Self employed help / advise

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in General accounting discussion
Hi, Was wondering if anyone can help.

This is my first post so I apologise for the questions if they have been asked before.

I work full time and am paid a salary and hence pay tax & NI. I have just received my MiP licence and am proceeding to work outside of office hours and at weekends for my own clients.

Q1. Do I have to register as a self employed with the HMR&C and do I have to pay further NI contributions?
Q2. Do I then receive a tax return at the end of the tax year to complete and delcare my extra earnings?
Q3. Do I have to create a business name or can I simply trade as my name i.e Chris W?

Thanks in advance , hopefully I will return with some usefull information myself to share.

Chris.
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Comments

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    Yes
    Yes
    No

    :lol:

    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    Thanks Claudia, :D

    One last question.

    Am I safe to assume that my tax code will remain completely seperate for my full time employment?

    Thanks,

    Chris.

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    Hi Chris

    Yes it will - your current employers will not find out about your moonlighting from your tax code :wink:

    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    to expand on that -
    a) if you expect income from self employment to be under £5k you can apply for exemption from class 2 NI
    b) if your additional tax due is under £500 you get the option to have it collected through the following year's tax code, so make sure you tick/untick(??) the relevant box on the tax return and pay the tax due directly to HMRC if you don't want your tax code to change.

    jodie
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    Thanks Jodie.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    How on earth can you advise clients when you don’t even know simple procedures for your own tax affairs?

    Also how have the AAT given a practice certificate when basic understanding is not there?

    Make sure you have good PII, as this is an accident waiting to happen.


  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    Well with an attitude like that you do not appear to be very professional yourself. Do you speak to your clients like that?

    With those sorts of posts it is not surprising people do not like to ask questions and hence then make mistakes.

    I was merely asking about the options and to see how other people have gone about it. It is a big step and it is best to ask as many questions just to make sure.

    I do not have to justify to you my qualifications and competence.

    Obviously you knew all the answers when you started out.

    If you have nothing construtive to say then don't post.

  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help/advise

    Chris - If you look at the HMRC website there are local sessions bookable with the tax inspector for starting out and also for completion of your first tax return (which he schedules in at the end of your first year of trading) It usually involves 4 or 5 start up businesses listening to advice/asking questions for the morning and they produce a useful booklet. The tax return session involves completing your return with him/her. I have attended the first session and it was useful as the participants end up discussing local networking opportunities, different advertising methods and websites etc. Despite doing the Business Tax AAT course I did find it really helpful and I will get my first tax return checked by him.

    You are right - we all start from some point, some people are luckier than others with the type of accounting work experience and most of the forum members like Jodie and Claudia have been very generous with advice.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    John..

    I must admit alarm bells did ring when I first read the post but we should not jump to conclusions.

    Firstly, there is every chance that Chris is doing book-keeping work and not tax/accounts work for which the knowledge he is requesting would be required.

    One of the great things about the AAT is that it allows its members to be responsible for only undertaking work for which they are competent. I'm sure Chris would not be making false claims about his competencies to potential clients.

    Also, when applying for a practising certificate you only tick the boxes relevant for the work you will be undertaking for which, again, you are assuming tax advice was one of them.

    I am sure you are perfectly capable of airing your concerns for a fellow AAT member without being derogatory.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    Dean - well done and thank you for putting a sensible perspective on what could have become a slagging off session.

    Nuff said I think.

    Have a good weekend one and all.

    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    I think John's post is completely out of order and derogatory.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    me too, but unfortunately it's what we've come to expect from john.

    sorry claudia, that was a good effort to stop comments like mine but I couldn't bite my tongue any more :lol:
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    I agree with Peugeot and Jodie, the only time John posts is when he wants to insult someone and put them off asking for advice on the forum, then he disappears for a few months!
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    From the original post more information was shared than requested which is a good thing. This possibly helps other people who read through the history of posts.

    If you can not post a question to confirm your thinking for fear of being put down or your ability questioned then I think this forum is not raising the standard of AAT members.

    How many times as an advisor do you refer back to text books and notes, just to refresh your memory. I would imagine quite a few.

    Thank you for the positive posts in return but I will leave the forum well alone from now on.



  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    That's a shame. Unfortunately some people have the attitude that they are better than everyone else. The fact is John would have started out exactly the same as you. We all have to start somewhere.

    It is just unfortunate that he is allowed to be so rude and offensive on the forums. This is a place to seek advice, resolve queries and learn from eachother. No matter how basic the query is it is better to ask than to take a guess.

    Try not to take too much notice of Johns comments - his opinion and his contribution is pretty worthless.

    Kind regards
    Steve
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    Chris, don't lower yourself to John's level! Please continue to contribute to the forums, we'd all like to hear from you.

    John is obviously in the wrong career and so far up his own ass that he cannot offer his advice to fellow like minded people! In fact I feel quite sorry for him.

    Regards

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    Dear All

    Reaction is good; the whole point of a forum is to express opinion is it not?

    I admit I may be somewhat blunt and to the point but after all this particular forum is for people in practice not students. I certainly will offer assistance as and when appropriate but basics should be understood. I am a regular contributor on taxation web as is Mr Shepherd here (who I would point out also had some reservations in relation to the original post).

    This job as far as I’m concerned is probably the best one you can have save pro sports (lack of ability on my part) in my opinion. But I can assure you that it is serious and if you are not aware of that it can be costly. If you think I’m blunt wait until the legal eagles get into you when a claim is made. Guess it’s just ‘good cop bad cop’ still its made an interesting post.

    John
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    I agree you are entitled to your opinion but you have been known to insult members on more than one occasion when they were asking for advice and guidance in order to ensure they don't get caught up by the "legal eagles" you refer to.

    As a qualified accountant, I am also approached by fellow professionals who may also ask what you refer to as "basic" queries and vice versa. The people I refer to are also fellow qualifieds who I can assure are anything but incompetent. They are merely clarifying matters, as we all have to do sometimes (even the basics sometimes need checking). It doesn't mean you are incompetent it can sometimes save time checking with fellow individuals rather than trawling through pages and pages on the internet. As MIPs invariably charge by the hour I would have thought this to be a more cost-effective means of resolving queries.

    You are obviously a highly intelligent individual who should be respected - it is just unfortunate you have managed to tarnish your reputation on these forums.

    Regards
    Steve
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    John, I apologise for my earlier post.
    john9025 wrote:
    I admit I may be somewhat blunt and to the point

    I do also share your initial concerns but as Dean rightly pointed out, the AAT may not have issued a practicing certificate for Taxation. I just wish you could be a little bit more diplomatic in your approach.

    Regards

    Dean
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    Fantastic website link though to that taxation web!

    :lol:
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    Don't worry about asking questions, this was my first port of call for a Tax query I have just had and I received some very good feedback.
    When you take your AAT you learn the basics but not the ins and outs of setting things up. I am quite lucky that over the years I have gained a lot of experience through my employment, which proves of great assistance in helping others out - like now with the changes involving Managed Service Companies. Things change over the years, so it is always best to get a second opinion if you are not sure.
    Good luck with your work Chris
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    It's totally understandable to ask the questions raised here. The AAT qualification teaches a little bit about alot of subjects. It is unfortunate that by the time you come to practice what you've learnt, it may have been some time ago that you studied for the exam and the information retention has dwindled.

    Ask away, don't be made to feel small just becuase you're a bit green.

    Also going onthe HMRC courses is a great tip- they're free, you get a free brew and you can network and pick up clients!
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    Crumbs...

    :?

    Robert
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    I agree with Anne55, The Inland Revenue courses are good. You get the information straight from the big boys, the courses are free, all they cost you is a couple of hours of your time and you can ask all the questions you need. I have just been on the new CIS scheme course with them. Try www.hmrc.gov.uk/bst/index.htm this is the link for the Business Service team and it will tell you what they cover. If you click through to the "Book" link it will bring up a map for you to click the area you are in and give you a contact phone number.
    Good luck
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    They are good - up to a point - they do everything from HMRC point of view, which is not always correct.... particularly with regards to new CIS.

    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    Have you come across a problem with the CIS Claudia (sorry I know this is going off the Self Employed subject).
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    HMRCs definition of self employed for CIS is very different to case law definition - naturally they endeavour to interpret the rules in their favour - if you go to one of their courses, you really do need to go to an independant one as well to hear the other side of the story - then you can make a balanced judgement of whether a subbie is an employee or self-employed.

    Claudia
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    I know what you mean on that part. Their definition is not very flexible when it comes to CIS4 cards. At the end of the day they issued the cards but they change the rules and it can be very frustrating.
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise


    One thing is certain, it will get a lot worse over the next few months.

    Subbies are not going like being verified, even if they had a card previously.

    The changes in the tax deductible still seems to be a secret that hasn't been shared with a lot of them - so that's another issue to deal with.

    Helen
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Self employed help / advise

    The problem I have found when I have dealt with HMRC investigating the employed -v- self employed scenario is that they rely too heavily on their employment status indicator, which is not conclusive.

    HMRC seem to ignore issues such as mutuality of obligation when assessing whether someone is self-employed or employed and bang on about their indicator. We had a case a couple of years ago and it more or less went before the commissioners to convince them that our client was self-employed and HMRC backed down just before it was due to go to them. Their excuse? It wouldn't be in their interests to pursue a relatively immaterial amount (£4.5k). More like they knew they'd lose.

    Regards
    Steve

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