Need help deciding whther to go self-employed

[Validis]

Hey guys, I finally got my foot in the door and got my first job working on site, after a year of finishing my level 3 city and guilds.

I am working through an agency, and before I took the job just over a month ago, they said they can pay me £8.50 an hour on a self employed basis. I told them that i wasn't registered and they said they can then pay £6.50 per hour PAYE.

The company I'm working for seem pretty happy with me, and said the job lasts untill christmas, and that I will probably be there up untill then. The agency have also rang the company a few days ago to ask whether they needed me for the next few weeks, as they want to put me on another job. The company refused and said they wanted me to stay working on the current site. So, it seems to be looking quite well for me.

My problem is, I am curious on registering as self employed (the agency said as soon as i am, the pay will go back upto £8.50 per hour). The only thing is, I'm not too clued up about going self employed. I've spent a few hours on the HMRC website, trying to find out as much as I can, but still can't make much sense of it!

Keeping records of income and expenditure wouldnt be a problem for me. Am I right in thinking that if I were self employed, then I pay £2.50 per week for National Insurance, and then pay a lump sum each year for Tax?

If I became self employed, will I be better off financially? Or will the lump sum of tax that i pay each year just make it equivilent to working PAYE?

If anyone has some better websites that have infomation on becoming self employed, then I'd be very grateful! Thanks for your time!

 

[Octopus]

You pay £2.50 per week NI and then a further 8% based on your profit. Can't remember off hand what the numbers are but think the 8% kicks in once you've made about £7K

 

[IQ Electrical]

Everything depends on your declared net profit as a sole trader.

You'll be looking for a new accountant if you aren't better off than PAYE.

 

[telectrix]

the agency is taking the ****. £6.50 an hour is just above min. wage. even a mate's rate, agency wise is £8.50+ on the books.

 

[rmc86uk]

Just set up self employed under CIS then all the work you do in future the agency/payroll company will deduct the 20% for you and pay it to hmrc. You will then set up the 2.50 a week by paying quarterly (think they've changed how you pay it now). I don't know what this 8% thing is but maybe that's just for sole traders!

All you have to do is keep your wage slips/invoices and file your tax return every year!

Sent from my HTC Desire using Tapatalk

 

[morph]

£6.5 PH .........DISGRACE
£8.5 PH.........Disgrace

S/E more hassle but you can claim back cost of handtools and fuel and PPE, at those wages the hassle is probably not worth it
Mc d's and tesco pay morons more than that !

 

[spraymate1]

I know times are hard, £6.50 for a mate, **** me, Personal opinion, go on CIS, just be aware that you will pay 30% tax for the first few weeks, until you get you UTR number sent through. And make sure you get the CIS statements off the employer, to prove that you have paid tax, at year end. Its a legal requirement that your employer gives you a paper copy.

 

[Validis]

Thanks for the replies. I know the wage is rubbish, but as this is my first job as an electrician's mate, im not TOO bothered about it! However, what is starting to bother me is how i do much more work then those working for the actual company directly, and them being paid £10.00 per hour! Ouch!

Can somebody help me in how to go self employed?
I tried registering for the CIS, but it says that i need my UTR number, so,

I use the HMRC website, and click the link for registering to become self employed, and that leads me to a page that says "click here to register for self assesment".

It then gives me a 2-page form for me to fill out (Sa1), but the form seems more like a tax return form, with questions like "why do you need to complete a tax return?".

I wish the website was a bit more clearer!

 

[spraymate1]

To be honest mate your better ringing them up. First you have to register going self employed, make sure you tell them you want to go CIS, then they will give you a number to ring the CIS helpline, who will then sort out your UTR number. As I said earlier you may have to pay 30% until you get it sorted, it can take a few weeks, but you will get it back.

 

[geoffa]

i'm probably wrong on this but i thought that if you worked on a regular basis for an organisation (don't remember what the duration is) that you couldn't be self employed and the organisation you worked for had to employ you directly.
the reason being that technically you would be employed but claiming all the tax breaks of a truly self employed person, which the government are obviously keen to prevent.

 

[spraymate1]

Thats right geoffa, that why the employers have the " we will have to lay you off for a week, until the new contracts starts", or as I used to call it the "Get out of jail free card"

 

[Validis]

I'm not sure, geoffa. At the moment I'm down as working for the agency. They advertised the job as Self Employed, but when i told them I wasnt, they said they would pay me PAYE instead. I thought if i were being paid PAYE then I would get holiday entitlement and paid for bank holidays, but apparently I dont. Thats another reason I would like to go Self Employed and work for several agencies or so over the next few years.

 

[geoffa]

again, i may be wrong but i thought the government changed this so that work agencies had to give mandatory holiday entitlement as technically a worker such as your self validis, is employed by the work agency.

 

[SirKit Breaker]

If you are Self employed, then you can claim your costs for getting to and from work and a whole host of other things. The HMRC website isn't much help, but you must register with them as someone else has said and get CIS registered and a UTR (Unique Tax Reference) number.

An accountant will be the best place to seek advice on what you can and can't claim for, and to advise on the best way to claim things like vehicle running cost, capital expenses (for tools and test kit etc).

You will pay tax at the basic rate or the higher rate depending on your declared income, for all net income over your personal allowance, which is about £7000 a year. You will pay £31.60 per quarter N.I, and at the end of the year you will also pay 8% of your net income as well.

I pay an awful lot less tax being Self Employed than i did when i was employed.

Cheers.........Howard

 

[geoffa]

click the link below Validis. it takes you to the Directgov website detailing agency worker employment rights.
ttp://tinyurl.com/6e7bo9j

an extract:
Workers' employment rights

All workers, including agency workers, are entitled to the following rights:

• paid holiday
• rest breaks and limits on working time
• no unlawful deductions from wages
• the National Minimum Wage
• not to be discriminated against under any of the equality legislation
• protection under health and safety laws