self employed????????????

13 Nov 2006
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United Kingdom
I am hoping that the people on this site could help me with some questions I have regarding self employment. Unfortunately I am in this position not out of choice, following a year of an extremely turbulent relationship with my employer I have was shown the door last friday and am now trying to pick up the pieces and forge ahead.

Fortunately a good friend of mine whom has been asking me to go and work with him for many months now has given me work. We have agreed a weekly wage but this will be on a self employed basis. May I ask how this works because I am completely in the dark regarding self employment.

Do I have to raise an invoice for the amount he is paying me on a weekly basis for my own accounts. I no I have to pay NI contributions which I have set up on a direct debit and I have to withhold 20% of my income for tax, other than this I havent got a clue how it all works.

I am also applying to be a kitchen fitter for a well known kitchen supplier, on the application form they ask for £2,000,000 liability insurance with HEAT. I have to supply all the neccasary certificates for the Gas Safe plumber I am using and the Sparky I will be using. But I don't understand why I need liability insurance with heat, because I am not doing anything with "heat" furthermore when I spoke to the insurance company and informed them that I would need cover with heat they ask to what percentage of my cover would I need HEAT. I am confused?

Can anybody shed any light on this Heat issue and give me advice on the above.

Thank you very much indeed.
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Sounds like your friend is giving you a shafting.

Your best bet is get an accountant.
Your employer pays you a rate and you do a tax return every year.
And maybe a wad of cash and say nowt.
Then every year you get a lump sum paid back. Been doing it for years now.

As for the two numpties if they are doing hot works then let them provide the insurance.
Being se is about keeping overheads to a minimum.
Ask some self emp friends if they can reccomend you an accountant. Just say 10% max for heat
If the bulk of your work is for one customer or company, and are paid a weekly wage by them, then HMRC are likely to consider you to be employed by them.

Your employer then has responsibility for your employers NI contributions, your Health and Safety, your PAYE, your holiday pay, your sick pay, etc. etc. etc.

More info here:-
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then HMRC are likely to consider you to be employed by them

They don't.

Your employer then has responsibility for your employers NI contributions, your Health and Safety, your PAYE, your holiday pay, your sick pay, etc. etc. etc.


More info here:-

Just get a good acountant. No need to read stuff that your accountant knows inside out.
then HMRC are likely to consider you to be employed by them

They don't.

Your employer then has responsibility for your employers NI contributions, your Health and Safety, your PAYE, your holiday pay, your sick pay, etc. etc. etc.


More info here:-

Just get a good acountant. No need to read stuff that your accountant knows inside out.

So how do you explain this quote direct from the HMRC website?

"You are probably employed if you:

have to do the work yourself
work for one person at a time, who is in charge of what you do and takes on the risks of the business
can be told how, when and where you do your work
have to work a set amount of hours
are paid a regular amount according to the hours you work"

...and this one, from the same place?

If you are employed your employer is responsible for deducting and paying your tax and National Insurance contributions through the PAYE (Pay As You Earn) system. You are also entitled to certain rights and benefits, such as maternity or paternity leave, sick pay, Jobseeker's Allowance if you lose your job and a State Pension - including the additional State Pension - when you retire.
I don't know. What I posted above works for me.
I'd say my accountant is probably cooking the books.
(ie - practices that may follow the letter of the rules of standard accounting practices, but certainly deviate from the spirit of those rules)
Its quite simple, if you are working for one (or more) employer at a weekly wage you are employed, not self employed,as the quote posted by Inky Pete shows.

If HMRC enforce this is another thing entirely, though I have heard rumours that they are gradually getting tougher on it.

I think some companies try it on so they can get out of their obligations i.e sick pay, holiday pay, PPE and PLI provision and employer NI contributions (which seems to be the big one they don't like).

But, as Norcon says - speak to an accountant who deals with sole traders/ self employed if in any doubt as they will know the real deal.
Do not waste your hard earned cash paying any accountant. Good advice it is, but for the amount of money you will be earning at this early stage, you will just be throwing good money away.

If you are confident enough to phone the Revenue or HMRC, they will provide you with all the information you need. If you are worried, give a false name or summat. But trust me (I am a doctor), you do not need an accountant.

Just because you 'may' have only one source of income (you say your friend will be paying you), does not mean you can't register with HMRC as Self Employed.

The Rules may have changed (it's been over 15 yrs since I left that field), but I doubt it would have changed that much.
Basically, if the person who pays you:
- Provides you with the tools to do the job
- Decides what hours you work and
- eermmm can't remember the Third rule naw???
then you are an employee.
So, you have your own tools, you decide when to go to work or the hours you work, so, you can register as a Self Employed.

As for your Tax Returns, it's a Walk in the Park.
record all the money he pays you
keep records of all your business expenses
you have already made provision for your NI Contributions. That's good
then provide for your tax returns payment.
If you do your returns on-line, the revenue will tell you how much payment is due. try and do it ASAP (within the first few months of receiving their forms). That way you have plenty of time to make the payment as requested/generated

If you trade as a Self Employed, you 'Friend' is spared the paperwork burden and you are in more control of your destiny. Where is the DIFFICULTY????

As for PLI with HEAT, when you do noe work that involves Heat, it's a loada bulloicks. If they insist on it, then I suggest you look somewhere else.
Have faith in your abilities and don't assume that you can only get a kitchen fitting work with them
If you decide to do your own accounts you can get good training packages all the time for cheaper from the likes of groupon and other discount sites.

Example, today in ABERDEEN groupon it has a quickbooks and a sage package.
Of course you could keep manual records all the same.
Even better than being self employed is setting up a Ltd company and punting your services through that. Bit more paperwork involved and a bit more hassle but there are definite advantages when it comes to how much you can stick in your back pocket. Put yourself on your own books, pay yourself just enough PAYE to get your stamp and keep off the taxman's radar, and give yourself the rest of your hard earned wedge in dividends.

You also get limited liability so they cannot take your house if you really stuff up. But that's why you have insurance.

You are more likely to need an accountant so you need to factor his costs into your budget. They will tell you that they'll save more money that they cost, which might be true, or might not be. At the end of the day it's an expense and as you own the company that means less beer and curry money for you at the end of the year.
You have too appoint a director to do that and register with companies house.
Can your wife or partner be the director?
Thank you for all of your replies I am still at a loss with all of this and its causing ridiculous amounts of stress. I registered SE with HMRC on Monday just gone, on this day I was fitting a kitchen for a contractor which took only two days, said contractor is very keen to pay me, but wants my UTR number "which I don't have" tried to get through to HMRC all week including now and have been on hold for 35 mins.

Its doing my head in, I need to be paid from said contractor because money is tight at the moment but I cant be paid cos HMRC wont give me UTR number over the phone and it could be a couple of weeks before I get it, "bl**dy ridiculous". The contractor has said that I can raise an invoice for supply of "none exexistentbathroom cabinet to get my money, but then I have no paperwork to show I have bought the none existent bathroom cabinet?

Now my mate has decided that I need to invoice him for supply of none existent joinery products supplied to get my day rate, purely because he doesn't want the agroagroregistering with the CIS and stopping my money and at source. But again I am invoicing with no paper trail of none existent products.

Its really winding me up, oh I am trying to get hold of an accountant.

Thanks again.
Just go PAYE. It doubles your pension.
SE is a waste of time unless you can make big bucks like a grand a week.
Incentivise the sales invoice for non existant units - then have a couple of days break in Eire . You`ll be liable for Euro Tax @ less than UK rates - if you get my drift ;) ;) ;)
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