Self Employed-Employed.

I am sole trader and worked for myself for a number of years now. Just been offered a three month contract on the books, with possible permanent contract.
I will be committed to this contract, but do also have other customers of mine to complete/undertake work for and still want my business to keep ticking away for at least the three month period, then take it from there.

So is there anyone that is or has been in a similar situation that could offer words of advise?
I do realise that it could mean 3 months without a lot of time for myself but that is something that I will need to deal with.

I would appreciate advise on tax codes and dealing with NI.
I assume my employers will need to contact HMRC for the tax code, as I cannot produce a p45 or up to date tax payments (other than last years assessment statement).

Any info much appreciated.

By on the books, I assume you mean PAYE, so you will become an employee and the company will be responsible for deducting tax and NI?

From my past experience (and I am by no means an expert) your employer (albeit temporary) will have to deduct tax at basic rate, as you have no way of demonstrating to HMRC what you total income for the tax year will be, taking into account your self-employed earnings.

In my view it would be far simpler for you to work on contract to the company for the 3 month period, thus retaining your self-employed status and you remain responsible for your own tax and NI. This gives you much better control and is simpler to administer. Could you not propose this to the company? It would also save them a great deal of admin overhead in putting you on the books for just 3 months, assuming it may not last any longer. It would just need a contract setting up to commit you to them for the 3 month period. Perhaps they are frightened that you may continue with your own work as well during this period - would this put you in direct competition with their business?

Thank you for the reply, yes by on the books I mean PAYE.
With regards to having a three month contract this has been dealt with by an agency, so becomes a little more complicated. So as much as I would like to arrange the three month tax/NI being part of my self assessment I don't think it would be an option.

There is no worries about competing for each others work, so no conflict of interests, as all properties are owned by the company maintaining them.

Not complicated at all just work for the new people, and when you fill in your SE next year there is a part that asks for earnings from other employment (words to that effect)
HMRC will know how much tax/NI you've already paid.

You may even pay less tax depending on whatever allowable expenses you claim

The key word is "agency". The Revenue changed the rules last year (2014) meaning that almost all agencies now issue contracts which are paid through an umberella company. Whilst this means that you are entitled to claim for some expenses (not sure of the amount, but somewhere around 20 to 25% of your gross income), there are limitations and you will probably have to pay the employers NI contribution (around 13.6% above the threshold - note that this is also chargeable on travel expenses, etc) as well as the employee's NI, as well as the umbrella company fee (generally £20 to £30 per week) and they may also deduct up to £10 a week from you for insurances. So check carefully wjat you'll actually be getting paid, otherwise you may be in for a nasty shock

It would be interesting to know how PBD got on. Given that it was a year ago

FiremanT said:

It would be interesting to know how PBD got on. Given that it was a year ago

Click to expand...

Since April 2014 the rules have changed quite dramatically - to the financial detriment of most agency and sub-contract staff - and when you take into consideration that an ever increasing number of employers will only take on subbies via an agency or umbrella company you may see my point in posting a response. especially given the latency of Internet responses