Self employed - What are the benefits?

GarethK

I start my new job shortly and its on a self-employed basis. My 'employer' has to be invoiced every week so they know what work i have done. I have to cover the cost of fuel/running costs of car etc.

What will my basic rate of tax be? 22% as per normal PAYE but different NI contributions? What can i claim back for?

Many thanks!

PasturesNew

If you are only working for one company, it breaks the rules about whether you are self-employed or not... and, it might even be considered that you needn't worry about tax at all. Spend it. Keep it.... because if he is your only client.... then he will be deemed to be your employer and will be liable to pay your back tax

But that's another issue and there's a bit more to it than that.

GarethK

PasturesNew wrote: »

If you are only working for one company, it breaks the rules about whether you are self-employed or not... and, it might even be considered that you needn't worry about tax at all. Spend it. Keep it.... because if he is your only client.... then he will be deemed to be your employer and will be liable to pay your back tax

But that's another issue and there's a bit more to it than that.

It is working for one company, permanantly. A number of friends work for the same company and always get around £350-400 a week approx sometimes more but this is gross earnings.

There is a chance of being a PAYE employee which i would prefer because it is less hassle but many people say you end up paying less as self-employed because of various entitlements and things you can claim back.

In the contract i have to sign it says i am responsible for paying any tax, and obviously its not going to be any good not paying tax once my first child is born as i want to claim WTC/CTC!

ckerrd

Read this
http://www.hmrc.gov.uk/pdfs/ir56.htm

From the basic info you have given you may not be self employed

Conor_3

I'd say definitely not. Just think, if they're getting £400 a week, the employer is saving themselves £48 a week in Employers NI per employee, not to mention holiday pay etc.

GarethK

To break it down (still think its self employed) i'll copy and paste =

• Can you hire someone to do the work for you or engage helpers at your own expense? No
• Do you risk your own money? Yes, i have to pay insurance on my car, fuel and maintainence, plus parking fees etc?
• Do you provide the main items of equipment you need to do your job, not just the small tools many employees provide for themselves? I have to use the internet to download my work, the paper, printer ink, folders etc.
• Do you agree to do a job for a fixed price regardless of how long the job may take? The price is set per job by my ''employer''
• Can you decide what work to do, how and when to do the work and where to provide the services? I can chose what time i want to start and finish, and in any order i want to.
• Do you regularly work for a number of different people? I have to travel to different merchant customers, 5-10 a day.
• Do you have to correct unsatisfactory work in your own time and at your own expense? If i have broken something, i have to fix it! I can chose to abort jobs though.

To me it sounds like i will be self-employed.

PasturesNew

GarethK wrote: »

Do you regularly work for a number of different people? I have to travel to different merchant customers, 5-10 a day.

I've just picked this one to start with as this was glaringly the most obviously misleading...

No. Who you work for is the person who you are invoicing. ONE company. HE is being paid by the many people you visit if you make a sale. So you have only ONE person you work for.

So: not self-employed

GarethK

Conor wrote: »

I'd say definitely not. Just think, if they're getting £400 a week, the employer is saving themselves £48 a week in Employers NI per employee, not to mention holiday pay etc.

As self employed they are not entitled to anything so in that respect, it is S/E, the company pays the engineer £15 per job but actually gets £60 roughly, the invoices for jobs done are sent in weekly and you are paid 4 weeks behind so say if i worked 1st week of Jan, and invoiced for £300, i wouldnt see that until 1st week of Feb. Out of that the cost of fuel has to be deducted and that can be up to £60-70 quid.

More confused now!

PasturesNew

The rest are a bit harder without having a clue what you do.

GarethK

PasturesNew wrote: »

I've just picked this one to start with as this was glaringly the most obviously misleading...

No. Who you work for is the person who you are invoicing. ONE company. HE is being paid by the many people you visit if you make a sale. So you have only ONE person you work for.

So: not self-employed

So what if, i work for 6 months and not pay a penny of tax, the tax man catches up with me and says hang on a second, why are you not paying any tax? To which i say, i thought my 'employer' was responsible but in my contract it says 'I' am actually responsible for paying tax/N.I on my earnings? Would they still be liable or does the contract effectively get them out of paying tax?

Gareth

GarethK

PasturesNew wrote: »

The rest are a bit harder without having a clue what you do.

Installing and upgrading credit card machines.