Employment routes

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Employment routes
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Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Fri Nov 16, 12 5:07 pm Post subject: Employment routes
I've been offered a new job. I can take a salary, and go on paye. I can take the same 'salary' and become a self employed consultant, which, apparently allows me to take home more of the salary. I feel this is riskier. Neither option comes with a pension, I'll have to fund that myself. Any advice, thoughts, experience? I guess I need to talk to an accountant, or is it very straightforward?

Cathryn

Joined: 16 Jul 2005
Posts: 19856
Location: Ceredigion

Posted: Fri Nov 16, 12 5:11 pm Post subject:
Congratulations. Can't advise though.

Bebo

Joined: 21 May 2007
Posts: 12590
Location: East Sussex

Posted: Fri Nov 16, 12 5:13 pm Post subject:
They also don't have to pay you holiday or sick pay and I'm pretty sure you don't accrue any employment rights. Deco check with an accountant but maybe also an employment law adviser.

Hairyloon

Joined: 20 Nov 2008
Posts: 15433
Location: Today I are mostly being in Yorkshire.

Posted: Fri Nov 16, 12 5:19 pm Post subject: Re: Employment routes

Nick wrote:

I can take the same 'salary' and become a self employed consultant, which, apparently allows me to take home more of the salary. I feel this is riskier.

Because you would not be an employee and therefore would not have employee's rights?
You don't get much in the way of employee's rights anyway until you've served two years now.
And (in theory at least), the law looks at what things are, not what they claim to be: if you are in practice an employee, then they are not excused from giving you your rights just because they claim you are not.

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Fri Nov 16, 12 5:21 pm Post subject:
Riskier because I've always had a job and a salary. With pension, sick pay, holiday and a notice period. Grown ups do the paperwork for me. Self employed, I'd be responsible for everything. I'd have more money, to pay for the above, but that's how it feels. feels. Not necessarily the case, of course.

Cathryn

Joined: 16 Jul 2005
Posts: 19856
Location: Ceredigion

Posted: Fri Nov 16, 12 5:24 pm Post subject:
I am guessing that it's in some rarefied line of work so only you will be able to assess how secure it will be (whatever route you choose) or how much that security actually matters to you. (I have noticed that children do not come cheap.)

Nick

Joined: 02 Nov 2004
Posts: 34535
Location: Hereford

Posted: Fri Nov 16, 12 5:30 pm Post subject:
The reality is employed or consultant, it's as stable and reliable as any 'sales' orientated job. Which means I can be fired with no notice in either case. I suspect it's thought of the change of status which is worrying me. I'm sure self employed is fine.

vegplot

Joined: 19 Apr 2007
Posts: 21301
Location: Bethesda, Gwynedd

Posted: Fri Nov 16, 12 5:35 pm Post subject:
It will impact your credit rating or at least how your credit rating is assessed but in reality that might not make a difference. Certainly recommend talking to your accountant.

onemanband

Joined: 26 Dec 2010
Posts: 1473
Location: NCA90

Posted: Fri Nov 16, 12 6:04 pm Post subject:
SE or employed is not just a matter of choice - IR could disagree and say you should be employed or SE Will you work only for them ? Will you have to purchase equipment / stock ? Do you decide what work you do , when and where ? etc https://www.hmrc.gov.uk/employment-status/index.htm

Gervase

Joined: 17 Nov 2004
Posts: 8655

Posted: Fri Nov 16, 12 6:24 pm Post subject:

"self-employed consultant" may be seen by HMRC as mere sleight of hand on the part of your employer; does it fall under IR35? Either way, in the current climate, neither offers much security, but self-employed allows you to claw back a lot more in tax (home as office, allowances etc etc). The downside is no pension, no SSP etc. Tricky choice. Can you set up an independent entity (LLP, Ltd Co etc) to "sell" your skills to your employer?

alice

Joined: 18 Feb 2006
Posts: 2820

Posted: Fri Nov 16, 12 6:25 pm Post subject:
Yeah, there used to be an issue with HMRC whereby you couldn't call yourself SE if you only worked for only one company. But my experience is a few years old now.

alice

Joined: 18 Feb 2006
Posts: 2820

Posted: Fri Nov 16, 12 6:30 pm Post subject:
Cross posted with Gervase. 'Employment' with security and a nice pension is rare nowadays. You've done well to enjoy it this long tbh

snowball
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 6246
Location: swindon

Posted: Fri Nov 16, 12 6:31 pm Post subject:
IR35 is still an issue. Don't underestimate how much time and stress sorting out tax etc for yourself is. Although they are taking away a lot of employment rights, it is still the case that there is a bit more security in being employed, including holiday and sick pay. Get proper advice and best of luck.

welsh veg grower

Joined: 23 Jan 2009
Posts: 2030
Location: here today but tomorrow...

Posted: Fri Nov 16, 12 7:18 pm Post subject:
IR35 would apply you need to be issuing invoices to more than 1 company and not spending most / all of the working week with 1 company HMRC are not that daft and would see through that one. The company are wrong to offer it as an option they are avoiding the legalities of being an employer. Bit naughty for what its worth I'd go with the employed as you would have some rights

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Fri Nov 16, 12 7:23 pm Post subject:

Yes, although the paperwork should be simple it can take a fair bit of time so factor that in to your calculations. Some of the laws are open to interpretation/change etc and accountants can also make mistakes.

On the other hand could you work elsewhere as well, increasing your income?

If you're seriously thinking of freelancing then it might be worth joining these people: https://www.pcg.org.uk

Edit to add I'm not sure some of the comments on IR35 in this thread are correct but you can get your contract/employment situation checked and underwritten.

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