PAYE to freelance?

[MartinM]

Hi all
Wondering if anyone could offer some practical advice here.
I am currently in the position where I am registered as a sole-trader with HMRC for my music tuition work and also as PAYE with the company for whom I've been working for about 10 years. Last year I reduced my hours for the company and this year further reduced them. In January, my teaching (freelance) work will be overtaking my PAYE hours and have arranged with my employer to be working for him for just 2 days a week during term times.

I am now in the position where I need to work out if I am best off invoicing my employer as a freelancer or maintaining some sort of part-time contract. Personally, I'd rather act as a freelancer as I expect my music work to increase over the next year or so and potentially my employer has said that he would welcome me to do more hours for him out of term time, if the work is there.

My main question is; How would I work out a rate of pay to aim for when negotiating this with my employer (if he agrees that I can invoice him as a freelancer, taking into account that I would not be paid sick pay, holiday pay etc and I will be paying my own NI and tax. Is there some sort of online calculator to work this all out?

Any advice is much welcome.

Cheers

[Eric Mc]

If you are planning on billing your former employer as a sole trader, you must ensure that the new relationship is markedly different to the old one. In other words, you must do everything in your power to ensure that the relationship is no longer that of an "employer/employee".

[rog007]

You'd be billing him the rate at which he can sustain and what you think your market worth is. From that income you then pay your own liabilities. Normally you'd both have some insight in to what the local market rates are and use that as your starting point. Do you know what others are charging? If not, try and find out.

Good luck!