Becoming Self-Employed

Tyrone Dobbs · Apr 28, 2011

A friend who set up on his own last year wants to take me on as an electrician's mate. He's been on his own all this time but is one of the lucky few who are struggling to cope with the workload.

If I accept the job (I'm fairly certain that I will...), I'll be technically self-employed. I'm aware of the various pitfalls that come with being self-employed (no sick pay, no holiday pay, no work= no pay, etc) but I was wondering if any of you could help me with a bit of advice?

When it comes to being paid, will I just give him an invoice in a duplicate book?
Should I keep all of my receipts relating to the work?
Will I be classed as being self-employed or a sub-contractor?
Is there a different tax rate for the two?

I'm gonna have a read of the hmrc website, but I reckon it's just better to get this sort of information from real people

Just incase anyone is interested, I have the C&G 2330 level 2 and 3 and 17th Edition and a couple of years' experience in domestic, commercial and industrial (though mostly domestic) I was laid off a couple off years ago and had to take the first job that came up (non-electrical unfortunately) as I have a mortgage and all the rest of it. The guy who wants to take me on is an old friend who I have worked with in the past so he knows my capabilities/limitations so I reckon this could well be an ideal way to get into a career that I was enjoying.

Thanks in advance

KFH · Apr 28, 2011

I would recomend a talk with a friendly accountant. It may cost you a few £ but may well be worth it. There are implications to being self employed and whether it is worth having a limited company as well as from HMRC viewpoint disguised employment. I long ago lost track of the implications of HMRC Subcontractor scheme for electricians but there may be issues depending on the type of work you are doing.

You need someone who is used to working with contractors, electricians and the building industry.

The best answer may not necessarily be the most obvious is my experiance.

You also need to consider how you prove income for mortgages, HP etc if you need to talk to the sharks.

Octopus · Apr 28, 2011

I'm no expert but both you and your friend need to consult accountants about this. Working for a friend and invoicing "him" will create paperwork for him and potential hassle with the tax man too for both of you!

Paul.M · Apr 28, 2011

Another thing the hmrc do is a free class for self employed people at your local office, worth calling them and signing up for it.

Ps welcome to the forum and good luck.

Tyrone Dobbs · Apr 28, 2011

Thanks for the replies. We're yet to sit down and iron out the details so I'll talk to him about accountants and tax issues over the weekend. I just wanted to get a number of opinions from other people.

Thanks again.

IQ Electrical · Apr 28, 2011

Basically, you can invoice your friend, itemising material and labour costs (I'll leave VAT for another day).

He'll have to deduct 20% from the labour element through the CIS Scheme assuming you're registered and verified.

If you're not registered and verified, he'll deduct 30% from your labour element.

topquark · Apr 28, 2011

Yourself and your friend will also need to be a little careful here. If your sole source of work is him there is a threashold where HMRC will deem that you are an employee and not a sub contractor.