2 week IT contract

[Jessica@WhiteFieldTax]

Even though what makes income "self-employed" or just "other income" isn't really anything to do with the amount earned, would you say there is any kind of de minimis amount that you could put into the "Other Income" box on a SA before it would attract HMRC's attention? I wouldn't have thought they'd be concerned with anything under the small earnings limit for class 2 NI anyway. In other words, if no class 2 NI would have been due anyway, the income has been declared and tax has been paid, I'm not sure why HMRC would be bothered.

In HMRC's own guide, they do mention that one of the types of income that could go into Box 16 is "freelance income". For a short, one-off job, that the OP is talking about, wouldn't that cover it?

Fair point; income well under the class II / IV threshold should be safe. The "freelance income" bit is probably someone in HMRC corporate communications not really understanding what freelance is; they've probably heard the word and thought it sounded clever (as you will gather, I don't hold them in high esteem) - seriously, I'm not dounting what you've quoted, but I think its incorrect on their part and misleading.

[TheCyclingProgrammer]

I believe also you should be able to avoid IR35 considerations since you could bill this as a ONE TIME specific piece of work which doesn't put you into the same category as essentially doing the same work as the "permies" in the office. A decent Solicitor / Accountant is still your best bet though.

If OP isn't working through his own Ltd company then IR35 doesn't apply anyway.

[jimbo45]

Even though what makes income "self-employed" or just "other income" isn't really anything to do with the amount earned, would you say there is any kind of de minimis amount that you could put into the "Other Income" box on a SA before it would attract HMRC's attention? I wouldn't have thought they'd be concerned with anything under the small earnings limit for class 2 NI anyway. In other words, if no class 2 NI would have been due anyway, the income has been declared and tax has been paid, I'm not sure why HMRC would be bothered.

In HMRC's own guide, they do mention that one of the types of income that could go into Box 16 is "freelance income". For a short, one-off job, that the OP is talking about, wouldn't that cover it?

Hi there
You could treat this as Part time work - For example say even while you are employed you work in the evenings for a few hours a week as a Bar tender in a Weatherspoons pub. I believe they simply deduct whatever the income tax is and pay you the rest.

For a Two week job you could presumably bill company XXXX for "Services supplied" and then look up in the tax tables the amount of Tax - send it to HMRC and pocket the rest.

I've done the odd free-lance photography + article gig for a travel mag -- submitted the work and received the cheque. Then simply declared this as "other income" on tax return.

I can't see any advantage in setting up companies / umbrella solutions etc for a two week gig -- however my experience of these type of gigs is that they can often last a lot longer --then it's a whole new ball game.

I believe also you should be able to avoid IR35 considerations since you could bill this as a ONE TIME specific piece of work which doesn't put you into the same category as essentially doing the same work as the "permies" in the office. A decent Solicitor / Accountant is still your best bet though.

The only difficulty I can see here is if you are claiming Unemployment or other "out of work" benefits for this period -- although even here you can have these suspended if required for this period - remember that DWP is coming down REALLY HARD on people claiming out of work benfits while they are working so TELL THEM if this is the case. For two weeks they might not even adjust anything - but you've covered the legal position !!.


Cheers
jimbo

[TheCyclingProgrammer]

Because additional income doesn't carry NI, and Self Employed income does, I think you'ld have a hard job getting that one pat HMRC in an investigation, even if its one contract only. Still sounds to me like "an adventure in the nature of trade" which is the key test.

Even though what makes income "self-employed" or just "other income" isn't really anything to do with the amount earned, would you say there is any kind of de minimis amount that you could put into the "Other Income" box on a SA before it would attract HMRC's attention? I wouldn't have thought they'd be concerned with anything under the small earnings limit for class 2 NI anyway. In other words, if no class 2 NI would have been due anyway, the income has been declared and tax has been paid, I'm not sure why HMRC would be bothered.

In HMRC's own guide, they do mention that one of the types of income that could go into Box 16 is "freelance income". For a short, one-off job, that the OP is talking about, wouldn't that cover it?

[Jessica@WhiteFieldTax]

For just two weeks worth of work, I'd have though umbrella company would be your best bet.

Concur, on the facts given.

[Jessica@WhiteFieldTax]

WMS, get a PO, bill them as yourself, declare on your tax return as additional income. You don't have to become officially 'self employed' for two weeks work.

Because additional income doesn't carry NI, and Self Employed income does, I think you'ld have a hard job getting that one pat HMRC in an investigation, even if its one contract only. Still sounds to me like "an adventure in the nature of trade" which is the key test.

[mudskipper]

Agree a fee and payment terms in writing; that constitutes all the contract you will need. Do the work. Write to them saying you now owe me £x, can I have a cheque please. Pay it in to the bank. Declare it on your SA as earned income.

For two weeks, why do anything else?

WMS, get a PO, bill them as yourself, declare on your tax return as additional income. You don't have to become officially 'self employed' for two weeks work.

[northernladuk]

As you can see you can't just decided to do a contract if you can't find a perm job. You have to think about how you are going to set up for contracts. Umbrella is by far the easiest but still isn't straight forward.

IMO you can't just dip in and out and see contracting as an easy out just because you can't find work. It is a different beast with different responsibilities and ways of thinking.

You being a permie heading in to a contract I can't see how you can be outside IR35, you still think of yourself as a permie. Umbrella negates this of course but still, contracting is a different mindset.

You may also find contracts harm your chance to get a perm job and vice versa.

Either go perm, or do you research and go full contracting. The two are not interchangeable IMO.

[Maslins]

For just two weeks worth of work, I'd have though umbrella company would be your best bet.

This. The client might not accept you as a sole trader, and you defo don't want the hassle of incorporating a Ltd Co for 2 weeks work.

If they do accept you as a sole trader, even if you'll already be doing a personal tax return, you should still inform HMRC now of the self employment (self employment not quite the same as self assessment), set up class 2 NICs etc, only to cancel it 2 weeks later.

[GillsMan]

For just two weeks worth of work, I'd have though umbrella company would be your best bet.

[malvolio]

Good morning

How should someone set themselves up for a short 2 week IT contract?

Background - permenantly employed till resignation a few months ago. Now looking for new work, either contract or permenant. Old compay have offered a 2 week contract related to an ongoing project.

Would it be most efficient to do this as a sole trader or through an umbrella company? From what I can see, umbrella companies may prove more costly (weekly fees etc) but a sole trader leaves you open to liability/professional indemnity issues. If a sole trader, i.e. self employed, does that also preclude any future Contract jobs sourced through an agency? Having to do a self assessment form is not an issue, that will be done anyway this year as salary will probably fall within the 50-60k for the child benefit reclaiming hassle.

I'm struggling to work out the best route, any advice is most welcome. Thank you!

Agree a fee and payment terms in writing; that constitutes all the contract you will need. Do the work. Write to them saying you now owe me £x, can I have a cheque please. Pay it in to the bank. Declare it on your SA as earned income.

For two weeks, why do anything else?

[freda42]

Good morning

How should someone set themselves up for a short 2 week IT contract?

Background - permenantly employed till resignation a few months ago. Now looking for new work, either contract or permenant. Old compay have offered a 2 week contract related to an ongoing project.

Would it be most efficient to do this as a sole trader or through an umbrella company? From what I can see, umbrella companies may prove more costly (weekly fees etc) but a sole trader leaves you open to liability/professional indemnity issues. If a sole trader, i.e. self employed, does that also preclude any future Contract jobs sourced through an agency? Having to do a self assessment form is not an issue, that will be done anyway this year as salary will probably fall within the 50-60k for the child benefit reclaiming hassle.

I'm struggling to work out the best route, any advice is most welcome. Thank you!