Self employed - What are the benefits?

GarethK

scbk wrote: »

All expenses related to your business can be deducted from your income.

So tools/workwear/fuel/servicing/road tax/insurance/paper/ink etc etc

Ok here is another good one.... What if i am using vegetable oil as a fuel? As some will know, this is not liable for duty until you exceed 2500L per year, i would be close to that for sure, but how much of the cost of fuel can i claim back, if any?

Savvy_Sue

I agree you need to check with HMRC, because it's THEIR decision which counts - not yours, and not your employer's. And if they decide 6 months down the line that you've been employed all the time, that's a big bill coming your employer's way, and possibly yours too, because your income has been paid to you gross.

And yes you can set all that stuff scbk lists against your tax liability, but remember you get no paid holiday, no entitlement to SSP, no entitlement to Contributions based Unemployment Benefit etc etc etc. So you do need to set aside for all that PLUS your tax liability: can you afford to do that on your gross wage?

GarethK

Savvy_Sue wrote: »

And yes you can set all that stuff scbk lists against your tax liability, but remember you get no paid holiday, no entitlement to SSP, no entitlement to Contributions based Unemployment Benefit etc etc etc. So you do need to set aside for all that PLUS your tax liability: can you afford to do that on your gross wage?

Yes i can afford to do it, i've been earning £280 net for my previous employer and it was enough, so as long as it hits £350-360 gross i will be better off, as i will be doing less hours and have more times for other things.

Still dont know how much i would have to pay for N.I contributions or does it work the same as PAYE?

Gareth

ckerrd

It is possible to be employed and self employed at the same time.

Simple question - if your "employer" (for want of a better word at this stage) phoned you and said he wanted you to do some work tomorrow morning, could you say "no thanks, I will stay in my bed instead"?

Take a look at the HMRC website, it has loads of info.

The stuff below is from the directgov website.

If you're self-employed

• you pay 'Class 2' NICs at a flat rate weekly amount of £2.20
• you also pay 'Class 4' NICs as a percentage of your taxable profits - you pay eight per cent on annual taxable profits between £5,225 and £34,840 and one per cent on any taxable profit over that amount
• if your earnings in the 2007-2008 tax year are expected to be less than £4,635 then you may be entitled to the Small Earnings Exception (SEE), meaning you don't have to pay any Class 2 NICs - you can apply for SEE for the 2007-2008 tax year on form CF10

sandy_beech_2

i was looking at going self employed. NI contributions is £2.10 per week and tax is in the region of 20%.

Soubrette

One point - risking your own money isn't spending your own money - it's more to do with the investing your own money. So if something goes wrong with one of your installations - do you have to fix it in your own time and at your own cost.

Likewise tools are not things like internet connections and printing things off at home, it's more the tools of your trade so in this instance, who provides the tools you need to install things?

I'm afraid to say that it looks to me as if you are probably employed, sorry

Sou

GarethK

Soubrette wrote: »

One point - risking your own money isn't spending your own money - it's more to do with the investing your own money. So if something goes wrong with one of your installations - do you have to fix it in your own time and at your own cost.

Likewise tools are not things like internet connections and printing things off at home, it's more the tools of your trade so in this instance, who provides the tools you need to install things?

I'm afraid to say that it looks to me as if you are probably employed, sorry

Sou

If something went wrong it would only be my time at risk any equipment would be replaced at my employers cost.

My employer would provide all the items needed to complete installs including spare parts.

In this instance, once i have started working for them i will speak to HMRC, explain what i do and register as self employed to cover me, the employer would just pay money direct into my bank account including fuel expenses or training with no tax deducted, i will open another bank account to out aside deductions off my wages and a little bit more to pay for an account when the time comes for a tax return.

Gareth

ckerrd

Sounds very much as if you are an employee.

I would try and get this sorted as soon as possible.

Phone HMRC and speak to them and explain the situation no need to wait.