Self Employment

[LostInSpace]

I was looking a bit of advice if anyone knows anything about this I would be greatful!

I am currently self employed, have been as 2 years.  I have one main job as past 2 years where I work to a man during the week, he has his own company , I do other work by myself at the weekends/evenings and get paid from these jobs. I declare most of these payments and so therefore I pay tax on these.  The man I work for during the week pays my tax from that job, i pay my National Insurance myself.  He currently has no other employed workers, the other 2 are both self employed workers also.

He has recently said to me that I am going to have to go on the cards with him, i.e be employed by him and no longer self employed.  He has said that because he is paying me consistently the same money and I am self employed that he can get fined for the amount I am saving in tax and NIC by being self employed.  I was wondering is this true? If i go on the cards with him I will receive quite a considerable amount less than I am now, its about 300 a month of a difference. 

Any advice on what to do here would be appreciated! Thanks in advance!

[AQMP]

I take it you're in the North?  If so, yer man might be right.  If you are "self employed" but only have one customer, the Revenue usually takes the view that you are "employed" by him/her.  Also I note you say he has been paying your tax for the job.  Usually a self employed person is responsible for their own tax affairs so this may strengthen the Revenue's case that you are in fact employed by him.

[Rois]

If it's £300 of a difference for the job that you're currently doing for him, then that's a heck of a lot of "expenses" that you're claiming as allowable on the tax return!  If you provide all your own materials/tools/vehicles etc then you may have a case to continue self-employment, but if you're using his then it looks more and more likely that you're an employee.  It is a test of "contract for services" (ie he is paying just for a certain service that you provide) or "contract of service", ie an employment-type arrangement.  Do you bill him for the work you do? 

Don't understand how he can pay over your tax yet not employ you and not pay any employers' NIC?  Perhaps more detail here.

Also, in 2013 the UK PAYE regime is changing and becoming a lot more stringent (weekly returns, penalties and interest if they're wrong/late etc), which will also mean additional focus on this sector so no wonder he's getting a bit anxious.  HMRC will be all over this area next year.

[The Iceman]

There's no way this guy is paying your tax.
Ask him how he has been paying your tax if you are not a registered employee.

If as I suspect he hasn't been paying your tax and these are declared earnings, you could be in bother.

[Bingo]

Rather than paying your tax, I suspect he is withholding tax as a payment to a subcontractor which is then credited to your tax registration in lieu of liabilities owed to them?

If it in the south, the RCT (Sub-contractors tax) has undergone a makeover since 01/01/2012 and the onus in on the principal contractor to make more information known to the revenue - ie they have to inform them online prior to any contractor been engaged and then again when any payment is been made to the subbie. Perhaps he has been advised that you would be classed as employee rather than a subbie and doesn't want to go down that line.

[The Iceman]

RCT is in the South (is it in the North?) or an equivalent? Also I thought it was only for Construction. LostInSpace what kind of contractor are you?

[the waffler]

easy way round it as i used to work to the same guy for years get him to get the clients pay you direct or get payed every month you are allowed 12 tax receipts from the same guy in a tax year its not that hard to sort what do you work at

[ziggy90]

There's no way this guy is paying your tax.
Ask him how he has been paying your tax if you are not a registered employee.

If as I suspect he hasn't been paying your tax and these are declared earnings, you could be in bother.

How do you know his tax hasn't been paid? I've worked for plenty of subbies under this system & i've yet to be "done". As the Waffler says there's plenty of ways around this, he also mentioned that he worked for the same man & didn't say that he had any problems.

[LostInSpace]

I work in construction! Everyone I know who are tradesmen all work as "self employed" and they all work for the one employer usually while doing work at weekends and evenings. Thanks for all the replies lads!

[Massey-135]

Could do with a bit of advice here. As yous know tax returns for the year April 2010 - 31st March 2011 are due on Tuesday. During that tax year I spent a right bit of it registered as self employed, but I wasn't always working. I signed off the self employment register and became full time with a company at some point in that year, think it was towards the end. Anyway, I was thinking I am surely due to fill in a tax return for whatever period I was self employed, but HMRC haven't sent me any letters asking me to do a tax return. The previous year they did. Should I just leave it and take the chance, or should I ring them up and explain the situation? That might only create bother for myself though? I don't think I even earned enough during my period of self employment in that tax year to owe them anything anyway. And how can I log on and file a return if i no longer have any username/password etc?

[lawnseed]

I work in construction! Everyone I know who are tradesmen all work as "self employed" and they all work for the one employer usually while doing work at weekends and evenings. Thanks for all the replies lads!

you need to get the customer to make two cheques one for your man and a separate one for you ie your share

[Massey-135]

Could do with a bit of advice here. As yous know tax returns for the year April 2010 - 31st March 2011 are due on Tuesday. During that tax year I spent a right bit of it registered as self employed, but I wasn't always working. I signed off the self employment register and became full time with a company at some point in that year, think it was towards the end. Anyway, I was thinking I am surely due to fill in a tax return for whatever period I was self employed, but HMRC haven't sent me any letters asking me to do a tax return. The previous year they did. Should I just leave it and take the chance, or should I ring them up and explain the situation? That might only create bother for myself though? I don't think I even earned enough during my period of self employment in that tax year to owe them anything anyway. And how can I log on and file a return if i no longer have any username/password etc?

To be blunt Massey your dates make no sense.
(1) Tax Returns for YE 5 April 2011 are due on Tuesday (actually Thursday as HMRC are on strike on Tuesday)
(2) If you were self-employed during that year than you do have a Self Assessment tax return to complete, whether or not you were sent one or not
(3) However there will be no late penalty as you have not been issued with one
(4) There is no such thing as a self employment register - you notify HMRC on your final SA return that you are no longer self-employed. I know you may have phoned them to say the same but if you admitted to them that you were self-employed at any point during that tax year an SA should have been issued.
(5) The line at the end about owing them anything - could well be true but if you were employed during that year your Personal Allowance will have been swallowed up in the employment and all profits from self-employment will probably be taxable & Class 4 NIC due. If there was a loss on Self Employment then this can be set-off against your Employment Income and a potential tax repayment could arise.

Either way, a phone call to them on Monday morning would do no harm.

how do my dates not make sense? Last year when I had to file a return I just got a fella I know who works in accounting to file a blank return. But to do that I had to logon to the website etc. I haven't the details to do that any more. Is that correct about the strike meaning I have til Thursday to get it sorted? I think I could get into the office in Belfast on Wednesday afternoon.
You sure there's definitely no such thing as a self employed register? I definitely had to go online and register as self employed.

[under the bar]

red diesel. the only job..........

[TacadoirArdMhacha]

Could do with a bit of advice here. As yous know tax returns for the year April 2010 - 31st March 2011 are due on Tuesday. During that tax year I spent a right bit of it registered as self employed, but I wasn't always working. I signed off the self employment register and became full time with a company at some point in that year, think it was towards the end. Anyway, I was thinking I am surely due to fill in a tax return for whatever period I was self employed, but HMRC haven't sent me any letters asking me to do a tax return. The previous year they did. Should I just leave it and take the chance, or should I ring them up and explain the situation? That might only create bother for myself though? I don't think I even earned enough during my period of self employment in that tax year to owe them anything anyway. And how can I log on and file a return if i no longer have any username/password etc?

To be blunt Massey your dates make no sense.
(1) Tax Returns for YE 5 April 2011 are due on Tuesday (actually Thursday as HMRC are on strike on Tuesday)
(2) If you were self-employed during that year than you do have a Self Assessment tax return to complete, whether or not you were sent one or not
(3) However there will be no late penalty as you have not been issued with one
(4) There is no such thing as a self employment register - you notify HMRC on your final SA return that you are no longer self-employed. I know you may have phoned them to say the same but if you admitted to them that you were self-employed at any point during that tax year an SA should have been issued.
(5) The line at the end about owing them anything - could well be true but if you were employed during that year your Personal Allowance will have been swallowed up in the employment and all profits from self-employment will probably be taxable & Class 4 NIC due. If there was a loss on Self Employment then this can be set-off against your Employment Income and a potential tax repayment could arise.

Either way, a phone call to them on Monday morning would do no harm.

how do my dates not make sense? Last year when I had to file a return I just got a fella I know who works in accounting to file a blank return. But to do that I had to logon to the website etc. I haven't the details to do that any more. Is that correct about the strike meaning I have til Thursday to get it sorted? I think I could get into the office in Belfast on Wednesday afternoon.
You sure there's definitely no such thing as a self employed register? I definitely had to go online and register as self employed.

Don't think the details change.

[thejuice]

I'm looking at the possibility of registering as a self employed architecture consultant.  A friend of mine is starting his own business and needs staff but can't offer full time contracts so is hiring consultants on temporary contracts. I'm in England.

Anyone have a general figure of taxes I need to pay.