Can I do some extra freelance work for the company I work for?

[Khriss]

Its all conjecture until you squint this blokes paperwork,  n odds on it wont hold water. Done most roles in For n Arb and thats why went Ltd, tax is a farce in UK and insurance just the same, would not be recommending this guy do as he thinking as it not sounding kosher.  K

Edited December 20, 2020 by Khriss
( and am sure he good at wot he does so he wont be short of work anyway!

[Mark Bolam]

2 hours ago, Paddy1000111 said:

Maybe I should have worded it differently and said to check his insurance not buy it blindly. 

 

The aircraft contract industry from the most part is no different. If you are a "freelancer" you turn up in the morning wearing clothes and carrying a coffee. You are told what to do, where to go and what needs to be done. No different to "freelance" tree work, you turn up in the morning and get told the plan for the day and you do the work you're needed for. 

 

I've talked about the shift before;

I've always done some tree work on weekends, summers when I fancied a break from slogging my arse off in a cargo hold etc. It's something I've always loved doing from when I was a young lad working with my old man on the smallholding. 

 

When this virus hit (around March) the aviation industry started lagging, flights started getting cancelled and things got, shall I say squeeky. It had a whole 9/11 feel about it. Most of the contractors at the company I was working for got laid off and I was left hiding in the background doing odd jobs. I was at that company until the last day where the bosses came down and said that the company was collapsing and there may not be work tomorrow. That night I sat in the pub watching the last of their planes land and the next day I went in, listened to the speech with all the other employees by the administration company and helped employees carry toolboxes to the car. 

I made my money moving about the UK and abroad doing repairs. Everything from putting seats and interior trim on private jets in the UK to replacing engines on Airbus' in the snow in latvia. This year the industry has crashed, not just do companies not have the work but they are laying off people left right and centre which compounded the issue even more. I was getting good money before but with more and more guys getting laid off there were tonnes of blokes who turned to freelancing and companies popped up all over offering cheaper and cheaper services due to people being desperate for work. The last contract I got offered was in Scotland in April/May this year. They offered £9.10 an hour, I laughed, hung up and then nearly cried 😂.

The other issue with the aviation industry is IR35. It was originally coming in April this year and IR35 basically means that you can't be a freelancer or contract labourer anymore. HMRC and Rishi Sunak basically wanted to stop people working for companies as an employee but being paid as an independent contractor as they wouldn't have to pay as much tax, NI etc etc. I was working with a group of guys and the companies just before the aviation crash to get around IR35. By providing our own tools, wearing our own logos, invoicing directly as opposed to being paid each week based on hours like an employee and having our own insurance we finally got around IR35 and the employment law solicitors/HR teams etc agreed that we would be able to carry on contracting. The other option was that we would become employees of the company on PAYE with a 0 hour contract. 

The final issue with aircraft work was being away all the time. I got fed up with missing birthdays, holidays, friends weddings etc. I was always at work. I took a look around me at some of the other guys, all divorced 2-3 times, borderline alcoholics, taking meds for depression and spending all their cash in foreign strip clubs and I don't want that as my future. I grew up working on a farm, I like my family and whilst the money was good, it wasn't good enough to ruin a life for. 

 

I like tree work, there's something about being in the pouring rain and then returning to a nice log fire that I love. No industry is perfect but the money isn't bad, the hours are good and I enjoy it. What more could I ask for. 

You have fought your corner well on the employment front Paddy.

I hope you’re wrong or my company is banjaxed!

I work for my mate on some jobs, he works for me on others. We both use the same freelance climber.

We all freelance as a team for other companies (under their direction) on bigger jobs, and all do bits and pieces on our own.

None of us want to be PAYE for anyone, it would be virtually impossible to work out what was going on!

We all submit our own tax return and haven’t had any issues.

 

I hope you’re wrong about Rishi.

A lot of people will be screwed if you aren’t.

Not just arb and forestry, but builders, landscapers, farmers, groundworkers etc.

 

In your own case it sounds like the pandemic has given you the excuse you needed to jump.

You can’t put a price on doing something you enjoy, so fair play to you.

 

 

[Jamie Jones]

As I understand it...
If you are PAYE with the company then you would have to be employed by them. Especially if using their equipment. It could be considered as a Tax Avoidance dodge by your employer in the eyes of HMRC. Fully check out the are you employed or self employed aspect on the HMRC website.

You can work self-employed for other companies.... But you will need to take into account the following:
-You need to be registered as also being self employed with HMRC.
-You will also need to make self-employed NI contributions as well as income tax contributions on money earned. This will be at the full rate of tax on income as your tax allowance will be allocated to your PAYE income.
-You need to genially be using your own tools of the trade other than major plant items (Otherwise you could be considered as employed and that will open a can of worms further down the road. ).
-You will need your own liability insurance as a sub-contractor unless employed through an agency.. Otherwise you could have two issues.

-If all your self employment comes largely/mainly from one company then HMRC can deem it that you are employed with that company and again that can open up a can of worms retrospectively sorting out the tax implications.
---> 1, HMRC will consider you as being employed and that will open a can of worms further down the road. 

---> 2, If some thing goes wrong on a job, The main contractor's insurance company will be looking to spread financial liability with the sub-contractors insurance. 
-The hourly rate might seem to be better for a self employed person but there are many things that a self employed person has to factor in to the equation and you might find that you are working for far less than you thought you would be.
-Who fixes the Hourly rate? You or the person you are contracted to as this can have an effect on if the tax man considers if you are employed or self employed.
-Who controls your hours and says when you can or can't work as this will also an effect of if the tax man considers if you are employed or self employed.
-Will you be appointing an accountant to manage your self employed tax affairs? If not then this will attract the taxman to look at you more closely and having done this self employed work, they might deem any work you have done for your main employer as a tax dodge and this will trigger a full investigation into bot you and your current employer. Then they will be taxes reclaimed by the tax man and possible penalties.
- So you will also need to pay your accountancy fees out of any self employed earnings you you get.
- If doing Self Employed work as well as PAYE employment you (or your accountants) will also have to complete an end of year Tax Return. If that differs from what they have on file then they will investigate you. This means time and money. You should be aware that it is very easy for HMRC to think that there is a problem when there isn't and you have done everything correctly. Having a tax inspection is not fun even if you are 100% straight and all your accounting is correct. I have been investigated a number of times and got through every inspection. But it has caused havoc and cost me loads in lost earnings, accountancy costs etc.. 
- Then there is how the self employed pay tax... You earn this year and initially pay your tax on any net profit next year. So you need to set aside your tax to pay later in year two, so don't spend it. In year two, as well paying year one tax in full, you will as need to pay tax on account based on your first years trading profits which goes towards you end of year two accounts/net profit from your second years trading. Then when you have done your year two accounts you may need to pay extra tax or make a claim for over payment. This system is so you technically are paying tax as you earn it... But this can bite you on the backside if in year two you don't earn as much as year one.
The Summery Is: If you are you are not intending to go full time self-employed it could all be more trouble and hassle than it is worth. So you want to be earning a considerable amount to make it worth it. If you are intending to go full time self employed and or set up your own business then it might be beneficial to you as you can start claiming an purchases against tax.
Where you employer will gain from you being self employed is that he will have to pay less employers National Insurance.. (But if they have a HMRC / VAT inspection then they might claim that back from them at a later date. But it will them keep both them and you on their radar to help an eye on.
 

[eggsarascal]

11 minutes ago, Mark Bolam said:

You have fought your corner well on the employment front Paddy.

I hope you’re wrong or my company is banjaxed!

I work for my mate on some jobs, he works for me on others. We both use the same freelance climber.

We all freelance as a team for other companies (under their direction) on bigger jobs, and all do bits and pieces on our own.

None of us want to be PAYE for anyone, it would be virtually impossible to work out what was going on!

We all submit our own tax return and haven’t had any issues.

 

I hope you’re wrong about Rishi.

A lot of people will be screwed if you aren’t.

Not just arb and forestry, but builders, landscapers, farmers, groundworkers etc.

 

In your own case it sounds like the pandemic has given you the excuse you needed to jump.

You can’t put a price on doing something you enjoy, so fair play to you.

 

 

It won't affect you, Mark. Use that calculator that paddy posted earlier. I'd bet you come out as self employed, if so no change.

[Rich Rule]

 @Jamie Jones good post.  Lots of information in there.

 

Jamie, did you read my post about the insurance?  I had insurance and was told as a freelancer it was invalid.  The claim was thrown out.  Change the term Sub Contract to freelancer and I would agree 100%.

[Mark Bolam]

3 hours ago, Paddy1000111 said:

Maybe I should have worded it differently and said to check his insurance not buy it blindly. 

 

The aircraft contract industry from the most part is no different. If you are a "freelancer" you turn up in the morning wearing clothes and carrying a coffee. You are told what to do, where to go and what needs to be done. No different to "freelance" tree work, you turn up in the morning and get told the plan for the day and you do the work you're needed for. 

 

I've talked about the shift before;

I've always done some tree work on weekends, summers when I fancied a break from slogging my arse off in a cargo hold etc. It's something I've always loved doing from when I was a young lad working with my old man on the smallholding. 

 

When this virus hit (around March) the aviation industry started lagging, flights started getting cancelled and things got, shall I say squeeky. It had a whole 9/11 feel about it. Most of the contractors at the company I was working for got laid off and I was left hiding in the background doing odd jobs. I was at that company until the last day where the bosses came down and said that the company was collapsing and there may not be work tomorrow. That night I sat in the pub watching the last of their planes land and the next day I went in, listened to the speech with all the other employees by the administration company and helped employees carry toolboxes to the car. 

I made my money moving about the UK and abroad doing repairs. Everything from putting seats and interior trim on private jets in the UK to replacing engines on Airbus' in the snow in latvia. This year the industry has crashed, not just do companies not have the work but they are laying off people left right and centre which compounded the issue even more. I was getting good money before but with more and more guys getting laid off there were tonnes of blokes who turned to freelancing and companies popped up all over offering cheaper and cheaper services due to people being desperate for work. The last contract I got offered was in Scotland in April/May this year. They offered £9.10 an hour, I laughed, hung up and then nearly cried 😂.

The other issue with the aviation industry is IR35. It was originally coming in April this year and IR35 basically means that you can't be a freelancer or contract labourer anymore. HMRC and Rishi Sunak basically wanted to stop people working for companies as an employee but being paid as an independent contractor as they wouldn't have to pay as much tax, NI etc etc. I was working with a group of guys and the companies just before the aviation crash to get around IR35. By providing our own tools, wearing our own logos, invoicing directly as opposed to being paid each week based on hours like an employee and having our own insurance we finally got around IR35 and the employment law solicitors/HR teams etc agreed that we would be able to carry on contracting. The other option was that we would become employees of the company on PAYE with a 0 hour contract. 

The final issue with aircraft work was being away all the time. I got fed up with missing birthdays, holidays, friends weddings etc. I was always at work. I took a look around me at some of the other guys, all divorced 2-3 times, borderline alcoholics, taking meds for depression and spending all their cash in foreign strip clubs and I don't want that as my future. I grew up working on a farm, I like my family and whilst the money was good, it wasn't good enough to ruin a life for. 

 

I like tree work, there's something about being in the pouring rain and then returning to a nice log fire that I love. No industry is perfect but the money isn't bad, the hours are good and I enjoy it. What more could I ask for. 

You have fought your corner well on the employment front Paddy.

I hope you’re wrong or my company is banjaxed!

I work for my mate on some jobs, he works for me on others. We both use the same freelance climber.

We all freelance as a team for other companies (under their direction) on bigger jobs, and all do bits and pieces on our own.

None of us want to be PAYE for anyone, it would be virtually impossible to work out what was going on!

We all submit our own tax return and haven’t had any issues.

 

I hope you’re wrong about Rishi.

A lot of people will be screwed if you aren’t.

Not just arb and forestry, but builders, landscapers, farmers and a lot of others!

 

 

[Mark Bolam]

Apologies for double post, I was distracted as Santa has just done the rounds!

No snow, so he was on a trailer towed by an Elf driving an old grey Fergy.

 

The Elf is a mate who is a full time fireman who also has a gardening business and does a bit of coppicing.

I hope he’s not charging for haulage of Santa, Rishi’s head would explode!

[eggsarascal]

There was a march in London earlier in the year to oppose Rishi Sunak's plan, it failed. It will come into play next April.

 

HMRC aren't interested in the genuinely self employed, they are after folk, both workers and employers who are pulling a fast one to avoid paying tax.

Edited December 20, 2020 by eggsarascal

[Paddy1000111]

Well, Jamie Jones sums it up pretty well.

For the arb industry, If you are doing odd jobs and fill ins then I wouldn't worry, you will be in a cloudy area and HMRC aren't going to chase you. If you are working as a "freelancer" however for a bigger company on the regular you need to look at starting to cover your arse from the HMRC vampires that lurk in the dark looking for money. 

If you are freelancing and the company you are working for is audited you could be asking for a bumpy ride.

If you are "freelancing" then watch the insurance policies. My main point is- When IR35 comes in fully a "freelancer" i.e. a contracted labourer that does work for you will no longer legally exist and will be an illegal position. Insurance companies aren't going to give you insurance for an illegal form of employment no matter how many online blogs you read. 

 

In the eyes of employment law "freelance" isn't a thing. You are either employed by someone as an employee and have to pay NI and all the rest or you are a subcontracted company outside of the IR35 regulations, be it a sole trader or a Ltd company. The rules are changing big time from April 2021, know where you stand, dot your i's and cross your t's. 

 

In regards to Rishi, He's a lying, thieving little C*** and I hope he dies a very painful death. He's ruined industries, he's going to make companies bankrupt, he's going to cause a massive amount of instability in smaller companies that rely on contractors to fill a gap in the busy season. He's royally F'd one of the backbones of the economy and ruined small businesses all in hopes of scraping a few quid extra of the little man. 

[Jamie Jones]

9 minutes ago, Rich Rule said:

 @Jamie Jones good post.  Lots of information in there.

 

Jamie, did you read my post about the insurance?  I had insurance and was told as a freelancer it was invalid.  The claim was thrown out.  Change the term Sub Contract to freelancer and I would agree 100%.

I have not read your post... But if working sub contract.. ie a contractor brought is. My insurance company says that I still need it.