from employed to self employed

[amckay]

I'm thinking of going self employed and working for agencies to get broader experience but need to know what to get from hmrc? I know I need a utr number but do I need out else from them? I've already got pli for 2mil.
What percentage of earnings do I deduct for tax and ni? Also holiday pay?
Does anyone know of any GOOD accountants in Manchester?
Thanks

 

[Octopus]

Holiday pay when SE? What's that. Lol

 

[Richard Burns]

Register with HMRC as self employed and they will send you a UTR.
They will then send you bills for class II and class IV (if applicable) NI , your tax assuming you do not go above the income limits (£32k! lots of chance of that!) will be 20% of your profit after personal allowance, that is where you will have to work out what your profit is!

 

[amckay]

What's the difference between utr and cis?

 

[Richard Burns]

UTR is unique tax reference.
This is a means of ensuring that all your tax information is correctly routed through HMRC and assigned to you.

CIS is the Construction Industry scheme
This is a means of HMRC attempting to ensure that sub contractors in construction are not paid cash in hand and still pay tax, so the tax is taken off at a high level directly by the employer before payment to the sub contractor and then at the end of the tax year any excess is repaid. (This is a very approximate statement)
The contractor and sub contractor both need to register with HMRC on the CIS scheme.

 

[amckay]

UTR is unique tax reference.
This is a means of ensuring that all your tax information is correctly routed through HMRC and assigned to you.

CIS is the Construction Industry scheme
This is a means of HMRC attempting to ensure that sub contractors in construction are not paid cash in hand and still pay tax, so the tax is taken off at a high level directly by the employer before payment to the sub contractor and then at the end of the tax year any excess is repaid. (This is a very approximate statement)
The contractor and sub contractor both need to register with HMRC on the CIS scheme.

Ah OK.
Is it possible to have a utr and cis numbers at same time? For eg agency workers who flirt between agency and sub work?

 

[Manutd4life]

CIS is no longer available if you work for agencies. It's all the umberella scheme now and that's a scam. You will be worse off with money.

for holiday pay they take it out your weekly wage then you can ask for it back or ask them not to take it out. You also pay their NI aswell as your own.

I got out just in time.

 

[MisterE]

Take a look at this e-learning course from the HMRC :-
Starting your own business

 

[elliot123]

What is better out of the two then? CIS or UTR?

 

[happydundee]

LTD company is best. Start up one yourself, them you don't have to pay umbrella companies rip off prices. Once that's done, you pay yourself 10k a year, so no tax. Keep up your NI payments though. Any profit is taxed at 20% corporation tax, and you pay yourself the rest as a dividend. I also pay my wife 10k a year as bookkeeper and give her 50% of the company, so she gets a dividend also. This way you avoid the 40% tax, loads of stuff is deductable, like cars, fuel, tools and such like. A good accountant can save you a fortune. Totally legal.