self employment issues

[jamie s]

i am currently half way thru my 3rd year into retraining as an electrician and have been offered a job as an electricians mate. the catch for me is that its a self-employed! i have never worked anything other than employed in my current trade so i am a bit daunted by the prospect of being a bit disposable or not having the security of a permanent contract. if anybody has been in the same position or has any advice on tax, insurance or job security issues i would be very greatfull

 

[telectrix]

as self employed you will be working sub-contract for your employer. used to be CIS4, wher he deducted 18% of your earnings for tax. all changed now. you really need to have a word with your locAL hmrc office. on top of that you will have to pay your own ni stamp about £2.50 a week. as for job security, what,s that?

 

[tonys]

Jamie

I'm in my 40s mate and been self employed since I was 21/22, being on the cards gives no more security in this day and age, than it did back then. Set up a limited company and a business bank account, that way you can keep well away from NI contributions and pay corporation Tax. If you want the details of a genuine accountant I can pm you the details of the website.

 

[lennox]

i am in the same situation

how do you set up a limited company and whats corporation tax?by stay away from NI contributions do you mean not pay any?

 

[tonys]

Hard to explain over a forum but not a complicated set up. Its not just a small weekly NI contribution a self employed person pays, there another upper or lower limit one which can amount to a few quid.

Basically your a director of your own company and the company pays the tax not you, look for an accountant who offers free advice, well worth it.

 

[tlangdon12]

Jamie

I'm in my 40s mate and been self employed since I was 21/22, being on the cards gives no more security in this day and age, than it did back then.

Tonys right, permanent employment is no guarantee of job security. I realised this ten years ago (different industry, but the principle's the same) - your job security comes from what you know and who you know, not who employs you.

Self employment is a big step, especially if going down the Ltd. company route (lots more paperwork), but job security shouldn't be a concern.

Good Luck

 

[SirKit Breaker]

i am in the same situation

how do you set up a limited company and whats corporation tax?by stay away from NI contributions do you mean not pay any?

Take some professional advice BEFORE you set up as a limited company. You will be far better off as a Sole Trader, it is too long winded to explain the reasons why on here, contact HMRC first and get their advice, and any local small business body, we have businesslink/yorkshire up here.

Cheers.......Howard

 

[Qedelec]

Went self employed a few years back now and wish I had done so earlier. if you have ever thought 'I'm worth more than this' and have been praised by customers, then tou will have no problem making a success of business. YOU are the magic in your business.
When you are employed you will rarely if ever be appreciated for your efforts, for fear of having to pay you more.
Remember in the past the only people who didn't run their own business were slaves.

 

[tonys]

Take some professional advice BEFORE you set up as a limited company. You will be far better off as a Sole Trader, it is too long winded to explain the reasons why on here, contact HMRC first and get their advice, and any local small business body, we have businesslink/yorkshire up here.

Cheers.......Howard

That's a matter of opinion and I disagree with you. I've been down both routes over the years and I can honestly say financially Ive always been a lot better of working through a limited company.

My accountant is fully qualified and competent and his fees are about £100 more for carrying all the works involved for being limited than a sole trader.

You only have look at NI contributions saved to see how big the financial advantage is.

Have a look at this link, its nothing to do with me, and not my accountant either, I use one up north, its just an eye opener

Accountants in Bournemouth : Express Accountancy Ltd

 

[Des 56]

If the self employment is for one person only,there is a criteria they use that may prevent this
I am not sure exactly but it goes somewhere along these lines

You have to tender for the work,you are not on a fixed price,you supply materials,tools equipment and so on
To be self employed you have to meet a criteria using some or one of the above, or they can deem you as having been employed
I think this was introduced to stop employers scamming their share of the NI that they pay for each employee

Also any hourly rate must reflect the hidden costs of that self employment

You have to pay regular NI contributions and an 8% NI tax on your end of year profit,so any hourly rate should be at least half as much on top of the employees rate

You will probably need to get a cis card from the revenue or the contractor will have to deduct 25 % of your pay as tax
Its only about 20% if you have the tax card

 

[LukeD]

sole trader

nothing else will suit you so early on in life. Its a lot easier .

And dont go near Barclays

 

[jamie s]

thanx for your help and advice all still a bit confusing thou but I guess that's all part of the learning process. I am speaking to my possible employer on Monday so I now have a more definite idea of issues to raise about work, insurance and pay when discussing employment possibilities. I do have an ECS card which I am hoping will make me more attractive as an employee despite my lack of experience.

 

[Des 56]

I do have an ECS card which I am hoping will make me more attractive as an employee .

I hope you are not refering to my post about a CIS card
Just in case,this is the construction industry card, off the inland revenue, for self employed people who are sub contracting

 

[SirKit Breaker]

That's a matter of opinion and I disagree with you. I've been down both routes over the years and I can honestly say financially Ive always been a lot better of working through a limited company.

My accountant is fully qualified and competent and his fees are about £100 more for carrying all the works involved for being limited than a sole trader.

You only have look at NI contributions saved to see how big the financial advantage is.

Have a look at this link, its nothing to do with me, and not my accountant either, I use one up north, its just an eye opener

Accountants in Bournemouth : Express Accountancy Ltd

Fair comment Tony, at least the OP has the benefit of a strong feeling for both routes.

Cheers........Howard

 

[tonys]

Thanks Howard

Glad you never took it in the wrong context, I just want the youngsters coming through to get maximum money in their pocket.