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Where Taxpayers and Advisers Meet

Self employed

Hanni
Posts:1
Joined:Mon Sep 18, 2017 9:14 am
Self employed

Postby Hanni » Mon Sep 18, 2017 9:21 am

Hello,

My partner will start work next week and he was asked to work as self employed. He will get a daily pay of £130 for his labour. I am currently not working but have been doing lots of things related to his work, like writing invoices. We have two small children.

This is the first time he will be self employed. My question is, when we sign him up as self employed does it make sense to sign a business up together and share his pay as a joint income? Would we save tax and get more working tax/ child tax credit?

Also we need to get a car for driving to jobs, how can we get tax allowances on that?

How much do you think he should put aside for self assessment? I was thinking £40 for a £130 pay? Just to be on the safe side..

Are there any other things we can claim or should watch out for? This is all really new to us...


Many thanks

RMC
Posts:435
Joined:Wed Aug 06, 2008 3:35 pm

Re: Self employed

Postby RMC » Sat Oct 14, 2017 9:31 am

1. It may be that your husband is an employee; his employer would like to treat him as self-employed to save NIC, workplace pension, potential SSP, SPP etc. and related compliance costs, not to mention avoid being burdened with related employment rights. Self-employed ‘employees’ tend to claim these in cases of industrial accidents or if they get dismissed.

If you are not worried about the above and don’t mind paying your accountant a little extra, you could save tax by trading as a partnership.
If your husband works at different locations, he can claim deduction for cost of travelling there, be it public transport costs or, when he gets his car, mileage allowance.

To calculate your potential tax liability, see allowances and rates at the gov.uk website.

tinners93
Posts:4
Joined:Wed Dec 06, 2017 9:58 am

Re: Self employed

Postby tinners93 » Wed Dec 06, 2017 11:37 am

Hello,

Hope this can be of some help.

If indeed your other half is classed as being self employed then you could possible set up a partnership or you could just invoice him for the work you do. This would reduce his overall profits plus if you do not work as well then this income will be tax free for yourself. In case of any enquiry you must be able to prove what work has been done. (This has always been a sensitive issue with the Revenue so make sure you can prove everything)

You can claim business mileage on the car at 45p per mile for the first 10,000 and 25p for anything after. Please note this is only business miles.

You can still claim the full child benefit as long as his income does not exceed £50k.

If you are married and (you) are not completely utilising your personal allowance, you can apply for marriage allowance. This will give your husband a 10% of your personal allowances of which 20% can be used as a tax credit against his liability.

Just throwing some numbers around for the tax liability, these numbers will be purely on income with no deductions:

130 x 5 days = 650pw x 52 weeks = 33,800

33,800 - 11,500 = 22,300 taxable income.

(Unnecessary calculations here)

Estimated IT due = 4,460
Class 2 = 145.60
Class 4 = 2,307
= 6,912


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