Self Employed

[westredd]

Probably a stupid question, but I dont know the reason.

rather than set up a limited company, why do people not register as self employed for contracting and then fill in self assesment inland revenue forms for tax returns. I heard that alot of agencys wont deal with you if you are self employed, is that the reason why people go ltd company? why dont agencys deal with self employed contractors?

thanks.

[Sockpuppet]

Because if you don't pay the PAYE/NIC then they can become liable for them. Being a Ltd provides a legal barrier between them and you so you as Director become liable for them.

HTH.

[vetran]

agencies act prevents them. LTD or PAYE only.

[westredd]

understood, thanks

[Dundeegeorge]

Not true (though agents woiuld tell you otherwise)

agencies act prevents them. LTD or PAYE only.

An old colleague of mine contracted direct (or rather sub-contracted himself) to a number of companies as self-employed. Of course he had history with each of them, and each contract specifically indemnified the client from any tax/ni obligations.

[TheFaQQer]

An old colleague of mine contracted direct (or rather sub-contracted himself) to a number of companies as self-employed. Of course he had history with each of them, and each contract specifically indemnified the client from any tax/ni obligations.

If you go direct, then the Agencies Act does not apply, since there is no agent.

The OP was asking why agents will not deal with the self employed - they are not allowed to, and if they could, the wouldn't since they could get landed with you tax bill if you are deemed an employee.

I'm not convinced that an indemnity in the contract between self employed person and the client holds any water - if HMRC come calling, then having a clause that says "he promised me he'd pay it, it's nothing to do with us..." would probably get struck out if he was viewed as an employee who hadn't paid his tax. (IANAL)

[halfpint]

Can i just get this straight in my case,

A company has approached me with a contract for 6 months at 24hrs a week, so they will be paying me monthly after i log all my hours on there system. I am already self employed doing the odd thing for people can i have do this under self employment?

Thanks

[Crossroads]

Can i just get this straight in my case,

A company has approached me with a contract for 6 months at 24hrs a week, so they will be paying me monthly after i log all my hours on there system. I am already self employed doing the odd thing for people can i have do this under self employment?

Thanks

Whether you are self employed or employed is not a matter of choice, but a matter of fact. What are the working arrangements? Are you really a part time employee?

Oh, and

[The Lone Gunman]

TLG in spreading the wisdom mode (again):
I assume some of you are new to this....

A long time ago in a galaxy far far away....... Sorry.

It is historical, actualy Maggies fault I think.

The first IT contractors were self-employed. The Government of the day had a panic. Due to the high fees involved they may lose tax if the freelancers didnt declare and or fled with the cash.
To counter this they introduced legislation which basically stated that; if a business used a self employed contractor then the client and the agent could be held responsible for any unpaid tax.

Thus, virtualy overnight, the contracting industry went the Ltd comapny route.
Obviously, being the switched on operators that we are, contractors realised that they could take advantage of their incorporated status by paying minimum wage and maximum divvies, but that leads to a long story.

HTH.

[XLMonkey]

Can i just get this straight in my case,

A company has approached me with a contract for 6 months at 24hrs a week, so they will be paying me monthly after i log all my hours on there system. I am already self employed doing the odd thing for people can i have do this under self employment?

Thanks

Yes. It is legal. You can do it.

However, I would be surprised if your clients HR department would allow it. If they are smart, then they will know that if you don't pay your NIC, then the revenue can make them pay it for you (this applies irrespective of your IR35 status).

If you plan on contracting for a long period of time/with more than just this one client, then you are probably better off setting up your own limited company anyway.