View Full Version : Self employed HELP!??
novaguy08
01-03-10, 08:43 PM
Hi guys,
Looking at getting myself a 2nd Job as a Taxi driver, however many of the roles require being self employed, does anyone know anything about this.
I think I know a few basics like paying own NI & tax however I really need some more advice before I get my nose to the grindstone!!
Cheers in advance!!
Hi guys,
Looking at getting myself a 2nd Job as a Taxi driver, however many of the roles require being self employed, does anyone know anything about this.
I think I know a few basics like paying own NI & tax however I really need some more advice before I get my nose to the grindstone!!
Cheers in advance!!
Not much to it really, set up a direct debit to pay your NI. Works out at about £12 per month. Keep a good record of your income and anything that you've spent thats work related that you can deduct against your tax at the end of the year. I think the limit is £5225 before you start paying tax on your earnings so if you dont earn that much then you dont pay tax!
It could work differently though because its a 2nd job!
Tax allowance is £6,475, but you can only use that on one income (so not on a second job).
However, I think things are different for self employment.
I presume it would just work the same as registering self employed as a sole trader. I.E. just one job?
I can give loads of info on that.
Tax allowance is £6,475, but you can only use that on one income (so not on a second job).
However, I think things are different for self employment.
Hmm tax allowance has gone up then! Sometimes its not actually worth having a second job with the way they work things. Not legitimately anyway!
Not that im condoning doing it on the sly but sometimes needs must if your struggling, the government il just hump you for it otherwise.....
novaguy08
01-03-10, 09:22 PM
Well its more money, thats what I need right now, regardless of the amount of Tax i pay Im not going to jump above the next tax bracket unless I suddenly earn psycho amounts of money, not something that I expect to do driving a taxi. either way its money that I could do with...
I plan to set up another accounts (no o/d no fancy extras just an account with a card & online banking that I can use to put money into and transfer it in and out therefore keeping a good record of my earnings as im useless with it myself!!) that way I can use the statements to document my earnings for tax returns etc.
I thought that NI contributions were based on a percentage??
I'd prefer to keep it legit & above board as that way there will be no backlash should someone complain.
I realize that in order to keep a good record in the banks I would need to bank daily and everything I earn and that's what I intend to do.
You'd pay class 2 NI which is just a basic fee you pay if your self employed, Class 1 NI is percentage based which you pay if your employed!
I had a diary that i filled in every day, listing all incomings and outgoings. Done my banking once a week, kept any invoices, receipts etc. in a folder. So come tax return time you have it all in front of you!
Oh aye, you'll be paying basic rate (20%) on every penny you earn in a second job, but making £10k and paying £2k tax still leaves you £8k up, so its better than nothing.
NI is a pain to figure out at the best of times, but for self employed people it goes something like this (http://www.businesslink.gov.uk/bdotg/action/detail?type=RESOURCES&itemId=1073790859)
novaguy08
01-03-10, 09:29 PM
Thats the idea of doing it daily, that way I can keep a really good record of what I have coming in..... keeping recipts for fuel in a folder, so that I can keep very close detail on what I take and earn, mainly for my own sanity and that way there is no backlash should anyone from the tax office come-a-knocking.
I plan to set up another accounts (no o/d no fancy extras just an account with a card & online banking that I can use to put money into and transfer it in and out therefore keeping a good record of my earnings as im useless with it myself!!) that way I can use the statements to document my earnings for tax returns etc.
I thought that NI contributions were based on a percentage??
I'd prefer to keep it legit & above board as that way there will be no backlash should someone complain.
I realize that in order to keep a good record in the banks I would need to bank daily and everything I earn and that's what I intend to do.
You need to be careful with what your actually banking thought. As say you get given £100 cash for your birthday, an whack it in the bank, qeustions will be asked as to where it came from & why its not been declared as earnings (i.e. possible cash in hand work, an well all know Mr Tax Man does not like that as he loses out)
N.I. Every 3 months youll get an N.I. bill of £32.20 that you pay at a local post office/paypoint etc etc, they send it in the post once youve got a UTR number (Unique Tax Reference) you NEED one of these! You call up HMRC an inform them you wish to registers as a sole trader, then take some very basica details (name, addres, NI number, contact number, trading name) an then they do the rest. Legally you cant get paid until you have a UTR.
Claiming stuff back. Keep every receipt! Literally everything, as you can claim xx amount back from it (cant remember what it is off top of my head) someinthg like 10% tax petrol & 20% for diesel, car tax receipts, mot receipts, work cloth reciepts (even that new £50 kickers shirt you bought for a night out for your birthday :p ) receipts for food youve purchased whilst out on the road, phone top ups, tools, general vehicle upkeep. No matter how small you still get a wedge back (last year i put in minimal reciepts as left it to the last minute an still got £1k back untaxed)
KEEP RECORDS OF YOUR EARNINGS! Up most importance!! They (HMRC) will want to know where money is coming from, if tax is paid on it, how much tax was paid etc etc etc You really really REALLY do not want some one from the tax office investigating you!! All your accounts get frozen, you cant withdraw ANYTHING at all an they can literally take the cloths of your back if youve been a naughty boy!! GET AN ACCOUNTANT, and a good one at that, not your mates, dads uncles sister in law because she has a maths degree.
novaguy08
01-03-10, 09:33 PM
ah so 2.60 a week paid 1/4ly or monthly, (class 2) however if I make more than £5'175 a year in profit (so less overheads) then I pay class 4 which is based on a calculation.
ah so 2.60 a week paid 1/4ly or monthly, (class 2) however if I make more than £5'175 a year in profit (so less overheads) then I pay class 4 which is based on a calculation.
No, calculation NI is for PAYE, as in "on the books" staff. As a sub contractor you pay £31.20 every 3 months an thats it. You have 28 days to pay this.
EDIT: Its £31.20 i just checked my bill lol
sulphur
01-03-10, 09:38 PM
I've been thinking of going self employed for a while now. Few lads I know are working for a mates brother, up-n-coming firm and I can't really see any flaws with going self employed. This fella even put £1/hr aside for your holidays, so technically you've still got everything the 'cards in' boys have. Only thing that puts me off is the lack of notice if work dries up. :(
I've been thinking of going self employed for a while now. Few lads I know are working for a mates brother, up-n-coming firm and I can't really see any flaws with going self employed. This fella even put £1/hr aside for your holidays, so technically you've still got everything the 'cards in' boys have. Only thing that puts me off is the lack of notice if work dries up. :(
No sick pay, no holiday pay (in my case) an as you say, work can get scarce.
If you break a leg an need 6 weeks off, well thats 6 weeks no earnings. If your car dies, same again, your screwed as you earn naff all if its a no show for work.
novaguy08
01-03-10, 09:40 PM
You need to be careful with what your actually banking thought. As say you get given £100 cash for your birthday, an whack it in the bank, qeustions will be asked as to where it came from & why its not been declared as earnings (i.e. possible cash in hand work, an well all know Mr Tax Man does not like that as he loses out)
N.I. Every 3 months youll get an N.I. bill of £32.20 that you pay at a local post office/paypoint etc etc, they send it in the post once youve got a UTR number (Unique Tax Reference) you NEED one of these! You call up HMRC an inform them you wish to registers as a sole trader, then take some very basica details (name, addres, NI number, contact number, trading name) an then they do the rest. Legally you cant get paid until you have a UTR.
Claiming stuff back. Keep every receipt! Literally everything, as you can claim xx amount back from it (cant remember what it is off top of my head) someinthg like 10% tax petrol & 20% for diesel, car tax receipts, mot receipts, work cloth reciepts (even that new £50 kickers shirt you bought for a night out for your birthday :p ) receipts for food youve purchased whilst out on the road, phone top ups, tools, general vehicle upkeep. No matter how small you still get a wedge back (last year i put in minimal reciepts as left it to the last minute an still got £1k back untaxed)
KEEP RECORDS OF YOUR EARNINGS! Up most importance!! They (HMRC) will want to know where money is coming from, if tax is paid on it, how much tax was paid etc etc etc You really really REALLY do not want some one from the tax office investigating you!! All your accounts get frozen, you cant withdraw ANYTHING at all an they can literally take the cloths of your back if youve been a naughty boy!! GET AN ACCOUNTANT, and a good one at that, not your mates, dads uncles sister in law because she has a maths degree.
the idea was to set up a separate account for all of the taxi earnings..... so the money taken (minus fuel which would be documented) would be deposited daily into this account where it would stay until I calculate the tax once I have done that I would calculate what needs to stay there and then take the rest out and put it into my account via TT which would be documented, meaning my statements would show daily banks of the money taken, and in theory the money left at the end of the month would be the tax to be paid to HMRC, I would back up everything to an excell document. It would make my life easier if its all seperate from my other bank account.
novaguy08
01-03-10, 09:40 PM
No sick pay, no holiday pay (in my case) an as you say, work can get scarce.
If you break a leg an need 6 weeks off, well thats 6 weeks no earnings.
Thats why its a 2nd job ;) the idea is to switch to earlies with my current job and then take driving taxis up in the afternoons & weekend nights.
sulphur
01-03-10, 09:41 PM
Aye but this fella puts aside £1/hr of your wage, and that builds up as your holiday pay. Technically, self employed workers can claim their 4weeks holiday from their employer...but the employer doesn't need to keep them on after that. lol
novaguy08
01-03-10, 09:43 PM
Aye but this fella puts aside £1/hr of your wage, and that builds up as your holiday pay. Technically, self employed workers can claim their 4weeks holiday from their employer...but the employer doesn't need to keep them on after that. lol
Thats like working in a school, it works out that you get £6 something an hour however you only get paid for £4 something however you still get paid during school holidays.
Thats why its a 2nd job ;) the idea is to switch to earlies with my current job and then take driving taxis up in the afternoons & weekend nights.
Best idea if youve got some kinda of financial commitment yes (mortgage, rent etc etc)
the idea was to set up a separate account for all of the taxi earnings..... so the money taken (minus fuel which would be documented) would be deposited daily into this account where it would stay until I calculate the tax once I have done that I would calculate what needs to stay there and then take the rest out and put it into my account via TT which would be documented, meaning my statements would show daily banks of the money taken, and in theory the money left at the end of the month would be the tax to be paid to HMRC, I would back up everything to an excell document. It would make my life easier if its all seperate from my other bank account.
Theorectically sound providing its done right.
Small scale book work isnt really that hard TBH, its when its to having people working for you, running multiple companies it gets ****.
novaguy08
01-03-10, 09:47 PM
Best idea if youve got some kinda of financial commitment yes (mortgage, rent etc etc)
Rent, kids plenty of commitment me!!
Theorectically sound providing its done right.
Small scale book work isnt really that hard TBH, its when its to having people working for you, running multiple companies it gets ****.
yeah if its done right then the theory is sound.
However its me, driving a taxi, so I dont need to worry about employing people for a long time!!
There is (somewhere) a bit on the HMRC website about starting out into self employment, gives a lot of info about it. Ive never seen it so dont know for sure but apparently its there?
EDIT: BTW you need to keep all your invoices/receipts/proof of earnings for a minimum of 6 years. No ifs, no buts. And you might want to look into liabiliy insurance/vehicle insurance for taxi use.
novaguy08
01-03-10, 09:53 PM
worth a look, will do that tomorrow now.
going to talk to my uncle who is already a taxi driver and see if he has any further pointers that can help me out.
EDIT: BTW you need to keep all your invoices/receipts/proof of earnings for a minimum of 6 years. No ifs, no buts.
i fell foul of this, hello fines and a 2k outstanding tax bill :(
novaguy08
01-03-10, 09:53 PM
note taken, in laws have a loft :D
i fell foul of this, hello fines and a 2k outstanding tax bill :(
Mental aint it, all for sake of some bloody paperwork :tard:
novaguy08
01-03-10, 09:58 PM
it is unfortunately however Mr Darling like to know if he is loosing out on some money.
quick note, is this the longest thread that has stayed serious on the PNG??!!
quick note, is this the longest thread that has stayed serious on the PNG??!!
Yes. And probably the most informative one to ever grace the servers of the place too lol lol lol
novaguy08
01-03-10, 10:02 PM
indeed it is I have learned much, now im off to bed to digest :D thanks for the help mike, you have rep coming your way!!
If this pulls off then its going to be of great help to me!!
EDIT: I must spread some more love before giving it to you again im afraid mike, sorry chap!
sulphur
01-03-10, 10:03 PM
I too must look into this more seriously. I've been putting it off due to lack of information..(and pure laziness) but the opportunity of better income is infront of me, t'would be ignorant not to research it properly.
indeed it is I have learned much, now im off to bed to digest :D thanks for the help mike, you have rep coming your way!!
If this pulls off then its going to be of great help to me!!
EDIT: I must spread some more love before giving it to you again im afraid mike, sorry chap!
No bother cheif :) its a big step not so much for you as you already have a PAYE job so your *kinda* safe with respect to having consistant work.
I too must look into this more seriously. I've been putting it off due to lack of information..(and pure laziness) but the opportunity of better income is infront of me, t'would be ignorant not to research it properly.
Never be afraid to do something new. Remember, amateurs built the ark, professionals built the titanic.
2 sites for help: www.direct.gov.uk (http://www.direct.gov.uk) and www.businesslink.gov.uk (http://www.businesslink.co.uk)
other option, walk into a jobcentre and ask about self employed advice. suprisingly they also help employed people too....
pop into your hmrc office too, theyre nice people to chat to.
anything else i may be able to help with.
sulphur
01-03-10, 10:09 PM
Never be afraid to do something new. Remember, amateurs built the ark, professionals built the titanic.
It wouldn't be anything new regarding work, just the whole self employed stuff is rather daunting when you're so used to PAYE. Words of wisdom there though, but as said, the only flaw I can find with S/E is simply the holiday/sick pay..which a better wage would make up for anyway.
Edit: The other thing that puts me off is the commitments (mortgage etc.) Came out of work xmas last year, for 3months, and I'm still recovering from it. lol
It wouldn't be anything new regarding work, just the whole self employed stuff is rather daunting when you're so used to PAYE. Words of wisdom there though, but as said, the only flaw I can find with S/E is simply the holiday/sick pay..which a better wage would make up for anyway.
Its just a case of having to keep money saved up for a "just in case" scenario. But the tax rebates are also a massive perk TBH.
dont forget your working tax credits lads... esp if you have kids... ;)
sulphur
01-03-10, 10:16 PM
Well that's how I've been seeing it TBH. The rebates are a saving on their own really. Plus, with having an income boost, it would cover more bills etc but I'd also have additional pennies to bank, thus increasing the savings and comfortability.
Something I'll def be looking into now.
Oh, while we're on the subject of rebates, how easy is it to claim back tax from petrol? A fella from the construction union told us we can claim 40p/mile for the first 10k, 25p/mile anything over, travelling to and from site in our own vehicles. I've done 12k this year..working out at £4500...this true?
dont forget your working tax credits lads... esp if you have kids... ;)
What exactly are/is working tax credits??
Oh, while we're on the subject of rebates, how easy is it to claim back tax from petrol? A fella from the construction union told us we can claim 40p/mile for the first 10k, 25p/mile anything over, travelling to and from site in our own vehicles. I've done 12k this year..working out at £4500...this true?
Eh?? You claim a percentage back on the amount of tax on the fuel you buy (amount in monetary value)
IIRC its something like 10% claim back for petrol, 20% for diesel? Or something like that anyway.
Im sure its a 50% claim back (on deisel) for the first year of ownership of a commercial vehicle an 20% there after?
TBH i dont delve muchly into "how much" i claim back, the accountant does that as its part of her job. Which incendently you can claim back what you pay your accountant when she does your book work for you lol
sulphur
01-03-10, 10:28 PM
Look here (http://www.riftuk.com/processing-and-validating-claims.php) Mike, a rep from this firm came to our site. :)
mike, tax credits are paid to people who earm below a certain amount, and are over 25. it tops up your weekly wages, pop onto google and smash in working tax credits calculator.
Look here (http://www.riftuk.com/processing-and-validating-claims.php) Mike, a rep from this firm came to our site. :)
Thats for PAYE, still be very handy for plenty of people on here tho!!
sulphur
01-03-10, 10:45 PM
Yeah, I'm PAYE atm so was just wondering if anyone had any experience with it..
Powered by vBulletin® Version 4.2.5 Copyright © 2024 vBulletin Solutions, Inc. All rights reserved.