Quitting My Job To Work For My Father

[Sea Demon]

Hi - the chance has come up for me to leave my job (IT) in London which I've wanted to do for the last few years so I can work full time with my father who has his own roofing/building business. I need to find out how I go about paying my tax/NI - does anyone know what I or my father would have to do or what would be the best way of going about it?

I'd be working with him full time but also getting my own work once I was confident in doing the work myself & learnt the trade a bit more. I've been working on and off with him since I was strong to carry a brick/roof tile so I do have a fair bit of experience of it already - its not something completely new.

Thanks

[Engineer1]

I suspect you would be an employee of your father, at least initially assuming you would only be working for your father.

[ewenm]

Does your father work as a sole trader or as a limited company or something else?

I'd imagine you either become an employee of his company or set up yourself as a sole trader/run your own limited company and sub-contract to your father.

Edited by ewenm on Monday 5th April 13:17

[Ollyc]

HI there,
to be honest (I am a soul trader) I'd become self employed and invoice your father for the work you carry out yourself. I.e if you do 20hrs with him on a week at £10ph you invoice him for £200 (not teaching you to suck eggs at math)of that £200 set up an tracker savings account this will be your TAX man account, out of every invoice that you get money in remove the ammount of tax from that lump sum and put it in the tracker that way your gaining interest on the tax that you have to pay per year. it also means that you have already taken the tax out of your float money and the rest (post tax) can either be taken as personal drawings or a percentage to the business (maintenence of tools, insurance, van, rainy day money etc) This sytem is very valuble in your first few years as finding a lump sum to pay the tax man hurts and can fold a fledgling business. Having at hand earning a small interest is much better as it's already done and dusted.


If I have explained this correctly great if not PM me and I'll be happy to give any other help.

As for NI its a very straight forward task you inform the Inland revenue of your change to Self employed status and they will issue the relevant info for your NI contributions these are either paid into a Post Office over the counter or you can set up a DD the amount for NI is always the same, Unless you secure a fantastic deal Business bank accounts cost money. you will normally find a charge free for 1 yr account then EVERY transaction is costed and you get a bill every 1, 3 or 4 months telling you the amount of money you have been charged for paying them money, So I'd advise setting up a seperate instant access cheque and card account and on that account specify a name for the relevant card, bobs building fund for instance. The bank is doing nothing else all you are doing is not having the access to a massive and massive headache overdraft. The over drafts are charged for as well and thats just for admin. Dont get sucked in to the borrowing money aspect of business accounts they Will floor and fold a new business and as a sole trader you are 100% tied to it. So aim for a 1 to 2 yr personal account and if you need it for VAT etc then move onto a business account. As you will be mainly doing things through your old man he will/should be VAT registered buy via hi pay him or factor it into your invoice for works completed. VAT is a bit of a pain in the initial part of going from employed to book keeper.

I hope this helps and I hope I have not bored you to tears.

Regards

Olly


www.dragonshiatsu.co.uk

[mrmr96]

Ollyc said:

I am a soul trader

Like The Devil? Or a Sole Trader - like a fisherman who works for himself?

[Ollyc]

Soul like the Devil. Then sole later as in fish. Depends on my mood really

[Tuscanless Ali]

You cannot decide whether you will be self employed or employed, it will be dictated by circumstances.

If you will be providing quotes to your father for the required work, supplying your own tools, sending someone else to do your job (If you wanted to), and generally not answering to your father then you will be deemed as self employed and will have to register as a sub-contractor and have 20% tax stopped at source and fill in a self assessment at the end of the year.

If your father will be dictating the hours you work, telling you what to do, paying you sick and holiday pay and providing the tools, then you will be seen as an employee and will have tax and NI deducted from your salary.

There is loads more involved, but I am guessing you would be classed as an employee.

[RW774]

If you do wish to borrow money for ther banks, for goodness sake don`t give personal security. They will definetly close any business should you fall into difficulties and will give you 2 weeks to pay it back, now at 27%interest.The crap you read these days about banks helping businesses is utter utter rubbish.The treasury are forcing their hand to close many business.Labour are st. Why the fk do we need the likes of Mandelson as our enterprise minster?. He is the one who got a bent mortage through Geoffrey Robinson, remember??
I intended to borrow for expansion of the business. Not serious money, £50k.Because my accountant gave me a % of income as a directors loan ( for tax purposes), they do not class this as income, the bds. If you own more than 20% of the shares in your own company you are offically classed as "self employed" as far as the banks are concerned.That means you have to produce 3 years of accounts. That includes the likes of Richard Branson, Alan Sugar etc etc . All classed "self employed" despite their companies being and entity and we, are employed by said companies as employees.Not so, thanks to the treasury. So if a good accountant saves you tax and lowers your profit then you are fked for borrowing money. Rest assured, try it.
"Banks,give you an umbrella when the sun shines and take it away when it rains."
Oscar Wilde