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Old 14-03-2018, 10:19 AM   #11
Derekh929
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Originally Posted by Marve View Post
This is nonsense! The tax brackets are the same for PAYE and Tax Returns.
Yes totally agree , I think the IR would love to Visit Brian soon

I think maybe Brian means the National Insurance is Different and based on set percentage up to set level then smaller percentage above that, plus the good old flat rate.

I have been self Employed for 32 years and I thought wait a minute why are they giving Brian so much special treatment, does he work In East Kilbride
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Old 14-03-2018, 11:06 AM   #12
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The monthly contribution for NI is only a small amount, but then you get a big hit of NI included in tax statement after your return! Hit me in the backside the first year i was s/e, I thought i was so much better off only paying a few quid a month, then the unexpected NI entry in the tax bill arrived!

You can't claim tax relief on everything you buy either, only business related expenses.

As for the OP, if he is only working for the one company and nobody else then it is a tax job by the employers, no company NI to pay, no holiday pay, no sick pay, no pension and no employee rights. Very common place, but many companies go into liquidation when the IR catch up with them and give them a nice backdated bill.
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Old 14-03-2018, 12:18 PM   #13
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Quote:
Originally Posted by Derekh929 View Post
Yes totally agree , I think the IR would love to Visit Brian soon

I think maybe Brian means the National Insurance is Different and based on set percentage up to set level then smaller percentage above that, plus the good old flat rate.

I have been self Employed for 32 years and I thought wait a minute why are they giving Brian so much special treatment, does he work In East Kilbride
Ltd company is what I am talking about.
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Old 14-03-2018, 12:34 PM   #14
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Ltd company is what I am talking about.
That makes more sense, you had me worried I was losing out, Limited company may be great to limit liability, but the break even point compared to sole trader, is a lot higher threshold since they changed it all in last couple of years, along with a far bigger accountants bill.

I think I looked at examples on both options and £55k+ was showing slightly better on limited, before the changes many lower than this were Limited company for sure.

I suppose it would depend how the monies were drawn from the ltd company as well, if all salary then would be same bands if mostly dividends then yeas different rates for sure.
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Old 14-03-2018, 12:54 PM   #15
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Ah...but if you are a Director of a limited company, you are an employee, not self-employed
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Old 14-03-2018, 06:23 PM   #16
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I work for HMRC and I think you need to use some common sense here.

Who sets the terms and conditions of the engagement/contract?

Who sets the rate of return (pay)?

Basically being self employed can be determined if the following is true......

Checking if they’re exempt from PAYE

Someone is probably self-employed and shouldn’t be paid through PAYE if most of the following are true:

they’re in business for themselves, are responsible for the success or failure of their business and can make a loss or a profit

they can decide what work they do and when, where or how to do it

they can hire someone else to do the work

they’re responsible for fixing any unsatisfactory work in their own time

their employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finish

they use their own money to buy business assets, cover running costs, and provide tools and equipment for their work

they can work for more than one client

If ALL the above applies then probably self employed.

If the opposite applies to the above statements, then the person "offering the job" is controlling the terms of engagement and therefore trying to avoid accounting for PAYE.....when in reality the person being offered the job should be classed as an employee and subject to PAYE as such.

EDIT: the following is also true if someone is truely self employed....

they put in bids or give quotes to get work

they’re not under direct supervision when working

they submit invoices for the work they’ve done

they’re responsible for paying their own National Insurance and tax

they don’t get holiday or sick pay when they’re not working

they operate under a contract (sometimes known as a ‘contract for services’ or ‘consultancy agreement’) that uses terms like ‘self-employed’, ‘consultant’ or an ‘independent contractor’


So OP taking ALL of the above into account, is your son going to be self employed?

Last edited by Andyg_TSi; 14-03-2018 at 06:31 PM.
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Old 14-03-2018, 06:37 PM   #17
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I did it.

Request a UTR number from the tax office. My employer stopped my tax at source and then I simply did a self assessment and got it back.

Self employed is common as if work dries up the employer has no obligation to pay. Generally No sick pay, no holiday pay no pension
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Old 15-03-2018, 08:34 PM   #18
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Andy has put the main questions to think about in his post but an important point is understanding that whether you are employed or self-employed is a question of fact and not a choice. If an employer demands that an employee reports their status as self-employed, this does not terminate the employment relationship from a tax perspective and you risk a significant tax bill in the future.
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Old 15-03-2018, 08:37 PM   #19
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Ah...but if you are a Director of a limited company, you are an employee, not self-employed
Not necessarily, though directors can be employees they could also be office holders
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Old 15-03-2018, 08:54 PM   #20
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I understand your thoughts and feelings and I’ve been self employed recently after years of PAYE.

Quite a lot more companies are doing it. There are advantages and disadvantages for both but in my opinion there’s nothing sinister about it. If he was PAYE they may have workplace pensions, holiday pay, sick pay, training courses etc to pay for him but self employed they don’t alve that to contend with. So yes he doesn’t ge that as such but with a good accountant he can still have lots of benefits and remain within the legal framework.
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