Do we put self-employed or employed on new credit card application?

dorcas.w

Hello All - looking for some advice. We need to apply for a credit card to use abroad (we don't really use them in UK though we have a couple with big foreign transaction fees). My husband is Self-employed for tax purposes (in terms of HMRC) but he gets a guaranteed 35 weeks pay a year and also gets a P60 and pays class 1 N.Ins.. This usually totally confuses everyone including accountants and tax credits people!
On a new credit card application should we put him down as employed, part-time employed or self-employed? And might it make a difference to whether we get it?
His credit rating fine - he got a approved for a lease car last year but the income is not high (£20k+)
Any advice much appreciated - we don't want to give false information but it isn't that cut and dry.

chattychappy

Well, it confuses me too. A P60 is issued to an employee (or pensioner etc) to show amount of pay and tax deducted. Self-employed people usually receive income gross from clients/customers etc., have outgoings, prepare accounts and are taxed on profits.

It is, of course, possible to be both at the same time and I know there are all sorts of weird exceptions. Share fisherman in the priesthood in a church operated as an LLP on Sark?

If you could care to elaborate, then perhaps better advice could be given.

Anyway, provided you can objectively justify either status, I would put down "employed". The key thing is that whatever you do, it should be consistant across any other applications you make. I understand your concerns about being honest - to be dishonest can ultimately be fraudulent. But given that application forms consist of little more than boxes and don't really give you an "other" option, I don't think you need to worry.

dorcas.w

Yes it is the boxes that are a problem neither of us have ever fitted in to them! My husband is a classical musician in an orchestra that is employed full time for 35 weeks a year but sometimes more. They have schedule D tax status because so they can claim expenses relating to their instruments, practice at home, professional wear, and they are also free to do a certain amount of other freelance work.
The work for the orchestra is paid via a payslip & NI is taken off but no tax.
So he has payslips & P60 to prove most of his income but he fills in the Self Employment part of the tax return. So the question is what proof would they ask for?
As a former ballet dancer I was on the same tax status despite a 52 week a year contract with holiday pay. It started being phased out in the late 90s but those who had held it for a certain number of years could carry on. Quite a lot of performers, dancers and actors are on the same system for a variety of reasons to do with types of expenses.

chattychappy

I have never needed to prove my income when applying for a CC, though I think it can happen on occasion.

From what you say, I believe "employed" is the right status and that is usually the best from a scoring point of view. In my view it is justifiable on the grounds that the vast majority of his work is in his role as an "employee" of the orchestra for which a P60 is issued. Indeed it might be true that no tax is deducted, but that's just a function of tax coding. Income he derives from his self-employed work (the freelance work) appears to be ancillary.

If they did want to check, it sounds like the paperwork you do have (P60, perhaps annual tax statement?) together with the backstory should be adequate.

YorkshireBoy

What has he entered previously on credit applications?
What will he enter in the future?
There needs to be consistency (if his circumstances haven't changed/don't change), so as not to flag up FPA issues.

dorcas.w

To be honest we can't remember - I think on mortgages 20 years ago we were self-employed but that was before it became so much more difficult. I think it has not always been consistent - but with reason because it can be seen from both angles...
We decided to go ahead with employed & will see what happens. It is really just for our holiday & will be paid off at the end of the month anyway.