just gone self employed - advice

benjwalsh

IM 20 Years Old, Just Landed A Part Time Job Around University, Trouble Is Im Classed As Self Employed. I Have No Idea How It Works, What I need To Do Etc.

Any Help Would Be Greatly Appreciated

Treading_Water

Hi Ben
You should contact Inland Revenue immediately to inform them that you will be self employed and arrange to pay your £2.20 per week class 1 National insurance contributions. If you are not going to be earning more than £4635 you can apply for a small earnings exemption from this. You then need to keep records of all Income and corresponding expenses until you are required to fill out a Self assessment return - you will usually get sent this in early April. It is quite straightforward and you can complete the return online - although if you have any difficulty with this you may benefit from using an accountant (look for one that is registered with an approved body, such as ACCA, Cima, AAT) - alternatively people on here will be able to provide you with good advise when the time comes.
Remember that after you have earned over your personal allowance of £5225 up to 05 April 2008, you will be liable for Income tax at approximately 22% and class 4 NIs of 8% for earnings over £5225 and up to £34840 and 1% thereover. Hope this is useful.

Timmne

Hi Ben

Out of interest, what is it that you're doing as a job? Reason I ask is that you call it a part time job and "classed as self employed" is also mentioned, which is making me wonder whether you'll actually be employed by definition but the employer wants to pay you without the hassle of enrolling another employee....

More info would be great, then we can point you in more right directions!

benjwalsh

my job is a lighting technician in a nightclub, its part time because its actually only work 24 hours a week, however they do pay me in the normal way and i am on the books.

Regarding this national insurance payment, whats the options, what i mean is can i setup a direct debit etc etc cheers

ive only been doing this job 2 weeks but im getting in the routine of putting away 20% of what i earn every week. My weekly Pay is £240 on average so as you can see im well over the £5225, any recommendations on a system i can use so i dont get stung when the tax bill comes in.

Timmne

Yes, you can set up a DD - not sure if you can do this weekly, most people do it on a four & five weekly basis.

Some notes from HMRC website:

As a general guide as to whether a worker is an employee or self-employed; if the answer is 'Yes' to all of the following questions, then the worker is probably an employee:

• Do they have to do the work themselves?
• Can someone tell them at any time what to do, where to carry out the work or when and how to do it?
• Can they work a set amount of hours?
• Can someone move them from task to task?
• Are they paid by the hour, week, or month?
• Can they get overtime pay or bonus payment?
  
  If the answer is 'Yes' to all of the following questions, it will usually mean that the worker is self-employed:
• Can they hire someone to do the work or engage helpers at their own expense?
• Do they risk their own money?
• Do they provide the main items of equipment they need to do their job, not just the small tools that many employees provide for themselves?
• Do they agree to do a job for a fixed price regardless of how long the job may take?
• Can they decide what work to do, how and when to do the work and where to provide the services?
• Do they regularly work for a number of different people?
• Do they have to correct unsatisfactory work in their own time and at their own expense?

I only mention this so much because it's something HMRC are cracking down on at the moment, as the employer is simply avoiding the admin and the employer's National Insurance.

I would ensure that you keep some good accounting records and potentially an accountant, although it sounds like you'll be fine on your own as your business doesn't sound too onerous on the admin front.

Look into an accountancy system - the one we run courses on is QuickBooks - they do a basic version called simplestart; you can find this on www.intuit.co.uk.

It's worth shelling out for this type of thing as soon as you can afford it as you'll be grateful in the long run when you've been saved from paying an accountant >£500 to catch up and sort out any mess for you at the year end!

swanny65

benjwalsh wrote: »

my job is a lighting technician in a nightclub, its part time because its actually only work 24 hours a week, however they do pay me in the normal way and i am on the books.

Regarding this national insurance payment, whats the options, what i mean is can i setup a direct debit etc etc cheers

ive only been doing this job 2 weeks but im getting in the routine of putting away 20% of what i earn every week. My weekly Pay is £240 on average so as you can see im well over the £5225, any recommendations on a system i can use so i dont get stung when the tax bill comes in.

Lighting Technician in a nightclub..... my hunch is you are an employee and the employer is trying to avoid paying employers NI etc. Up to you what you do about it. Ask yourself these questions. Do you supply the lights, do you supply the materials to fix any faults, do you do this work for more than one employer, how is your contact any different to say the barstaff at the club? I would be very surprised if HMRC classified you as self employed if all your work is for the one nightclub.

odls

From my own personal experiences with the Tax people, and from I`ve heard from others who have started up on their own, the Tax Office is very helpful in providing guidance. They want to help you to get things right so that it avoids any future problems.

From what you`ve written though I have to agree with the others, it looks as though you are actually being employed.