Contracting - What to do?
Discussion
Hi
I've recently been made redundant and a previous employeer has offered me a weeks work on a contract basis to help them get a project out.
We've agreed a rate, not great but better than than the job seekers!
What else do I need to know, I will obviously need to sort the tax out which i assume I'll need to do at the end of the year.
Can I claim my expencese such as petrol to travel to their offices and lunch?
Also anyhting else I need to know?
I've recently been made redundant and a previous employeer has offered me a weeks work on a contract basis to help them get a project out.
We've agreed a rate, not great but better than than the job seekers!
What else do I need to know, I will obviously need to sort the tax out which i assume I'll need to do at the end of the year.
Can I claim my expencese such as petrol to travel to their offices and lunch?
Also anyhting else I need to know?
Edited by andye30m3 on Wednesday 11th February 11:46
Edited by andye30m3 on Wednesday 11th February 11:48
Hi Mate, sorry to hear about you losing your job.
I assume you meant contracting?
You need to think about how you will invoice for the work, Limited Company, etc?
These are fairly cheap to set up online, but with these come things such as Company accounts to be filed each year, corporation tax, etc.
It may not be worth it for a couple of weeks work, but if you expect to do more of this type of stuff, limited company is probably the way to go.
It could also help with cashflow (if required) as you would receive 100% of any invoices, BUT you will have to pay the tax at some point!
HTH
Hoppy
I assume you meant contracting?
You need to think about how you will invoice for the work, Limited Company, etc?
These are fairly cheap to set up online, but with these come things such as Company accounts to be filed each year, corporation tax, etc.
It may not be worth it for a couple of weeks work, but if you expect to do more of this type of stuff, limited company is probably the way to go.
It could also help with cashflow (if required) as you would receive 100% of any invoices, BUT you will have to pay the tax at some point!
HTH
Hoppy
Yep ment contracting, poor english and even worse typing!
I'm not 100% sure how much more I'd look to be doing, I work as an architectural technician so full time work is very limited at the moment only thing I found this week could be 1.5 hours away, which isn't ideal.
2 of my previous employeers have showed interest in me working on a contract basis and so contracting along with trying to find some private clients could be the way forward.
I'm not 100% sure how much more I'd look to be doing, I work as an architectural technician so full time work is very limited at the moment only thing I found this week could be 1.5 hours away, which isn't ideal.
2 of my previous employeers have showed interest in me working on a contract basis and so contracting along with trying to find some private clients could be the way forward.
How come they made you redundant and suddenly decided they still needed to use you?
The inference must be that your position wasn't really redundant in the first place?
The Revenue are very unhappy with this type of situation - the reason being that your former employer seems to want to rehire you as a non-employee - even though up until fairtly recently you were an employee.
On what basis can you prove that you are self-employed i.e. running your own business?
Having said that, it looks like former bank CEOs seem to be able to operate in this manner.
The inference must be that your position wasn't really redundant in the first place?
The Revenue are very unhappy with this type of situation - the reason being that your former employer seems to want to rehire you as a non-employee - even though up until fairtly recently you were an employee.
On what basis can you prove that you are self-employed i.e. running your own business?
Having said that, it looks like former bank CEOs seem to be able to operate in this manner.
Eric Mc said:
andye30m3 said:
The guys who want me to work for them for a week made me redundant in June 2008, I've been working for anther pratise since then, until they also made me redundant.
not been a great year!
So, are you genuinely self-employed?not been a great year!
Eric Mc said:
IF you are truly self-employed, have you done all the necessary HMRC contacting regarding Class 2 NI and Self Assessment?
No, As I said in the original post I don't really know what I need to do. I'll have a look on their web site and see what that comes up with.It's difficult as I'm sat at home with little luck finding work so the offer of a weeks work doesn't even need thinking about, Yep i'll do it.
I've never been out of work for more than a few days and am not liking it. but accept I need to do everything by the book.
Edited by andye30m3 on Wednesday 11th February 12:45
Eric Mc said:
IF you are truly self-employed, have you done all the necessary HMRC contacting regarding Class 2 NI and Self Assessment?
No, As I said in the original post I don't really know what I need to do. I'll have a look on their web site and see what that comes up with.It's difficult as I'm sat at home with little luck finding work so the offer of a weeks work doesn't even need thinking about, Yep i'll do it.
I've never been out of work for more than a few days and am not liking it. but accept I need to do everything by the book.
Edited by andye30m3 on Wednesday 11th February 12:45
If it's just a week's work then use an Umbrella Company (aka. Managed Service Company). No point messing around with setting up a company or registering as Self Employed just for that.
Do bear in mind that they will take a cut and that you will probably be caught by IR35 and therefore be taxed as if it was PAYE income.
Mind you, it may not be worth the Umbrella Company's time to set you up for just that amount of time, so they may not want the business.
Do bear in mind that they will take a cut and that you will probably be caught by IR35 and therefore be taxed as if it was PAYE income.
Mind you, it may not be worth the Umbrella Company's time to set you up for just that amount of time, so they may not want the business.
Edited by JonRB on Wednesday 11th February 13:10
Cheers for the replies
I've read the ebay thread and phoned HMRC.
As its quite likely to be something I end up doing for a while (if i can find the work) I think I'll look into setting up as self employed.
HMRC have given me a number to call for all the forms and said i've got 3 months to register if that's what i chose to do.
I get the impression their quite helpful if you not trying to screw them!
I've read the ebay thread and phoned HMRC.
As its quite likely to be something I end up doing for a while (if i can find the work) I think I'll look into setting up as self employed.
HMRC have given me a number to call for all the forms and said i've got 3 months to register if that's what i chose to do.
I get the impression their quite helpful if you not trying to screw them!
andye30m3 said:
Cheers for the replies
I've read the ebay thread and phoned HMRC.
As its quite likely to be something I end up doing for a while (if i can find the work) I think I'll look into setting up as self employed.
HMRC have given me a number to call for all the forms and said i've got 3 months to register if that's what i chose to do.
I get the impression their quite helpful if you not trying to screw them!
Note that although this particular company might be OK with you being self-employed, virtually nobody else in the world will be. The risk of mis-categorisation (where you claim are self-employed and the Revenue claim you aren't) is exceedingly large and in this situation the client is liable for the additional taxes. Going through an umbrella company or your own Ltd is the standard way of doing things and most clients won't touch a self-employed person with a barge pole.I've read the ebay thread and phoned HMRC.
As its quite likely to be something I end up doing for a while (if i can find the work) I think I'll look into setting up as self employed.
HMRC have given me a number to call for all the forms and said i've got 3 months to register if that's what i chose to do.
I get the impression their quite helpful if you not trying to screw them!
(Talking about IT contracting here, other industries may differ
)Totally agree with deckster. Your previous employer may be ok but hardly anyone else will be. But if they are happy then go for it, as being self-employed is a hell of a lot cheaper and less hassle.
Your previous employer will probably get you to sign a disclaimer that you are liable for your own tax, BTW.
Your previous employer will probably get you to sign a disclaimer that you are liable for your own tax, BTW.
Edited by JonRB on Wednesday 11th February 13:56
deckster said:
andye30m3 said:
Cheers for the replies
I've read the ebay thread and phoned HMRC.
As its quite likely to be something I end up doing for a while (if i can find the work) I think I'll look into setting up as self employed.
HMRC have given me a number to call for all the forms and said i've got 3 months to register if that's what i chose to do.
I get the impression their quite helpful if you not trying to screw them!
Note that although this particular company might be OK with you being self-employed, virtually nobody else in the world will be. The risk of mis-categorisation (where you claim are self-employed and the Revenue claim you aren't) is exceedingly large and in this situation the client is liable for the additional taxes. Going through an umbrella company or your own Ltd is the standard way of doing things and most clients won't touch a self-employed person with a barge pole.I've read the ebay thread and phoned HMRC.
As its quite likely to be something I end up doing for a while (if i can find the work) I think I'll look into setting up as self employed.
HMRC have given me a number to call for all the forms and said i've got 3 months to register if that's what i chose to do.
I get the impression their quite helpful if you not trying to screw them!
(Talking about IT contracting here, other industries may differ
)And no, IR35 has definitely not gone away. Witness the recent Dragonfly Ltd case.
Eric Mc said:
But don't forget thae dreaded IR35 rules which can render your own limited company fairly inneffective too.
And no, IR35 has definitely not gone away. Witness the recent Dragonfly Ltd case.
Absolutely, Eric. Far from going away, the noose is getting tighter. I'm starting to worry that one of these days one of my contracts will be contested and be deemed inside, despite all my test efforts and precautions.And no, IR35 has definitely not gone away. Witness the recent Dragonfly Ltd case.
Eric Mc said:
But don't forget thae dreaded IR35 rules which can render your own limited company fairly inneffective too.
And no, IR35 has definitely not gone away. Witness the recent Dragonfly Ltd case.
Oh agree entirely but I don't think I mentioned anything pertinent to IR35? Certainly I make no recommendations about how the OP should pay himself, just that being self-employed is unlikely to be accepted by the vast majority of large companies if that is what the OP intends to do.And no, IR35 has definitely not gone away. Witness the recent Dragonfly Ltd case.
Eric Mc said:
No you didn't - but anyone contemplating setting up a personal service company MUST make sure they are aware of IR35 and its consequences.
Out of interest, is there somewhere I can read up on the details? I may want to contract in the Uk at some point so I'd like to know what to look out for - it sounds like a potential tax liability just waiting to be contested by HMRC when they are hunting for cash.Gassing Station | Business | Top of Page | What's New | My Stuff