Short term Layoff and contract work?

[Easty-5]

In a bit of a precarious situation. The week before Xmas my employer decided to tell me that I'll be placed on short-term layoff without pay (it is in my contract - unfortunately). No definition can be given on "short-term". Realistically it will be a minimum of 3/4months with a very real potential of it being permanent. Anyway, I won't go into the finer details but I am looking to pick up some contact work (O&G industry is it makes a difference) whilst I am laid off. I am staff and PAYE with my current employers but how do I go about getting paid by agencies if I am able to pick up some contract work? Can/do/will they pay me PAYE as well or do I need to set up a Ltd Company? I'm also not too sure of the tax implications. I assume any contract work will be classed as a second job and taxed full whack from the get go even though I am not being paid an income by my primary employer?

[creampuff]

Your chance of finding oil and gas work now is almost zero. Not quite zero, but almost.

I'd start applying for everything you are remotely qualified for. "Short term" in your case may well be when the oil price improves, which could be a long long time.

[Easty-5]

creampuff said:

Your chance of finding oil and gas work now is almost zero. Not quite zero, but almost.

I'd start applying for everything you are remotely qualified for. "Short term" in your case may well be when the oil price improves, which could be a long long time.

I don't mean to be rude, and appreciate you taking the time to respond, but please read my OP properly. I am not asking whether or not I'll be able to find work. I am asking how agencies work with regards to payment and what the tax implications for me will be given the situation outlined in my OP.

[Countdown]

Easty-5 said:

I don't mean to be rude, and appreciate you taking the time to respond, but please read my OP properly. I am not asking whether or not I'll be able to find work. I am asking how agencies work with regards to payment and what the tax implications for me will be given the situation outlined in my OP.

In my field (finance) you can do both; you can either be employed by the agency, go onto their payroll, and be treated like a normal (zero hours contract) employee OR you could go the self employed /Ltd Co route where you invoice them.

Re: tax - if you become their employee you will need to fill in a P46 - the amount of tax you pay will depend on which box you tick but it will probably be BR.. If you go down the self employed route the amount of tax you pay depends on the profits you make for the year.

[Easty-5]

Countdown said:

In my field (finance) you can do both; you can either be employed by the agency, go onto their payroll, and be treated like a normal (zero hours contract) employee OR you could go the self employed /Ltd Co route where you invoice them.

Re: tax - if you become their employee you will need to fill in a P46 - the amount of tax you pay will depend on which box you tick but it will probably be BR.. If you go down the self employed route the amount of tax you pay depends on the profits you make for the year.

Thanks for your response. I appreciate it.

Can you be self employed/Ltd company at the same time as holding a staff position (albeit being on lay-off) with another company? I potentially have a few short term contracts lined up (couple of weeks at a time) and for sake of ease would rather go down the PAYE route, although paying tax from the first £1 earned is a bit of a bummer considering I am not making a penny from my primary job. Just trying to figure out if there is an easy way around this.

[CubanPete]

I have a second job (summer weekend pocket money!), I am paid PAYE with 0 tax allowance.

You can claim any overpaid tax back in April.

[Countdown]

Easty-5 said:

Thanks for your response. I appreciate it.

Can you be self employed/Ltd company at the same time as holding a staff position (albeit being on lay-off) with another company?

Yes. In theory you can have umpteen PAYE jobs and be Director of umpteen Ltd Companies, as well as being self employed

Easty-5 said:

I potentially have a few short term contracts lined up (couple of weeks at a time) and for sake of ease would rather go down the PAYE route, although paying tax from the first £1 earned is a bit of a bummer considering I am not making a penny from my primary job. Just trying to figure out if there is an easy way around this.

When you say you "have a few short term contracts lined up" its unlikely that the Companies will want to take you on as PAYE (it's a bit of a PITA for them to take you on as an employee for only 2 weeks). I'm also assuming that you've found these roles directly and not via an Agency, in which case I think you will HAVE to register as self employed (or set up a LtdCo) because the option of being on the payroll of an Agency isnt open to you.

Hope that makes sense.

[Easty-5]

Countdown said:

When you say you "have a few short term contracts lined up" its unlikely that the Companies will want to take you on as PAYE (it's a bit of a PITA for them to take you on as an employee for only 2 weeks). I'm also assuming that you've found these roles directly and not via an Agency, in which case I think you will HAVE to register as self employed (or set up a LtdCo) because the option of being on the payroll of an Agency isnt open to you.

Hope that makes sense.

Thanks again for your response. In reply; these roles are/will be through an agency, not direct.

[T5R+]

OP. If it were me - would find an accountant and take their advice after seeking the views of the "respected posters" here plus allow them to undertake the tax return next year. It may cost £100-200 which may feel a burden at this time but a competent accountant more than pays for themself.

[worsy]

Easty-5 said:

Countdown said:

In my field (finance) you can do both; you can either be employed by the agency, go onto their payroll, and be treated like a normal (zero hours contract) employee OR you could go the self employed /Ltd Co route where you invoice them.

Re: tax - if you become their employee you will need to fill in a P46 - the amount of tax you pay will depend on which box you tick but it will probably be BR.. If you go down the self employed route the amount of tax you pay depends on the profits you make for the year.

Thanks for your response. I appreciate it.

Can you be self employed/Ltd company at the same time as holding a staff position (albeit being on lay-off) with another company? I potentially have a few short term contracts lined up (couple of weeks at a time) and for sake of ease would rather go down the PAYE route, although paying tax from the first £1 earned is a bit of a bummer considering I am not making a penny from my primary job. Just trying to figure out if there is an easy way around this.

Are you normally not resident? Because moving back to blighty might mean paying tax on offshore income.

As to your question, you might need to check contract of employment to ensure your employer will allow it.

Edited to add

Sorry, read as "although paying tax from the first £1 earned is a bit of a bummer considering I am not makingpaying a penny from my primary job"

Edited by worsy on Wednesday 13th January 12:40

[rsbmw]

Umbrella company may be your best (easiest) bet short term - I've used http://www.contractorumbrella.com/ before and they were good. If you become a 'permanent' contractor then look into your own Ltd.

[Easty-5]

Thanks for all the replies. I'll look into the umbrella company option - that may be the best, short term option. To answer some of the other questions; I am a UK resident and my primary employer is encouraging me to pick up some contract work. They are hoping I will find alternative employment and leave off my own back meaning they won't have to pay any redundancy money.

[worsy]

Easty-5 said:

Thanks for all the replies. I'll look into the umbrella company option - that may be the best, short term option. To answer some of the other questions; I am a UK resident and my primary employer is encouraging me to pick up some contract work. They are hoping I will find alternative employment and leave off my own back meaning they won't have to pay any redundancy money.

Why would you? The only thing you need to be careful with is notice periods. If your employer needs you back what notice will they give you?

[NerveAgent]

Easty-5 said:

Thanks for all the replies. I'll look into the umbrella company option - that may be the best, short term option. To answer some of the other questions; I am a UK resident and my primary employer is encouraging me to pick up some contract work. They are hoping I will find alternative employment and leave off my own back meaning they won't have to pay any redundancy money.

I would definitely go down the umbrella route. In my experience it was easy to set up, the agency and the umbrella companies often have everything worked out in terms of payment between themselves and you will just be paid PAYE weekly/monthly. You might be out of pocket a little (short term) in terms of tax, but this can be claimed back eventually.

If you decide to stick to contract work, set up a ltd company sooner rather than later.

[Easty-5]

worsy said:

Why would you? The only thing you need to be careful with is notice periods. If your employer needs you back what notice will they give you?

Because I'm not being paid a penny at the moment. So I need to find a source of income. With regards to notice periods, my company doesn't need to give me any notice for when they need me back. I must be available for work. However, I am allowed to pick up contract work but it has to be given the OK by my company. Short-term layoff is completely in the employers favour.

[creampuff]

Easty-5 said:

I don't mean to be rude, and appreciate you taking the time to respond, but please read my OP properly. I am not asking whether or not I'll be able to find work. I am asking how agencies work with regards to payment and what the tax implications for me will be given the situation outlined in my OP.

It doesn't matter what is in your OP, because you are almost certainly not going to get oil and gas work so you are looking for an answer to a question which may never arise. Yes, I know finding oil and gas work would solve your short term financial needs, but it is not going to happen and the sooner you come to that realisation yourself, the better financial position you are going to be in.

There are people I know in oil and gas who have never been unemployed in the last 20 years, and now they are driving vans to pay bills. You will not get oil and gas work unless you are both very, very, very, very lucky and prepared to accept a rate/salary reduction of maybe 60-70%. Not 60-70% of your old income, a 60-70% reduction.

The best thing you could do is try to find any job, staff or contract and take it. There is a reluctance on employers in non-energy related industries to take people from oil and gas because they aren't stupid and they know oil and gas pays a lot and the worker will jack and go back to oil and gas as soon as they can. You are facing an uphill battle. Even if a permanent job came up, I'd take it. If the opportunity arises to return to your old job, just don't turn up to the new one instead of waiting out your 1-month notice. It is unlikely they will do anything. But you may have to write off your last pay check.

[Easty-5]

creampuff said:

It doesn't matter what is in your OP, because you are almost certainly not going to get oil and gas work so you are looking for an answer to a question which may never arise. Yes, I know finding oil and gas work would solve your short term financial needs, but it is not going to happen and the sooner you come to that realisation yourself, the better financial position you are going to be in.

There are people I know in oil and gas who have never been unemployed in the last 20 years, and now they are driving vans to pay bills. You will not get oil and gas work unless you are both very, very, very, very lucky and prepared to accept a rate/salary reduction of maybe 60-70%. Not 60-70% of your old income, a 60-70% reduction.

The best thing you could do is try to find any job, staff or contract and take it. There is a reluctance on employers in non-energy related industries to take people from oil and gas because they aren't stupid and they know oil and gas pays a lot and the worker will jack and go back to oil and gas as soon as they can. You are facing an uphill battle. Even if a permanent job came up, I'd take it. If the opportunity arises to return to your old job, just don't turn up to the new one instead of waiting out your 1-month notice. It is unlikely they will do anything. But you may have to write off your last pay check.

You are making an awful lot of assumptions there. I know the O&G business. I know the volatility of it. I know the current situation. I have been working in O&G since leaving school so a long time now. I have some contracts lined up already.

Again, not meaning to be rude but perhaps in future just stick to the questions asked in a post and don't make assumptions and start rambling about something completely unrelated.

[creampuff]

I make no assumptions. If you think you will be successful in finding an oil and gas job while people I have worked with for 20 years are unemployed, across multiple sectors within oil and gas, when most companies have hiring freezes and where operators and EPC cobtractors are laying people off by the thousand, then you must know something the tst of the market does not. Also anyone may start a thread, they do not own the thread, thus you can in this and all threads expect replies offering various opinions, wanted or unwanted, that you did or did not ask for.

[Easty-5]

creampuff said:

I make no assumptions. If you think you will be successful in finding an oil and gas job while people I have worked with for 20 years are unemployed, across multiple sectors within oil and gas, when most companies have hiring freezes and where operators and EPC cobtractors are laying people off by the thousand, then you must know something the tst of the market does not. Also anyone may start a thread, they do not own the thread, thus you can in this and all threads expect replies offering various opinions, wanted or unwanted, that you did or did not ask for.

Sorry I missed your reply. I normally wouldn't respond to such rubbish but I will make an exception. You have absolutely no clue with regard to my personal circumstances, you have no clue about my skillset & knowledge of which job I undertake & you have no clue as to which sector of the O&G industry I am working in (regardless of what's in my profile). For you to assume that I have no chance of finding any work is completely unfounded and a pure assumption. For all I know, the people you state you know to have worked in the O&G industry for 20 years may be scaffolders or riggers. If that's the case, then I agree, they have next to zero chance of finding work. I'm not going to make that assumption though as I do not make complete and utter wild assumptions about people I have never met nor have any idea of their skillset and knowledge. As per my original post to you, if you are going to take the time to reply to a thread then perhaps stay on topic. You have contributed absolutely nothing of any value.


Thanks to all that have contributed, I think i now know which direction I need to head with any contact work I pick up. Thanks.