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Nick

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

Congratulations. Smile

Can't advise though.
Bebo

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

Re: Employment routes

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

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. Smile
Cathryn

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

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

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

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

http://www.hmrc.gov.uk/employment-status/index.htm
Gervase

"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

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

Cross posted with Gervase.

'Employment' with security and a nice pension is rare nowadays. You've done well to enjoy it this long tbh Confused
Snowball

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

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

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: http://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.
Penny Outskirts

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: http://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.


What TD said.

Love the Octopus TD, is he called Paul Wink
Treacodactyl

Love the Octopus TD, is he called Paul Wink

Paula, although she didn't predict the footy results very well so I should have eaten her after all. Twisted Evil
Penny Outskirts

Love the Octopus TD, is he called Paul Wink

Paula, although she didn't predict the footy results very well so I should have eaten her after all. Twisted Evil

Laughing Laughing
dpack

paye or ltd co

in between has perils i wouldn't want

paye =paperwork done ,employment law is handy and after a year is very handy

ltd = you get the paperwork done (as an expense )and the ltd co employs you and your dog etc ie minimal tax ,claim vehicle /insurance ,claim clothes etc etc .but you need sickness insurance .pay for conferences etc etc .

bottom line is would the saved tax cover the insecurity ?

with only one employer i would go for paye
marigold


with only one employer i would go for paye

This. You need to earn A LOT more to make it worth the hassle of being self-employed or running a limited company if you are basically working for one employer. Either you have to spend unpaid hours doing paperwork or pay someone else to do it (most likely both). And if you turn over more than 77k you'll have to do VAT as well. Factor all that into your calculations. Also check what the deal is about claiming expenses, using a company vehicle/mobile/computer etc if you aren't on the payroll.

What's wrong with staying where you are, with all the benefits you get there?

To replace what you've got now you may need to buy a pension, life insurance (your current company probably provides some nice death in service cover), professional indemnity insurance, personal health insurance, private medical insurance... As well as covering holidays, bank holidays, tax, NICs etc and paying yourself a salary.
vegplot


with only one employer i would go for paye

This. You need to earn A LOT more to make it worth the hassle of being self-employed or running a limited company if you are basically working for one employer. Either you have to spend unpaid hours doing paperwork or pay someone else to do it (most likely both). And if you turn over more than 77k you'll have to do VAT as well. Factor all that into your calculations. Also check what the deal is about claiming expenses, using a company vehicle/mobile/computer etc if you aren't on the payroll.

What's wrong with staying where you are, with all the benefits you get there?

To replace what you've got now you may need to buy a pension, life insurance (your current company probably provides some nice death in service cover), professional indemnity insurance, personal health insurance, private medical insurance... As well as covering holidays, bank holidays, tax, NICs etc and paying yourself a salary.

Now I know where I'm going wrong.
Nick

Thanks all. Have an accountant appointment on Tuesday. Please keep thoughts coming.

As for staying where I am, Naw. Wink
marigold


with only one employer i would go for paye

This. You need to earn A LOT more to make it worth the hassle of being self-employed or running a limited company if you are basically working for one employer. Either you have to spend unpaid hours doing paperwork or pay someone else to do it (most likely both). And if you turn over more than 77k you'll have to do VAT as well. Factor all that into your calculations. Also check what the deal is about claiming expenses, using a company vehicle/mobile/computer etc if you aren't on the payroll.

What's wrong with staying where you are, with all the benefits you get there?

To replace what you've got now you may need to buy a pension, life insurance (your current company probably provides some nice death in service cover), professional indemnity insurance, personal health insurance, private medical insurance... As well as covering holidays, bank holidays, tax, NICs etc and paying yourself a salary.

Now I know where I'm going wrong.

That's just the money side - quality of life stuff is less easy to quantify. Contentment is worth a lot, happiness is worth more and your health is priceless Wink .
Nick

I already do self assessment, so tax paperwork is part of life.
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