New job - self employed rather than employee, advice needed

[DoolallyMarjorie]

hi, I've been offered a brilliant 2nd job, but been told it's on a self employed basis rather than employed. This doesn't worry me too much as I'm keeping my main job, this will be extra.

What do I need to know? Obviously I know I won't get paid sick or holidays, and that I need to keep records of how much I get paid. I presume I'll have to fill in a tax return - will I be sent a bill for the tax I owe, or will they change my tax code so that my employed earnings effectively pay the tax?

And if I'm self employed, can I write off against tax the clothing that I'll have to buy (as it's more formal than my main job)? What about childcare - I'll only need it for this 2nd job, can I write that off as an expense? Or would I be better getting childcare vouchers from my main employer to use? I won't need much, just 2 half-days in the school holidays.

Any advice gratefully received!

[Lizcat]

I would first make sure that you can be self employed to do this job. The basic rule of thumb supplied to my industry for whether someone can be self employed is:-

1. They can determine their own hours
   
2. They can substitute someone else in their place
   
3. They work for more than 2 individuals
   

You do not have to meet all the criteria, but in my industry HMRC have indicated that you must satisfy at least one and preferably 2.
If all of this checks out then you will need to invoice your client for your services and they will pay on the basis of your invoices. You need to keep very basic books of this to then fill in your tax return. There are well advertised dates for submission of tax return depending on whether you want them to calculate the tax or not and whether you do paper or on-line. The first year of trading for example this year you won't fill in the tax return till April 2012 then the tax will be due in Jan 2013, however also in Jan 2013 you will have to pay half the anticipated tax for the 2012 -2013 year on account and the second half of that in July 2013.
Again the rule of thumb in our industry is that if it is protective clothing or specialist uniform they will allow you to put it against tax otherwise regular clothes - no. Childcare you can not put as an expense, there are complex ways of running it through the business and putting it against drawings this does not give you any financial advantage so I wouldn't bother as it could blur the lines.

[DoolallyMarjorie]

Thanks Lizcat