Is there any way I can avoid paying BR tax on my freelance income?

specialhat

I am a freelancer and work casually for several different companies, 99% of which tax me at source*. I am taxed at Basic Rate by all of my employers and, irritatingly, pay NI contributions at source as well as through monthly contributions (I will apparently get the balance back at the end of the tax year). I am really feeling the sting.

I don't have a local tax office really, as all my different employers seem to have different tax offices.

Is there any way I can be on a slightly less painful tax band?

* I put 30% of any other earnings that are not taxed at source straight into a savings account for when the bill comes.

fengirl_2

You need to nominate one employer as your main employer, and ask your own tax office to allocate your personal allowances to that job. Of course if you do that, you won't have your PA's available against your self employed income, but I can understand that it will be better for your cash flow.

specialhat

Thanks for your reply. Unfortunately I don't work anywhere regularly enough to nominate them really. I am doing a 1-week booking here, a 3-week booking there, a 2-week booking somewhere else, etc. Maybe if I do start getting a regular gig somewhere I will look into this though. Thank you.

Sully316

Why not just stay self employed and work purely as a contractor. Dependant on the type of work you are doing you could even be a subcontractor (Construction Industry Scheme only though). Do you have to be employed each time ? This way you will receive everything gross, no tax deductions and you can put the money yourself into a savings account, plus you would be able to claim deductions against your income, travel etc. if your self employed.

Cook_County

Sully - the OP has said he is an employee.

Which of the badges of trade make you think he is self-employed?

specialhat

I am a freelance journalist (and self-employed, inc in the eyes of the tax man - I am registered as self-employed and still have to pay monthly NI contributions by DD) but most places I work insist on paying me through payroll as a "casual" employee. This is standard for my industry. Can I refuse this?


ETA: I am female!

Cook_County

Effectively no, but you could set up your own company which might help.

wolfinsheepsclothing

I have a great charted accountant and IFA who would be happy to consult with you free phonecall cant hurt and might be able to advise you the best way he's helped me allot by setting up ltd companies etc.. and getting the people to fill the right forms in for were i work etc... makes life alot easier feel free to pm me with your email address and I get him to email you

McKneff

if you are classed as self employed why are these companies paying yu through the payroll, you should be sending them invoices with terms of
'payment on receipt of invoice' you may not get paid quite as quickly
but you will certianly not be classed as 'casual'
not sure what to do - see the inland revenue, contrary to popular opinion they really can be a big help

Simplex D book from w h smith is easy for newies to self employment
just started myself last year. good luck

jimmo

I am afraid that you may have an insurmountable problem. All the suggestions here about self-employment and becoming a limited company have their theoretical merits but you have to live in your own world.
I never dealt with the press in my days as a Status Inspector but I found this link http://www.hmrc.gov.uk/manuals/esmmanual/ESM4183.htm
That suggests to me that the press generally has been under the mill with the taxman and most companies will have developed a policy on how they pay their occasional freelancers.
That is they will tax you at basic rate under PAYE.
If you want to break that trend you have to not only break the government red tape but also the newspaper’s.
As I don’t know your world of journalism please forgive me if I go off the rails but as an example let’s say that on 1/6/08 you accepted an assignment, staring on 2/6/08 to submit an article for publication by 4/6/08 for £500.
By their standard terms the newspaper will pay you the £500 on 30/6/08.
If all that was put in place over the telephone then on 30/6/08 you’ll get your payment after tax and NIC.
Hopefully the newspaper has an efficient internal organisation in place which ensures you will get your money on time.
Now, if in your opening conversation/negotiations for the job you say to your contact something along the lines that you do not wish to be paid that way because of (a or b) then either they’ll ignore you and carry on and pay you after tax and NIC or they will hold up your payment until they have enough paperwork in place to prove they are right not to deduct tax or NIC.
Sorry to state the obvious, but you are probably better off to accept overtaxed payments rather than nothing for the time being.
I rather suspect that most newspapers will operate one or more PAYE systems for their regular staff and separate PAYE schemes for the casuals. In my days the big problems were with casual printers and manual workers. If I recall correctly there were reputedly at least 5,000 Michael Mouse s doing casual work in Fleet Street at one time.
The only hope I can think of now is that maybe, if you regularly work for a number of newspapers one or two of them may be prepared to keep you on their payroll permanently but, frankly, I doubt it.
As it stands, I think you really should be able to achieve a better result in theory but in practical terms you will spend so much time battling against red tape that you won’t have much time left for earning a living.

brownbabygirl

Cook_County wrote: »

Effectively no, but you could set up your own company which might help.

or get an umbrella company to handle it all for you.