Freelance and self employed

[Recruitment1]

Hello

I was wondering whether a freelancer (working 2 different jobs) who chooses to register self employed would increase their tax liability.

If the self employment route is chosen and the employer still continues to pay the tax and NI, would the self employed still have to pay class 4 NI individually.

Since the self employed can voluntarily become VAT registered would they then have to invoice the employer for work done, to show the VAT or can the employer continue to pay them in the same way.

Thanks

[accountantpete]

1) You should seek to establish if you can be regarded as self-employed.

2) The tax liability should be less as you can claim expenses against the income.

3) If you go self-employed you invoice the "client" and they pay your fees gross.You are responsible for paying tax and Class 4 NIC's.

4) If you register for VAT you bill in the same way as above but with output vat added on top.

[Recruitment1]

Thanks Pete, but do some self employed still get paid by the client i.e PAYE or is it compulsory they invoice the client?

Also would class 2 NI be payable as well.

[accountantpete]

No R1 if you are employed then the employer deducts paye tax & nic.

If you are self-employed then the client pays gross without deducting tax- the main exception being sub-contractors in the building industry where the contractor deducts 20% tax but the sub-contractors are still regarded as self-employed.

You normally issue an invoice if you are self-employed as the client will want documentary proof for various reasons.

Class 2 nic is also payable at £2.30 per week unless you earn less than £4,825 per annum and apply for an exemption certificate.

[peternjob]

we all are trying to find New Jobs to get self employed. but freelance is a good way to make money at home.