Self employed: - tax advice
One of the advantages of being self-employed
Self employed - tax advice
Because of the tax system the self-employed have a competitive advantage over businesses which employ people in the usual way.
This is firstly because the National Insurance payable in rsepect of people who are conventionally employed (and subject to P.A.Y.E.) is much higher than for those who are self-employed, and secondly because of the additional VAT. VAT does not have to be charged by those in self-employment provided their turnover does not exceed the registration threshold (currently £73,000).
As an example a self employed person might charge £100 to a customer (who is a private indiviudual), and after paying his own Income Tax and Class IV National Insurance be left with a net £71.00. If however the same customer were to have the job done by a business which sent out one of its employees to do the job, and the firm were to pay the employee such gross amount as to give him an extra £71.00 in net pay, the firm would have to charge the customer £142.58, evem assuming no extra profit for the employer.
LIFE IS NOT QUITE AS SIMPLE AS THIS - There are other things to consider, such a your bookkeeping and accounting system, and your self assessment income tax returns so if you would like to discuss matters further with us please telephone 01562 751111. Remember, our initial meeting is always free.
