Self Employment

sabelu

So my employer currently contracts me at a cost net of paid Holiday and Public Holidays of £154 per day. Obviously with pension contribution 6% and company NI it costs more than that I estimate around £185 per day, would that be accurate?
There is not enough to keep me employed for 40hrs per week as the business has massive volume spikes and troughs. I have around 4yrs to retirement and the business may well outsource my part of the operation in the next 12 months. My redundancy will be negligible due to service.
I am therefore looking now to suggest to my employer they may wish to dispense with my contract and say employ me on a daily rate, say £200. I think on 35k per year thay would save around 7k on employment costs pension etc minimum. Would that be realistic?
What would be my costs assuming I grossed £35k for 175 days contract work billing the client for £35k per annum? What could I claim as tax deductible expense?

InsideInsurance

You cannot simply decide to become self employed and continue to work in your old job. If HMRC spotted it then they'd most likely deem you are still an employee and continue to charge your employer Employers NI etc.

PlutoinCapricorn

As above, and if you decided to do it via a limited company there is the IR35 legislation to think about. HMRC look for 'self employed' people who are primarily trying to cut down tax and are employees in all but name.

Pennywise

sabelu wrote: »

What could I claim as tax deductible expense?

You tell us? What exactly are your "wholly and exclusively" business related costs.

For most small businesses, it would include things like indemnity insurance, purchases of business equipment, travel between different client sites, business related phone calls. You're basically looking at most of the extra costs you would incur because you were in business. Any expenses you already pay are personal and cannot be claimed, simply because you already pay them, so being in business costs you no more - but you can normally claim most extra costs because of the business.