Self employment help

[Laststop]

Hi my dp has become self employed the company his is contracted to pays his tax out of his wage so how does a tax rebate work as he spends a lot of fuel and equipment . So do you get the full amount back eg a tank of petrol is say 60 pound or just the tax you paid on the60 I am so confused

Suggest he contacts the Inland Revenue and talks it all through with them. Who are his other clients? He can't be classed as self employed if he only has one employer...

Is he self employed and registered as such with HMRC?
Or has he set up a limited company in to which people for whom he is doing work pay and then he draws salary and possibly dividends?
Two very different situations and different rules?
Regardless of which he needs to complete mileage records.
If it is the first you run the car through the self employment then claim a portion of it's use on tax return as business use and the rest is put down as drawings.
Second you can use HMRC fixed profit car scheme and receive I think it is 45p per mile for first 10,000 miles and then around 25p per mile without paying any tax.

He works for a company but is registered as self employed he doesn't get a wage he is paid per job so is it a case of keeping records of everything brought fuel equipment , clothing and then that amount is taken from tax paid and then given back to him via tax rebate ? Sorry new to all this and trying to get my head around it . Rather concerned as he is using 100-120 of fuel most weeks driving between jobs and the equipment is high cost too so trying to work out if he is going to running as a lose if that makes sense

If he is only working for one company it is very questionable as to whether he can be self employed.
HMRC guidelines say that to be self employed you need to be able satisfy some or all of the following criteria:

1. Work for more than one client
2. Able to set own hours of work
3. Able to substitute someone else to do the work.

If he is genuinely self employed all tax is done via self assessment tax return and there is the ability to put costs etc against tax.

If he is self employed he needs to keep good accounts of invoices submitted and purchases (with receipts). These will enable him to complete his tax return. For work invoiced between April '13 to April '14 the deadline if you wish HMRC to calculate tax owed is October 2014 or if you are calculating tax owed January 2015. Tax gets paid by 31st January 2015 with payments on account for 14-15 tax year in Jan15 and July 15.
Your very first tax bill as a self employed person is always the killer.

He doesn't get a tax bill as it paid via the company something to do with the trade I have a friend who work on the same basis and is also self employed ? What I don't understand is the tax rebate part what is claim able any help ?

Sounds very complicated. Is he a builder by any chance I know there are some differences for them. You need specialist advice try HMRC or it might be worth paying for an hour with a tax accountant.

I hope the tax due is being paid by the company. That would worry me. As I understand it, if you are self-employed your are responsbible for paying your own tax and completing your tax return forms if you are not paid under PAYE. I agree with the person who said it is doubtful if he can be classed as self-employed under these circumstances when the tax due is paid for by his 'employer'.

It sounds as if your DH would be classed as a contractor for tax purpose. Here is a bit of information I found.

www.hmrc.gov.uk/contractors/

this sounds like an employer trying to dodge responsibilities and NI contributions. I'd be very concerned.

He is not necessarily employed just because he works for one company. His employment status is decided on the terms of his contract not how many companies he works for. Also, as long as he is self-employed the risk is taken by the 'employer' not him. So even if HMRC decided he was an employee it would be the employer paying the extra tax not him.

If he has tax deducted by the customer then I'm assuming he is in construction. Subcontractors' tax returns aren't difficult but if you don't know anything about tax it might be an idea to engage a local accountant (doesn't have to be a big expensive firm) who can help you with this.

The basic logic is you add up the payments he received and the tax the customer deducted, subtract any allowable business expenses and the difference is his taxable profit. Tax and NI is calculated on this profit and the amounts already deducted by the customer are taken off the total tax bill. If the customer deducted more than the tax bill then he will get a refund. If he deducted less then your partner will have to pay the difference to HMRC.

Yes he is a builder/tradesman so it's a little bit different thanks I think I have the idea just going to help him do his books and receipts and then Get a account to do the tax rebate part the tax and ni
Is all accounted for and detailed in any invoices when the company pays him

Then if I were you I'd find the accountant first and get them to tell you exactly what you need to know, no point wasting your time doing the books for him if you get it wrong and the accountant has to spend time correcting mistakes.

He needs to register as a subbie under CIS rules.

Call 0300 200 3210 and they will tell him all he needs to know.

CIS is a very different kettle of fish to usual self-employment, but much simpler.

He will probably have 30% tax deducted at source from invoices so he will undoubtedly have a refund due at year end.

The expenses you refer to can be offset also. This means the whole cost of expenses is deducted from his income before his tax due is calculated.

He will also need to pay Class 2 NI at a flat rate of £2.70 per week regardless of how much he earns through the year. Call 0300 200 3505 for this if he isn't already paying it.

Feel free PM me if you need help.

Sorry - Call 0300 200 3210 and they will tell him all he needs to know and register him I should have said.