows nothing of my circumstances other than the brief information I posted here.

cash99

Beccles

In your situation if you have 14 concurrent clients then self-employment looks likely, and as you say it is hard to judge based on the limited information you have posted.

BUT it is not correct for you to say that just because a company says you are self employed and because you invoice them you are self employed. Self employment status is decided based on the list of factors posted by Connor.

While you are not prepared to heed any advice from random people on the internet you are prepared to dish out incorrect advice to others. Some of the random people are actually professionals in the field with direct experience of these issues.

HMRC will take the view that if you register as self employed they will accept the tax and NIC you pay them. It is a very different story when they conduct PAYE audits however, and the fact that the employee has paid tax does not stop the company having to pay it all over again.

As I said in my original post this has no impact on the employee except for the loss of employment rights.

It will also have no effect on the OP if they register as self-employed, regardless of the fact that the job they are doing looks like employment. What the OP loses are employment rights, including holiday pay, and rights to certain benefits etc.