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Self-Employed or Employed or Both????
Hi all, just thought i would keep you updated with how the business is coming along. We are planning to get VAT registered so we and companies can claim vat back but thats not an issue. I have looked into Tax and National Insurance and from what i can gather i have to declare myself employed and self employed.
Employed because i work full-time as a marketing executive and self-employed because im running my own business at nights and at weekends. Has anybody else en-counted this? Im keeping receipts and records of what im buying but didn’t realise i needed to pay NI twice???Any help 😮
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11 Replies
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as it worked for me the tax man was made aware of the situation and i just paid paye on the employed job and normal business practices on the home business – as i did not realy need the extra money i kept buying kit which made going business 100% easy and the capital alowences took care of the tax. but accountants are best advice as a rule
chris
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It’s not as bad as it sounds…
Your current employer takes care of all your “employee” tax, so you can ignore that until Self Assessment time. If you want to go self employed aswell (which is what I did) you have to register for tax and NI. You will pay £2.00 per week for the privilege of being self employed. On top of this, the tax man will take 7% NI contributions and around 23% tax from your profit… he does this via the dreaded tax return. In the tax return you also have to provide information about your full time employment, but it’s all on your P60 so that’s straight forward.
The £2.00 per week is just a simple direct debit, although, I’m not sure if you can take it as a business expense and hence knock it off your profit each year (anyone know if we can do this??)
Hope this helps
😀
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If you are going vat registered I take it this means you are making it a Ltd company? If so, you will not be classed as self employed but you will be classed as an employee. If you are a company which is set up as E. Smith trading as blah blah blah then yes you are classed as self employed.
If you are a bit lost with it all, you really do need to talk to your accountant, they will advise on the best and easiest way for you to do it and probably sort most of it for you. Just make sure you find a good accountant, ask around, get recommendations off other businesses if you can?
Carrie 😀
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Are you going VAT registered because you have to or because you choose to?
Going VAT registered means an additional VAT return, additional money for your accountant to do it, if you are going VAT registered voluntary think wisely before going ahead with it, I see it has no value whatsoever to become VAT registered unless your turnover threshold requires you to. -
You do not need to be a company ltd or otherwise to be VAT registered.
You only pay national insurance on your main job and it is up to you which you declare as your main job.
Your are technically a employed person who does extra work in your spare time. Consult with your local tax office but I would suggest that you keep accounts (receipts and copy invoices) and then make a declaration at the end of twelve months to the taxman (remember to claim all allowable expenses against profit).
An accountant would probably be a good idea
Regards Adrian
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I 100% agree with outline. Think hard about just jumping in to get VAT registered just for your customers to claim back, they wont mind if your registered or not. If your turnover is going to be over 56k then just register when you need to. Talk with your accountant about it as you may/will be giving money away for the sake of it.
Kev
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sorry, but got to disagree with going VAT registered.
If the materials you buy have VAT put on them, then its worth going.
as for the paper work, all you you have to fill in is 1 form. Yes theres aditional work in the accounts book, but nothing that can`t be done yourself.
don`t forget, you don`t pay the VAT, your customer does.
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I agree with you Becky, being VAT registered is an advantage to me (I’m just self employed working from home) my customers don’t care because they claim it back, I however claim the vat back on all my materials, equipment, fuel, services I buy in etc. I use Quickbooks for the accounts, Sage and similar do the same thing so the extra paperwork involved is negligible, 1 form, copy the figuers. If you do register look into – I think its called cash accounting where you are liable for VAT when you get paid rather than when you issue the invoice, this may ease cash flow at the end of the quarter.
Alan -
quote Carrie:If you are going vat registered I take it this means you are making it a Ltd company?
Sorry, just re-read my post 🙄 bad wording on my part and if you were not confused before – by the time you ever finish chatting with me you wouldn’t know if you were coming or going! :lol1: As Adrian said you dont need to be ltd to be vat reg. I should have just asked are you setting up as ltd or are you going self employed, trading as…? 😮 I dont even know why I mentioned the vat part?
Anyway, you have plenty of replies here, with a mixture of advice ….. and go chat with a good accountant.
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quote Coupe_20v:It’s not as bad as it sounds…The £2.00 per week is just a simple direct debit, although, I’m not sure if you can take it as a business expense and hence knock it off your profit each year (anyone know if we can do this??)
Hope this helps
😀
Tax and N.I. are personal liabilities and so you can’t claim them as a business expence. 🙁
Paul R(Mackerelbus Design)
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quote becky:don`t forget, you don`t pay the VAT, your customer does.a good tip if you do decide to go registered 😛 i opened a seperate bank account just for the vat years ago, so when cheques arrive, i take off the vat, then put it in the vat account, so when the end of every quarter arrives, your vat is always there ready to be paid!! 😛 (vat inspector actually thought it was a bloody good idea) 😉 i wonder why!!
Nik
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