tax and self employed

[dombanks]

anyone here a financial adviser and knows about doing taxes? im in talks with a company but they want me pay my own taxes and its something i really have no clue about. I dont really want to say much more about who they are, what they do, and why they want to work this way on an open forum.

 

ive been reading the hmrc site a bit and what i don't get is at the moment i pay XXX NI and the uni pays XXX NI which is a bit more than my contribution so if i were to be self employed do i have to cover both mine and what the uni pays at the mo? i tried a few calculators and all it says is i would have to pay class 2 at  £xx.xx and class 4 at £XXX.00 which is no where near what the "cost of an employee" calculator the university says its costs to employ me at the moment. so im a bit confused.

[Stuart]

I've been a sole trader for a year now so have to fill in my first tax return soon - as I understand it, it's class 2 at £2-odd a week + class 4 at 9% of your 'profit'.  But I'm sure someone will know more about it than I do.

[Terry Everall]

As a sole trader ( self employed ) you will need to pay for your own holidays, finance your first 4 weeks, pay for your sickness, look at effect on pension fund etc

NI is low and completing forms not expensive and you can use accountants who are not too expensive to guide you

You will be able to keep records of expenses to claim against tax including travel etc

You need an invoicing system

You may need to take out Public liability and Professional indemnity insurance if needed and watch how much you earn as you may need to be VAT registered

Setting up your company is quite easy

[bhouse]

HMRC are quite hot on what constitutes an employee and have an online test so one can check one's status.

The reason is that if  a company uses freelances rather than employees, then HMRC (and thus the Great British Public) are likely to see less tax.

 

If the company with whom you're in discussion will be your only client - or constitute so much of your income that they are in effect your only client - then HMRC are likely to decide that you have not been self-employed but employed. They can then chase both you and the company for the 'missing' revenue  and also have the option to prosecute.

 

If you are able to register as self employed there are both advantages and disadvantages. Talking to a qualified tax adviser woule be a Very Good Idea!

[dombanks]

thanks

 

bhouse that was one of the questions i had, it seems a very grey area depending on what you read and its one of my concerns,

 

thanks for the replies so far, im booked to see someone tomorrow who hopefully will be able to help. its all a bit exciting... work life has been a bit stagnant so its about time something shook me up a bit.

[bhouse]

Dom - as long as you can satisfy the HMRC criteria for self-employment then I'd heartily recommend it as an option. Your only job security is keeping your clients happy, but at least you can choose who your clients are!

 

Good luck!

 

Brian

[Nemesis]

I would wholly recommend you forming a limited company, have a word with Sue Gee at Blackwell Bate 01752 840555

 

Regards

 

Nem.........

[dombanks]

ive looked into that and the advice Ive been given is not to at this time, what i will be potentially doing and the time lines don't really lend itself to doing so at the moment but thanks for the contact nemsis  (i found a great adviser right here in the university ... go figure!)