UK: Do I need to register a 'business' to do casual contracting work?
April 23, 2013 2:11 AM Subscribe
London UK: I"m looking into doing some casual occasional work in the Financial Sector as a contractor/ consultant to small firm. They have suggested that it might be easier to arrange if I was a 'business' or something?
I am Australian (living in London with work visa) and have no idea how these things work here in the UK. What are my options?
Its likely to be a few days work here and there, maybe 1-5 days a month. Total pre-tax annual income for this work is likely to be in the ~£10,000 - £15,000 p.a. range.
Is the issue for them that if I work for them as an individual - they would have to pay Tax / NI on my behalf? Whereas if I register as a business then its my responsibility and they just pay my company a fee X for services rendered?
Its likely to be a few days work here and there, maybe 1-5 days a month. Total pre-tax annual income for this work is likely to be in the ~£10,000 - £15,000 p.a. range.
Is the issue for them that if I work for them as an individual - they would have to pay Tax / NI on my behalf? Whereas if I register as a business then its my responsibility and they just pay my company a fee X for services rendered?
Yes, sounds like that's the issue. Puts the onus on you to do your own taxes - and means you get no employee benefits.
You don't neccesarily need to "register a business", you may only need to register as self employed. See the HMRC site for further info. Takes almost no effort and the tax returns are simple enough, in particular if you have just the one source of income to declare.
posted by Hobo at 2:45 AM on April 23, 2013
You don't neccesarily need to "register a business", you may only need to register as self employed. See the HMRC site for further info. Takes almost no effort and the tax returns are simple enough, in particular if you have just the one source of income to declare.
posted by Hobo at 2:45 AM on April 23, 2013
Self employment for migrant workers
How to register as self employed
posted by emilyw at 2:45 AM on April 23, 2013
How to register as self employed
posted by emilyw at 2:45 AM on April 23, 2013
Response by poster: ok I just registered as Self-Employed.
I'm working for a couple of different companies on contract but hadn't organised myself yet.
posted by mary8nne at 4:03 AM on April 23, 2013
I'm working for a couple of different companies on contract but hadn't organised myself yet.
posted by mary8nne at 4:03 AM on April 23, 2013
If your earnings are £10-15k per company then it probably would be worth your while setting up as a ltd company: with multiple employers you would be in no danger of falling under IR35.
There are plenty of accountants around who do this kind of thing as their bread + butter but it might not be worth the hassle if you're only here for a short while.
posted by pharm at 4:08 AM on April 23, 2013
There are plenty of accountants around who do this kind of thing as their bread + butter but it might not be worth the hassle if you're only here for a short while.
posted by pharm at 4:08 AM on April 23, 2013
This thread is closed to new comments.
If the work you are doing for them meets certain conditions then you can register as self-employed; you'll be paying self-employed NI contributions yourself then, you'll be responsible for invoicing them and paying your own taxes at the end of the year, and they don't have to "employ" you and run your taxes/NI through their PAYE system.
Registering as self-employed is very easy and costs nothing. It's what lots of people do for occasional casual work.
Alternatively you can form a limited company and work through that, but if your work looks like "regular employment" to HMRC under the rules linked above, you may be contravening IR35 and that counts as tax avoidance.
Having a limited company is slightly more of a pain; you have an obligation to file your accounts with Companies House each year (as well as HMRC), for which you need an accountant, as well as various other bits and bobs.
If that sounds like too much, you can arrange to pay an Umbrella company to employ you themselves, invoice your clients, and treat you as their employee. Again, this is technically tax avoidance if you are in contravention of IR35.
I can't speak to how your visa situation might interact with any of this.
posted by emilyw at 2:42 AM on April 23, 2013