Self assessment newbie confused help appreciated

jbarnwellsalvage

Hello everyone firstly apologies if this is in the wrong section I wasn't certain which fit my situation best

I have recently started work after a long (years) absence for medical reasons. I am working for only one company but I am not employed and I am aware I have to pay my own Tax and NI.

My first question is would the above be classed as being self employed or contractor?

I have registered for a UTR reference with HMRC and have been keeping back 30% of my earnings for Tax and NI costs, can I pay my self assessment (if indeed that is what I should be doing) as I go along rather than wait till Jan 2025?

My only other income is a very small private pension from a previous employer (approx. £120 per month)

Sorry for the long question/s but I was always employed when I did work previously so this is all new for me

Many thanks for any help provided I appreciate it

eskbanker

jbarnwellsalvage said:

I have recently started work after a long (years) absence for medical reasons. I am working for only one company but I am not employed and I am aware I have to pay my own Tax and NI.

My first question is would the above be classed as being self employed or contractor?

https://www.gov.uk/working-for-yourself would be a good place to start researching your status and what you need to do.

jbarnwellsalvage

eskbanker said:

jbarnwellsalvage said:

I have recently started work after a long (years) absence for medical reasons. I am working for only one company but I am not employed and I am aware I have to pay my own Tax and NI.

My first question is would the above be classed as being self employed or contractor?

Thanks for the quick response

That tool is a lot more comprehensive than others I have checked on so thanks, the result there comes up as 
"employed for tax purposes for this work"

 our answers told us:

• you are providing a personal service to your client
• you have limited financial risk for this engagement

This means you are classed as employed for tax purposes for this work.

Thanks again

Bookworm105

tjbarnwellsalvage said:

eskbanker said:

jbarnwellsalvage said:

I have recently started work after a long (years) absence for medical reasons. I am working for only one company but I am not employed and I am aware I have to pay my own Tax and NI.

My first question is would the above be classed as being self employed or contractor?

Thanks for the quick response

That tool is a lot more comprehensive than others I have checked on so thanks, the result there comes up as 
"employed for tax purposes for this work"

 our answers told us:

• you are providing a personal service to your client
• you have limited financial risk for this engagement

This means you are classed as employed for tax purposes for this work.

Thanks again

your opening post contains a few red flags so I am not surprised you have arrived at that outcome, but the overarching issue is do you have your own company or not?

if you do, the problem with "employed for tax purposes" means you fall "inside IR35", so the next question is how big is your (presumably private sector) employer?
If "medium to large" then they should have done that test before offering you work as they must treat you like an employee so pay you through a payroll or HMRC may chase them for liability failure.. 
If "small", the liability is with you, but you will need to apply the rules in full, which may include you having to pay extra tax to HMRC on behalf of your employer.

I suggest you get your circumstances double checked by a high street accountant familiar with "IR 35" rules 
Understanding off-payroll working (IR35) - GOV.UK (www.gov.uk)
Important facts for contractors - off-payroll working rules (IR35) - GOV.UK (www.gov.uk)

PS "contractor" and "self employed" are not mutually exclusive terms so do not get hung up on deciding if you are one or the other. Self employed have customers for whom they do work, whether that work is defined by a verbal or written contact, they are nonetheless "contracting". The important bit is do you have a company.

jbarnwellsalvage

Bookworm105 said:

tjbarnwellsalvage said:

eskbanker said:

jbarnwellsalvage said:

I have recently started work after a long (years) absence for medical reasons. I am working for only one company but I am not employed and I am aware I have to pay my own Tax and NI.

My first question is would the above be classed as being self employed or contractor?

Thanks for the quick response

That tool is a lot more comprehensive than others I have checked on so thanks, the result there comes up as 
"employed for tax purposes for this work"

 our answers told us:

• you are providing a personal service to your client
• you have limited financial risk for this engagement

This means you are classed as employed for tax purposes for this work.

Thanks again

your opening post contains a few red flags so I am not surprised you have arrived at that outcome 

the problem with "employed for tax purposes" means you fall "inside IR35", so the next question is how big is your (presumably private sector) employer?
If "medium to large" then they should have done that test before offering you work as they must treat you like an employee so pay you through a payroll or HMRC may chase them for liability failure.. 
If "small", the liability is with you, but you will need to apply the rules in full, which may include you having to pay extra tax to HMRC on behalf of your employer.

I suggest you get your circumstances double checked by a high street accountant familiar with "IR 35" rules 


PS "contractor" and "self employed" are not mutually exclusive terms so do not get hung up on deciding if you are one or the other. Self employed have customers for whom they do work, whether that work is defined by a verbal or written contact, they are nonetheless "contracting".

That is very helpful thanks for help and links