Information on being self employed/your own business???
Thread Starter
Joined: Jul 2003
Posts: 8,293
Likes: 78
From: Aberdeen
Information on being self employed/your own business???
I need information on the following, so if there is anyone on here that can supply it i'd be very greatful. Basically here's the background, i work offshore in the oil and gas industry and do quite a lot of days each month and get hammered for tax etc.... So the way around it is to set up my own business and work thru an agency, which will mean i get better paid and pay less tax and NI etc but the downsides are no company pension and sick pay, but i earn even more and pay less tax. Just wandered if there are any kind of cover/insurance for being off sick. i do plan to go and see an accountant when i get home becasue at the moment i am getting totally screwed out of a lot of money. 
PassionFord Post Whore!!
Joined: May 2003
Posts: 4,164
Likes: 1
From: Bedfordshire
There is a little thing called IR35 which stops people doing that I'm afraid.
And when you get caught.... and you will.... the Tax Man will no only want your employees contributions from you but he will also want EMPLOYERS contributions....
So any savings you would have made will be wiped out.
And remember... the tax man can go back 7 years.... so you could bimble along quite happily thinking you are in the clear and then WHAM !! Huge Bill with 14 days to pay.
To work for an Agency in a tax efficient manner you would have to set up a Limited Company and a Limited Company is an entity in its own right, that can sue and be sued. You may be the owner and technically the employer, but you will also be an employee of that company... Hence you would get hit for the employees and employers tax & NI contributions.
A friend of mine has just had a visit from the IR35 team to see if he is inside or outside the scope of IR35
He's ok BUT they gave a chilling warning that you are NOT safe working for an 'Umbrella' company.
So just pay your tax and be happy with your lot, you only pay tax when you are earning money....
And when you get caught.... and you will.... the Tax Man will no only want your employees contributions from you but he will also want EMPLOYERS contributions....
So any savings you would have made will be wiped out.
And remember... the tax man can go back 7 years.... so you could bimble along quite happily thinking you are in the clear and then WHAM !! Huge Bill with 14 days to pay.
To work for an Agency in a tax efficient manner you would have to set up a Limited Company and a Limited Company is an entity in its own right, that can sue and be sued. You may be the owner and technically the employer, but you will also be an employee of that company... Hence you would get hit for the employees and employers tax & NI contributions.
A friend of mine has just had a visit from the IR35 team to see if he is inside or outside the scope of IR35
He's ok BUT they gave a chilling warning that you are NOT safe working for an 'Umbrella' company.
So just pay your tax and be happy with your lot, you only pay tax when you are earning money....
10K+ Poster!!
Joined: May 2003
Posts: 13,146
Likes: 0
From: Newbury
Theres nothing wrong with tax avoidance....
Tax evasion is illegal however!
One legal way is to pay yourself say 4k a year (sadly below the tax and NI and EMPLOYERS NI) and pay the company shareholders a dividand oof any profit made by the company. You will pay tax on dividands (or rather your company would of 19%).
IR35 is more to do with being single sourced.
Alex
Tax evasion is illegal however!
One legal way is to pay yourself say 4k a year (sadly below the tax and NI and EMPLOYERS NI) and pay the company shareholders a dividand oof any profit made by the company. You will pay tax on dividands (or rather your company would of 19%).
IR35 is more to do with being single sourced.
Alex
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