Think I'm self-employed - who do I need to tell?

[DitaVonCheese]

I am going back to work for my little brother, part-time. Arrangements are fairly flexible. I think I'm self-employed and billing him for the hours I do rather than being employed by him if that makes sense (?) - I've done this previously when working for a catering company and it was a complete PITA having to do tax returns rather than PAYE. Guessing I need to tell HMRC about my new status (have been SAHM for the past couple of years) - do I need to do anything else?

Thanks :)

yes you need to tell HMRC and also tell the tax credits people if you're claiming

Could you use an accountant to deal with your tax etc? Might be less of a PITA.

Thanks! Yep, we get both types of tax credits at the moment I think, bit worried me going back to work will mean we get less money :( I'll only be working about 12 hours a week at the start but can't work out whether it's better to be working more or fewer than 16 hrs/week.

werewolf I earn something like £4,000 a year so not sure an accountant would be worth it (though maybe that means I earn so little I won't need to do a tax return?).

Hopefully I can bump my hours up once DD is settled in pre-school :)

If you are billing your brother hourly, your tax return should be quite easy to do on-line. I have done a few and the most difficult part was registering for the government gateway in order to complete the return on line. As you are expecting to earn about £4000 you won't actually need to pay tax although you will still need to do the tax return.

Good records are all you need to do your return (and patience when trying to set up your account on line). As you are going to be self employed make sure you keep a record and receipts for any expenditure on things you use for work purposes and hours worked.

OP
look my name up on ebay and click the "me" next to it.
There are links there about how to register and information about basic compliance with tax law.

Thanks both - will check out the ebay thing. I need to look into what I can claim for (in terms of receipts etc) as well.

your brother needs to be careful about this - the fact that you "say" you are self-employed doesn't mean that you are self-employed and shouldn't be treated as an employee.
And he is potentially leaving himself liable as the "employer" if it is an employment situation.

You don't get to be self employed just because you want to be, you need to look at the facts of the situation, badges of trade etc.

Thanks CS - I am slightly unsure about my employment status, hence my thread title! How can I tell?

try hmrc website for a start.

hmm, not sure that tool is best, but there is an employment status link on one of the pages

c&p ed the employment status stuff for easy reference:

As a general guide as to whether a worker is an employee or self-employed; if the answer is 'Yes' to all of the following questions, then the worker is probably an employee:

?Do they have to do the work themselves?
?Can someone tell them at any time what to do, where to carry out the work or when and how to do it?
?Can they work a set amount of hours?
?Can someone move them from task to task?
?Are they paid by the hour, week, or month?
?Can they get overtime pay or bonus payment?
If the answer is 'Yes' to all of the following questions, it will usually mean that the worker is self-employed:

?Can they hire someone to do the work or engage helpers at their own expense?
?Do they risk their own money?
?Do they provide the main items of equipment they need to do their job, not just the small tools that many employees provide for themselves?
?Do they agree to do a job for a fixed price regardless of how long the job may take?
?Can they decide what work to do, how and when to do the work and where to provide the services?
?Do they regularly work for a number of different people?
?Do they have to correct unsatisfactory work in their own time and at their own expense?

You can also ring them up and talk through your particular situation (at least you used to be able to, depends if the cuts have culled that helpline yet )

Thanks. I think I might have to phone HMRC and ask them. For one thing I'm not sure whether what he does counts as "film and TV industry" which I think has different rules according to that tool (suspect it doesn't, it's a media/cinematographer company). Feel like a bit of an idiot for not knowing whether I'm employed or not Also I will feel really bad if he has to pay me maternity pay.

X-posts. Thanks violet, that's really helpful. According to that list, it looks as though I am employed, not self-employed (and also as though I was actually an employee a few years ago though that was the film & tv industry, so maybe different).

Oh balls, does that mean he has to set up PAYE and stuff? What a palaver, it's only a tiny two person company (three with me, and I'm the only employee). Guess self-employed forum is no longer the right one for me to be asking in!

don't feel bad about not knowing, it is a fairly complicated area - and lots of people just "decide" what they are, and then run into problems.

On the maternity pay - if he is a small employer and you are entitled to maternity pay, then he can claim over 100% of it back (think 102%, but can't remember), the extra being for his admin costs.
So actually - it wouldn't cost him anything, and you would get the mat pay.

there are circumstances in which the employer is not actually obliged to register - hold on...

[[http://www.hmrc.gov.uk/paye/intro/register.htm You don't necessarily need to register as an employer once you take someone on. Check first that at least one of the following conditions applies to you. If any apply, then you need to register:
the employee already has another job
they are receiving a state or occupational pension
you're paying them at or above the PAYE threshold
you're paying them at or above the National Insurance Lower Earnings Limit
you're providing them with employee benefits]]

lost formatting on cut & paste - sorry, but click on the link

Thank you, this is ace :)

Also I think I'm the one who's going to have to sort out all the actual mechanics. Blegh. Guess I also have to look into pensions. Do childcare vouchers still exist? There's probably other stuff too

Good news on the 102% maternity pay though! :)

X-post again! Thanks, that's awesome. I'll have a proper read through when I'm not so tired/hungry, and also probably when I'm in the office so being paid for it

Stat Maternity Pay reclaim - but would have to be registered as an employer - which he might not want to/choose to be.

If your annual liability for Class 1 NICs is £45,000 or less
If your Class 1 NICs are no more than £45,000 in the relevant tax year, you can recover 104.5 per cent of your SMP payments. For 2009-10 this is made up of:
100 per cent of the SMP
4.5 per cent of the SMP - this is an additional amount as compensation for the employer's Class 1 NICs you'll have paid on the SMP
You can recover 104.5 per cent of the total of all payments of SMP made in the same tax month.

If your annual liability for Class 1 NICs is more than £45,000
If your Class 1 NICs are more than £45,000 in the relevant tax year, you can recover 92 per cent of the total of all payments of SMP made in the same tax month.

You might have paid no Class 1 NICs in the relevant tax year - or only paid them for part of it. In this case, you'll need to check to see if you were paying them at the rate of more than £45,000 a year. You do this by working out your average monthly payment and multiplying that by 12.