Self employed tax discussion

radical87

Hi all -
I have been offered a 6-9months project to work as a corporate finance advisor. I have decided to do this as a self-employment rather than limited company as i do not intend to work on project basis and would much rather prefer to work on permanent pay roles. I had a few questions around self-employment tax assessments.

1) Working out of UK - I’m currently based in UK but plan to work for 1 month based out of UK. As i understand, the period you are not in UK, you do not have to pay taxes for income earned in UK? Let me know if that is true? I do have an offshore account set-up and the funds would be coming in that account.
2) Business expenses - I plan to work from home and would need to set-up my home office (i.e. desk, chair, laptop and screen), can I claim all these as business expenses even though their usage life would outlast the contract tenure? Also, would i be able to claim back my meal expense during office hours?

Any help is highly appreciated. 

Kind regards,
B

oldbikebloke

your knowledge of personal taxation is zero 
1.  Have you ever heard the phrase tax resident? How long have you been in the UK? One assumes you are a UK tax resident, in which case 1 month aboard and you think you can evade tax?
Read up on the non resident rules, they are easy to find with google. Had you said out of the UK between 6th April year 1 to 5th April year 2 you would have had a chance, but 1 month, NO, you are having a laugh if you think that. 

Have you declared your offshore account or are you evading on that? 
https://www.gov.uk/government/publications/ten-things-about-offshore-assets-and-income/ten-things-about-offshore-assets-and-income

2. you can claim the business use element of the capital allowance for such items 

as for meals, you are having a laugh? You are sitting at home, you are not incurring out of pocket expenses whilst travelling. Of course you cannot claim for that, it is your lunch, the meal you would eat whether working or not, ie personal expenditure.  

Jeremy535897

A limited company is usually required where you would be an employee if you worked directly for the customer. That is a question of the facts, but most of the risk is on the "employer" if they get it wrong. That is not always the case, though.

As pointed out above, doing a bit of work abroad makes no difference from a UK tax point of view, although you will have travel expenses you can claim. In theory you would have to check whether the other country would seek to charge any tax, and then look at the double tax agreement, but for one month this is unlikely to be an issue.

If the offshore account doesn't earn interest, it's not an issue, but where you hold money (UK or abroad) is unlikely to affect your UK tax position (it matters for short term UK residents whose permanent home is abroad).

As noted above, you can claim for expenses in respect of your trade, and capital allowances on items like computers, for the business proportion. When you cease your self employment, their market value is treated as sale proceeds and that may add to your taxable profits at that point.

You can claim for meals where you are away from home overnight for the purposes of your work, as long as they are reasonable.

You will have to register as self employed with HMRC.

See https://www.gov.uk/set-up-sole-trader
https://www.gov.uk/government/publications/residence-domicile-and-remittance-basis-rules-uk-tax-liability
https://www.gov.uk/expenses-if-youre-self-employed

prowla

oldbikebloke said:

your knowledge of personal taxation is zero 
1.  Have you ever heard the phrase tax resident? How long have you been in the UK? One assumes you are a UK tax resident, in which case 1 month aboard and you think you can evade tax?
Read up on the non resident rules, they are easy to find with google. Had you said out of the UK between 6th April year 1 to 5th April year 2 you would have had a chance, but 1 month, NO, you are having a laugh if you think that. 

Have you declared your offshore account or are you evading on that? 
https://www.gov.uk/government/publications/ten-things-about-offshore-assets-and-income/ten-things-about-offshore-assets-and-income

2. you can claim the business use element of the capital allowance for such items 

as for meals, you are having a laugh? You are sitting at home, you are not incurring out of pocket expenses whilst travelling. Of course you cannot claim for that, it is your lunch, the meal you would eat whether working or not, ie personal expenditure.  

Cor - is Mr Grumpy in the house today?

oldbikebloke

prowla said:

Cor - is Mr Grumpy in the house today?

I find it remarkable that so many people in what one assumes to be very well paid jobs can be so ignorant of the basics of UK life. I accept that the failure to teach "home economics" (or some such title) in school does not help prepare people for real life.

Jeremy535897

oldbikebloke said:

prowla said:

Cor - is Mr Grumpy in the house today?

I find it remarkable that so many people in what one assumes to be very well paid jobs can be so ignorant of the basics of UK life. I accept that the failure to teach "home economics" (or some such title) in school does not help prepare people for real life.

That's a very interesting question. I learned only the "classic" subjects for O level at school (Maths, Additional Maths, Physics, Chemistry, English Language, English Literature, French, German, Latin, History), and only really learned anything about finance, accountancy and tax by becoming a chartered accountant and chartered tax adviser. Out of all those subjects, English Language and some of Maths had some use, Latin helped with spelling, and the rest were of no value in terms of their content, although educationalists would claim they are necessary to make you a more rounded person, and historians like to pretend Henry Ford was wrong.

I wholly agree with Martin Lewis that basic finances, tax and cybersecurity should be part of the modern curriculum, in place of subjects like French and German (although I enjoyed them both). We need sciences and engineering too, but most people won't benefit from subjects like chemistry.

csgohan4

sadly OP as you understand, your basic research is lacking. If you don't invest in your money, you won't get much back, but you will get a hefty fine from the HMRC though. 

You don't need to be a qualified accountant to understand the basics of what you can and can't claim, tax returns, P87 e.t.c

holdinfoldin

Hi i have recently become self employed can someone point me i the right direction as to what i can claim tax for. i am a scaffolder can i claim back for tools clothing etc.  thanks 

Jeremy535897

If you have done nothing about registering as self employed, see https://www.gov.uk/set-up-self-employed
For expenses you can claim, see https://www.gov.uk/expenses-if-youre-self-employed
This is a guide from a source other than government:
https://www.litrg.org.uk/tax-guides/self-employment

You should also look at https://www.gov.uk/what-is-the-construction-industry-scheme

Scaffolding hire is not in the scheme, but labour is.

Grumpy_chap

holdinfoldin said:

Hi i have recently become self employed can someone point me i the right direction as to what i can claim tax for. i am a scaffolder can i claim back for tools clothing etc.  thanks 

With such a broad question, the type of support you need would be better answered by engaging an Accountant to provide advice on how best to structure the business and manage expenses plus income.
Do you have all the insurances in place that the business requires?

holdinfoldin

thanks for replies  i don,t own the business i am just a self employed employee i was trying to sort it out myself to save money as i was unemployed for quite some time.