Going Self Employed But Working through Agencies

[willb1012]

I have just registered as self-employed with the hmrc. They tell me it'll be 6-8 weeks before i get my UTR number and til then ill be taxed at a rate of 30% instead of 20%. But i thought i wouldn't be taxed automatically at all and that i have to do it myself now...isn't that the point?
So are they telling me that my wage that i put in personally is going to be taxed automatically 30% until i get my UTR? At which point Il stop being taxed and be responsible for handing over what i owe in april myself?

Any help would be greatly appreciated. Im trying to set up an actual business but need cash so want to work self-employed through agencies before as a self-employed individual first but there seems to be little help on how to self asses etc.

 

[Richie N]

Agencies would likely put you on PAYE until you can prove your self employed status.

 

[villabadger]

I have just registered as self-employed with the hmrc. They tell me it'll be 6-8 weeks before i get my UTR number and til then ill be taxed at a rate of 30% instead of 20%. But i thought i wouldn't be taxed automatically at all and that i have to do it myself now...isn't that the point?
So are they telling me that my wage that i put in personally is going to be taxed automatically 30% until i get my UTR? At which point Il stop being taxed and be responsible for handing over what i owe in april myself?

Any help would be greatly appreciated. Im trying to set up an actual business but need cash so want to work self-employed through agencies before as a self-employed individual first but there seems to be little help on how to self asses etc.

You haven't stated what type of work you will be doing but I assume it's something to do with construction as you appear to be describing the CIS scheme.

If this is the case then the agency will always stop you 20% from their payments to you (30% whilst you are waiting for your utr number). As a sub-contractor, you will always pay this tax whilst undertaking site or agency work. At the end of the tax year your accountant will work out your actual liability is and, usually, claim a refund for you. Any private work you do will not be taxed in this way.

Don't forget to sort out your own public liability insurance.

 

[willb1012]

That's a great help and puts my mind at rest a bit. Yes it is construction and iv been told to contact the CIS as soon as my UTR number comes through.

So the agency will most likely stop my tax automatically but if I start doing my own private jobs inbetween agency work il have to keep records of this work (amount made and therefore amount owed) myself.

I also assume that whilst under agency work i will be covered by the employers liability but if working private jobs ill require my own public liability to cover me.

Thank you

 

[villabadger]

That's a great help and puts my mind at rest a bit. Yes it is construction and iv been told to contact the CIS as soon as my UTR number comes through.

So the agency will most likely stop my tax automatically but if I start doing my own private jobs inbetween agency work il have to keep records of this work (amount made and therefore amount owed) myself.

I also assume that whilst under agency work i will be covered by the employers liability but if working private jobs ill require my own public liability to cover me.

Thank you

Make sure you let the agency know as soon as you get your utr and registered with CIS so that they can get you onto 20%.

Regarding the insurance......NO! Get public liability insurance now - employers liability is something totally different. I'm surprised the agency hasn't insisted that you provide proof of insurance. If you worked for any other construction company then they would expect to see it - if I contracted a subbie then this is a basic requirement, as is a CSCS card if you are working on site nowadays.

You are correct regarding the private work - just ensure that you keep all receipts for tools, materials, fuel, expenses etc to offset against your tax liability. Have a word with an accountant now so that you start off on the right foot and keep in control of things. There are some decent, knowledgeable accountants on here that are worth contacting.

Hope this helps.