Help!!!! never been self-employed before!!!

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I''ve just started working as part of Arcedia Group Ltd today and have just found out that I'm working on a self-employed basis. How do I go about getting taxes and all sorted out? It was literally sprung on the 4 of us today at the end of the training. Nothing was said about self-employment basis on the job advert. False advertising?
Can somebody give me some advice because I'm soooo confused.
Thanks
 
I was employed by a company on a self-employed basis before.

You need to contact the Inland Revenue- just give them a call and they will register your self-employed status. The good thing about being self employed is that you don't have to pay tax as you go along- so you can stash the tax in a savings account and earn interest on it until you have to pay it.

You will also need to keep some form of accounts. This is most likely very simple in your case, just keep a record of all money coming in. Being self-employed you can deduct business expenses from your income, and you only get taxed on the outstanding balance (e.g. transport)- it might be worth your time setting up a simple account system to record 'business expenses' so you can deduct them before paying tax. You can even deduct some money for 'rent' if you work from home at all-- as well as telephone bills, etc.

You might want to get an accountant to do your end of year tax return for you- once you are registered with the Inland Revenue they will send it to you automatically. It is not necessary to have an accountant but if you don't like doing the paperwork they should do it for you fairly cheaply since there is not much work involved. I've filled my own self-assessment forms and they are pretty self-explanatory.

Don't forget you need to take care of your own National Insurance contributions as well- HMRC will tell you about it if you ask them. The minimum is about £2.50 a week- but you should top it up (at 6% i think but not entirely sure) if you ever intend to claim a pension or other state benefits.

Another thing to consider: VAT. If your 'business' turns over more than £67k a year you will be required to register for VAT. This is great for you as you can claim back all the VAT on your purchases. Extra paperwork- but worth it ;).

I know it seems a bit daunting to begin with but in time you will get to grips with it. In the first instance the most important thing is to make sure you put aside any monies in a separate account for your tax each month. This is not an exact figure but as a rough guide i would put aside 22% of the first £34k... check the tax band for higher income rate i'm not sure of the exact amount? In reality, there is a personal allowance of around £6k a year before you pay tax at all, but if you follow the above, you will always have more than enough in your tax account- nothing worse than having a surprise tax bill sprung upon you!

There is lots of useful info on the government website:

HM Revenue & Customs: Self Employed

Register as self employed here (must be done within 3 months or you will get fined!):

HM Revenue & Customs:
 
What she said.

Bit naughty of them to employ you on a self-employed basis. Means you have less rights.
 
Another thing to consider: VAT. If your 'business' turns over more than £67k a year you will be required to register for VAT. This is great for you as you can claim back all the VAT on your purchases. Extra paperwork- but worth it ;).

I believe because trading is zero rated/exempt you cant register for VAT.
 
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I know this is an old thread but I'm in a similar position.

How does this work because the HMRC website says the below and I get more yes' in the employee than self employed?

"As a general guide as to whether a worker is an employee or self-employed; if the answer is 'Yes' to all of the following questions, then the worker is probably an employee:

Do they have to do the work themselves?
Can someone tell them at any time what to do, where to carry out the work or when and how to do it?
Can they work a set amount of hours?
Can someone move them from task to task?
Are they paid by the hour, week, or month?
Can they get overtime pay or bonus payment?

If the answer is 'Yes' to all of the following questions, it will usually mean that the worker is self-employed:

Can they hire someone to do the work or engage helpers at their own expense?
Do they risk their own money?
Do they provide the main items of equipment they need to do their job, not just the small tools that many employees provide for themselves?
Do they agree to do a job for a fixed price regardless of how long the job may take?
Can they decide what work to do, how and when to do the work and where to provide the services?
Do they regularly work for a number of different people?
Do they have to correct unsatisfactory work in their own time and at their own expense?"

Thanks
Al
 
Begs the question how can someone employ you on a self-employed basis? As I understand it there are three basic parameters to being self-employed:
1. You can make a profit or a loss
2. You can get someone to stand in for you
3. You mainly get your own clients/customers.

If HMRC accept the fact that you are self employed (they will tell the NI people) you need seperate bank account for the business (your name T/A your company). Keep all invoices & receipts. Keep clear accounts.
Also see if you need to be VAT registered.
Put aside some money for tax as you will get demand for lump sum at end of year(self-assessment).
 
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