In the UK alone, there are currently 5 million self-employed people, all working for themselves and making money in various ways. Basically, if you are making money by any means other than employment, you are most likely self-employed. And if you are self-employed, regardless of whether you are also employed or not, you will need to register as self-employed with the HMRC.
If you are employed and self-employed, you will need to manage your time wisely and be aware of your responsibilities and what is expected from you in both positions. It is your responsibility to research what you need to do in terms of registration and taxes in both positions. The most important factor to note if you are self and employed and employed is that you will have to pay your tax through Self Assessment as well as PAYE. When you are employed, the company you work for should handle your PAYE tax on your behalf.
This can be a fairly confusing process, and you should seek out the assistance of a professional accountant if you find yourself confused. It is very important that you make an effort with your Self Assessment as a self-employed person as having your taxes and finances in order could contribute immensely to your success.
Be wary of applying for jobs that tell you that your title will be self-employed when the responsibilities are those of an employed person.
These employers are often looking to take advantage of people and avoid paying PAYE, leaving you the responsibility of doing a Self Assessment when the company should be handling PAYE for you.
Being self-employed does not give you the right to slack off at your regular job. If anything, your performance at work will be closely analysed to ensure that you are capable of holding your job while starting your own business. If you are self-employed, you can also pay voluntary Class3 NIC. However, there are small earnings exemptions for self-employed people making less than a certain amount each year.
Not paying NIC can be considered a serious offence, and you should prioritise paying this and ensuring that you pay the correct classes. There are many advantages to being both employed and self-employed, and that is why so many people opt to go down this route. Some of the benefits of holding an employment and a self-employment include:.
Starting a business while still being employed is a great way for you to learn about being a business owner without as many risks of those leaving their jobs to pursue self-employment.
Starting a business while you still have a job may allow you to retire from your job sooner if your business begins to do well and have the ability to provide you with passive income. You get the best of both worlds. While there are many advantages to being both employed and self-employed at the same time, there are also many challenges involved in this situation, and it can get exhausting very quickly.
One of the major challenges that come along with being both employed and self-employed is maintaining a healthy work-life and personal life balance. If you are working a traditional nine to five job and then spending the evenings and weekends working on your own business venture, you may find yourself feeling burnt out with little time to spend with family and friends, and tending to household chores, enjoying hobbies etc. Work will become your life. While making money and pursuing success may be your priority right now, it is very important that your work life does not take over your entire life.
If your business starts to get very busy, you may want to consider hiring someone to help you or speaking to your boss about reducing your working hours at your job. Remember to ask for help when you need it. These are some of the signs that indicate that you may be in a position to handle being self-employed and employed:. In order to ensure that your taxes, finances and National Insurance Contributions are all above board as a person that is both employed and self-employed, we recommend speaking to a professional accountant or financial advisor.
Is university a waste of time these days? Find out our thoughts. Terminating an apprenticeship early? When do I need to register as self-employed. Right to buy faces further criticism due to social housing shortages. What is the role of information technology in business?
We promise only quality content, tailored to suit what our readers like to see! Real Business has championed entrepreneurship in the UK since It is now the main source of inspiration, education, and collaboration for the owners of fast-growing businesses, from startups to mid-market companies.
Real Business provides readers with high profile interviews, news, insight and industry benchmark reports, as well as a growing stable of events tailored to SME growth. However, if you are in an arrangement where you have been with a Company for some time, have no plans to look for more work or have a contract that prevents you from working elsewhere, then you may not be legitimately self-employed. The first thing you should consider is whether, even though you are registered as self-employed , you are actually employed.
They have certain rules to determine whether you are self-employed or employed. HMRC have an online tool that helps you to check your employment status if you are self-employed and working for a Company. Alternatively, you can call HMRC on to discuss your situation.
Legally a company cannot make you go self-employed. No paid holiday. No company pension. No company private medical insurance. And most are not even paid that much either. The general rule is that you will be: An employee if you work for someone and do not have the risks of running a business. Self-employed if you run your own business on your own account and are responsible for the success or failure of that business.
To decide your position, you must first consider the basis on which you work. It is important to distinguish working from something that you do as a one-off, a hobby perhaps or as a favour for a friend. When am I likely to be employed? You are likely to be an employee if: You can be told what work to do, as well as how, where and when to do it. You have to do the work yourself. You can be moved from task to task.
You are contracted to work a set number of hours and get a regular wage or salary, even if there is no work available. You have an employment contract and work for a business which is not your own and in which you are not a partner.
The person or company you work for gives you time off for things like sickness and holidays, which is usually paid subject to the terms of the employment or according to statutory rules. When am I likely to be self-employed? You are likely to be self-employed if you meet the following tests: You agree to do the work, but you can send someone else to do the job for you, for instance, a builder who can send another person with similar skills in their place.
You probably have several customers at the same time. You can do the work how, where and when you like, for example, a writer who agrees to write a book and can write whenever they want to, as long as they meet the deadline set by the contract. You run a business and take responsibility for its success or failure, such as a joiner who has to redo unsatisfactory work and cannot charge the customer for the time spent redoing the work. You provide the main items of equipment or specialist tools you need to do your work, such as a pick-up truck, or scaffolding.
I am still not clear whether I am employed or self-employed If you are still not clear you should consider the factors set out in the table below. What help do HMRC provide? I work in the gig economy, what is my position? I work in the construction industry, what is my position? I am a partner in a partnership, what is my position?
There are additional tax responsibilities if you are a partner in a partnership and these are explained in our guide to self-employment which covers: Partnership tax returns Other tax considerations of being in a partnership Leaving a partnership it is possible to no longer be a partner but the partnership continues to trade There is further information on setting-up a partnership and registering a partnership on GOV. I have set up my own company, what is my position?
Can I be employed and self-employed at the same time? Can I be neither employed nor self-employed? Yes, you can be neither employed nor self-employed but still active.
Volunteering You may be gaining work experience by volunteering. If you give your time for free, you should not need to worry about tax and NIC. These can include things like: travel expenses including home to work base postage and telephone protective clothing. Training The key question to ask is: are you carrying out tasks for someone or are you merely seeing how a job is done — except perhaps for some minor actions you undertake along the way?
This situation can occur in a broad range of jobs, from apprentice electricians to trainee solicitors and accountants. You will probably still pay tax and NIC unless you fall under the employer sponsored courses exception. If you are enrolled in a government training scheme, it should normally be clear whether you have employee or trainee status: If you are an employee, you will generally have a direct contract with the person to whom you provide your services; Trainees will generally have a contract with the scheme organiser, which may involve work experience or training with a work provider.
It will usually be clear from your contract and the surrounding circumstances that the primary purpose is to train you, although you might incidentally do some productive work for your work provider.
Where can I find more information? For more information about who is an employee and who is self-employed for tax and NIC purposes: read the general guidance in the section called 'Employment Status' on GOV. Table: summary of key points on employment and self-employment This table is a generalised summary of 'indicators' used to judge whether you are employed or self-employed. Employed Self-employed Method of payment Paid a regular wage by the day, week or month Invoice the client for work done Who has control over how work is done?
The way you do your work is supervised You are trusted to do the work yourself — as long as the final product is up to standard Where do you do the work? At the place required by your engager At a place you decide, although some jobs might have to be carried out 'on site' When do you do the work? When you need another position, you apply for jobs for example by contacting the Jobcentre or an employment agency, or answering advertisements online or in the newspaper You have a business which you may run from home — for instance, you advertise your services, you take appointments, you have your own business cards, you are VAT registered Who does the work?
You do the work yourself You may send someone else to do the work for you, or arrange for a job to be done and supervise others who you engage to help you. An important legal case on status An important legal case Autoclenz Ltd v Belcher [] confirmed certain workers who had been classified as self-employed were in fact employees with a contract of employment.
So given the clear written terms of the contract, how did it all go so wrong for the company? What income is taxable? What tax allowances am I entitled to? What tax rates apply to me? How is my tax collected? What if I cannot pay my tax bill?
Do I need to complete a tax return? Self Assessment: understanding the basics What is Simple Assessment? How do I claim tax back? How do I claim back tax if I complete a tax return? How do I claim back tax on savings income? How do I claim a marriage allowance refund? How do I claim back tax on a payment protection insurance PPI pay-out?
Should I use a tax refund company? What is National Insurance? How do I get a National Insurance number?
0コメント