Overtime as sole trader; is it worth it?

TJKeets90

Hi all,

I am thinking of being paid my overtime as a sole trader but unsure if it'll be beneficial.

My basic income is close to the higher tax bracket so I'm getting taxed 40% on pretty much all of my overtime.

My overtime is me being on call in my house from 5pm until 8am the next day. So I believe I can claim a portion of certain utilities bills back?

Is it worth the hassle and would I save much tax?

Thanks in advanced for any advice!

baser999

If the overtime is connected to your main employment I cannot see how you can argue that it’s being earned by way of you being self-employed for that element of the work?

Grumpy_chap

TJKeets90 said:

Hi all,

I am thinking of being paid my overtime as a sole trader but unsure if it'll be beneficial.

My basic income is close to the higher tax bracket so I'm getting taxed 40% on pretty much all of my overtime.

My overtime is me being on call in my house from 5pm until 8am the next day. So I believe I can claim a portion of certain utilities bills back?

Is it worth the hassle and would I save much tax?

Thanks in advanced for any advice!

Are you saying that you work for a company as an employee but want your overtime to be treated by the company as you working as an independent contractor (sole trader)?

I'd be very surprised if the company would be amenable to that approach.

If the aim is to avoid a small amount of earnings creeping into the higher rate tax bracket, alternative considerations (such as increase pension contributions) could be more viable and much simpler.

Jeremy535897

You cannot be an employee of a company and receive income as a self employed person from that company.

TJKeets90

Jeremy535897 said:

You cannot be an employee of a company and receive income as a self employed person from that company.

Thanks Jeremy I did not know this. 

Jeremy535897

TJKeets90 said:

Jeremy535897 said:

You cannot be an employee of a company and receive income as a self employed person from that company.

Thanks Jeremy I did not know this. 

I should clarify that this is where the work is connected. It would be possible, for example, to be employed in a call centre, and also be a self employed DJ for various different customers. If your employer also happened to be one of your customers as a DJ, then they would not be obliged to operate PAYE on your bill for DJ services. Clearly, however, that is unsustainable where you are talking about the same (or even similar) work, just out of normal hours.

Andy_L

Jeremy535897 said:

You cannot be an employee of a company and receive income as a self employed person from that company.

I think you can, but it has to be obviously different work. 

eg a self-employed electrician does a few shifts of PAYE bar work in the evening to supplement his electrician income. He then gets a contract to install some new outdoor lights & heaters at the same pub which he does during the day whilst still pulling pints at the same pub in the evening.

would be different to, say, a computer programmer employed by a company to...err...program computers, who then works at weekends for them as a self-employed computer programmer

Jeremy535897

Andy_L said:

Jeremy535897 said:

You cannot be an employee of a company and receive income as a self employed person from that company.

I think you can, but it has to be obviously different work. 

eg a self-employed electrician does a few shifts of PAYE bar work in the evening to supplement his electrician income. He then gets a contract to install some new outdoor lights & heaters at the same pub which he does during the day whilst still pulling pints at the same pub in the evening.

would be different to, say, a computer programmer employed by a company to...err...program computers, who then works at weekends for them as a self-employed computer programmer

As I said in my second post. OP made it clear that the income is in respect of the same sort of work, just at different times..

On-the-coast

And…. Of course it’s worth doing the overtime if you want more income. 

There’s only about 10% difference in take home pay before & after the threshold that’s worrying you. 

Only you know if it’s worth your time - but I’m guessing that if you’re ‘on-call’ you’ll be working less than 90% of the time you’re paid for…