Help with tax expenses for self employed

TheCyclingProgrammer

DoctorStrange wrote: »

"OP said they are acting as self employed so IR35 is completely irrelevant as it only applies to people working through intermediaries."

He is working for the client through his own intermediary...

OP stated that they are a sole trader/self employed so I guess they ought to clarify.

Pennywise

DoctorStrange wrote: »

Yeah, very confusing!

I think though he mentioned that also does some freelance web development, so I took that as being under his 'sole trader' guise.

Then, when he applied for this job, they told him it'd be on a self-employed basis and hence he needs a limited company, which I think is being mixed up with his sole trader status.

I guess the only advice we can offer just now is for OP to seek absolute clarity over the arrangements.

I don't think the OP has mentioned limited company at all? Why would you think "he needs a limited company"??

DoctorStrange

The OP said:

"I get paid weekly and I bill them for the work carried at the agreed amount, I invoice them with my company details."

The reason I thought the client would insist on a limited company (or brolly) is that clients (in my field at least) never engage with sole traders given the risks of claiming employment rights.

Plus, why would one engage with a client (which in this case means "work for full time") on a sole trader basis, with unlimited liability and zero rights? Would you not be better off as a full employee?

The situation is confused but, reading between the lines, I'm thinking the OP has been asked to engage on a limited company basis.

We really need clarity though...

Pennywise

DoctorStrange wrote: »

The reason I thought the client would insist on a limited company (or brolly) is that clients (in my field at least) never engage with sole traders given the risks of claiming employment rights.

Bigger employers with risk averse HR depts - yes, I'd agree, but there are lots of smaller firms who engage "sole traders" and don't insist on limited company status, either because they don't understand the HMRC employment status tests or because they do understand them and have drafted their working practices to be genuinely self employed.

uknick

SpiderLegs wrote: »

Can you provide a source for this as I discussed this exact subject with HMRC last week.
The references and information I gave were provided by them.

The general rule regarding a permanent place of employment is, you spend more than 40% of your time there and for more than two years. However, if you're on a fixed term employment contract it is 40% and the duration of your employment if less than a 2 year contract.

If both the conditions are not met then it can be considered a temporary place of employment, thus allowing the travel to be tax deductible.

This is the link,

https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim32080

However, as with all tax rues it is not that simple. For example, if you're expected to travel to more than one work location on a regular basis, then the 40% rule may not apply. An example given by HMRC relates to management board meetings. If a management team meet at a remote location, say a hotel, for their regular monthly meeting, this travel would not be tax deducible for the individual.