Employed and self-employed - confused!

Stratfordben

I'm starting a new job in January as an IT Contractor which means I'll be registering with an umbrella company. I believe this means I'll be classed as Employed.

However, for the next 4 week's I'll be doing some temporary work as a courier on a self employed basis.

I've never been self employed and don't know where to start. I know that I'll need to register with HMRC as self employed. But do I then unregister after I'm finished doing the temp work? Do I need to do a self assessment tax return next month for the 4 weeks?

I've trawled the web and also the Gov websites so much that I've confused myself now.

Really hope someone can help point me in the right direction!

Thank you all

Comms69

Your self assessment will be due in Jan 2020, if doing online.


You wont be employed by the umbrella company as such. But they will sort out your tax etc.

Wyndham

I used an Umbrella company for awhile, but classed myself as self employed (I was also IT contracting).

I do a tax return, but find that quite straightforward as the umbrella company has already done much of the work for me. I also claim expenses through that, but we warned, there are only certain things you can claim for an it's a complex area (in my case I was working away from home, so claimed travel costs and accommodation).

Stratfordben

So, even under an umbrella company I could be classed as self employed?

How does that work then, is there any risk of duplication or missing records etc if you're doing a tax return but the umbrella are doing some of it too?

Thanks both

Samsung_Note2

Becarefull with the umbrella company as some can take quite a large chunk to process your payment..also remember they will take both your Ni and Employers Ni out of your money.

Id go self employed for all of it and make sure you claim everything you possibly can.

Stratfordben

Thanks for your reply and tips.

Regarding the contractor job and the Umbrella company - I was under the impression that I have 2 options:
1) Register with an Umbrella company - they act as my employer for all intents and purposes (i.e. give me employment history etc.), or
2) Register a limited company and operate using this.

Of the 2 options, for tax etc., the Umbrella seems the easiest option. Starting a limited company sounds very daunting. I'm only 24 and have been in permanent, PAYE positions throughout my working life so far.

If I am able to go self-employed (without creating a limited company or using an umbrella company), I do worry about the tax returns and everything that goes with that. I wouldn't like to make a mistake and receive a massive tax bill the following year.

It just seems like such a complicated area!

Samsung_Note2

Why not go as a sole trader...just keep a list of expenses (anything to do with work is claimable) and do your tax return once a year.

Pretty simple to do...or worst case employ a book keeper or similar and ask them to act your behalf,then obviously claim there expenses back.

The use of umbrella companies can be costly when they take there chunk out of your wages.

Wyndham

I found the Umbrella company useful to get up and running, and they do make things easier (though do also take a cut, of course).

I would however have gone limited around a year or so ago, except that I'm in the Public Sector and IR35 came in.... OP - you may want to google that. Currently only Public Sector, but probably coming to the private sector at some point. If you are with an Umbrella, you don't need to worry about it.

System

Stratfordben wrote: »

So, even under an umbrella company I could be classed as self employed?

How does that work then, is there any risk of duplication or missing records etc if you're doing a tax return but the umbrella are doing some of it too?

Thanks both

You are not self employed under an umbrella company set up. You are being taxed under P.A.Y.E. so do not need to complete a self assessment unless you actually have income outside of your contract that needs to be declared.

Potbellypig

Stratfordben wrote: »

Thanks for your reply and tips.

Regarding the contractor job and the Umbrella company - I was under the impression that I have 2 options:
1) Register with an Umbrella company - they act as my employer for all intents and purposes (i.e. give me employment history etc.), or
2) Register a limited company and operate using this.

Of the 2 options, for tax etc., the Umbrella seems the easiest option. Starting a limited company sounds very daunting. I'm only 24 and have been in permanent, PAYE positions throughout my working life so far.

If I am able to go self-employed (without creating a limited company or using an umbrella company), I do worry about the tax returns and everything that goes with that. I wouldn't like to make a mistake and receive a massive tax bill the following year.

It just seems like such a complicated area!

Very easy to set up a Ltd company. You can do it online in the time it takes you to do a poo. Then all you have to do is invoice the company you're contracting to every month (or whenever they require) and the rest an accountant can sort out for you. Get a decent accountant and they will advise you on all the tax savings you can make. Umbrella companies are not interested in saving you money.

Wyndham

Walcott wrote: »

You are not self employed under an umbrella company set up. You are being taxed under P.A.Y.E. so do not need to complete a self assessment unless you actually have income outside of your contract that needs to be declared.

Yes, true, but if you want to claim expenses, you do have to do a tax return. I claimed accommodation and travel (due to being away from home Monday to Friday). If you're working close to home it's probably not an issue, but it made a difference to me.