Recommended software (template) for Self Employed?

Anyone recommend some software (or an excel template) for Self Employment?

Only need something really basic. Income is "labour", so just need to track income, the odd deductable, and drawings to cash?

any suggestions?

Reply to
Pete
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Excel is a good place to list these things but you don't need a template, just do it as you would on paper.

If you are a builder/decorator then the Subcontractors Schemes are going to make life more complicated for you, if you are in IT watch out for IR35, and there are a host of other things which if we had more infomation people here could help you with.

Here's another: if you are driving a car you should be keeping a detailed log-book of Start Mileage, Finish Mileage, Where, When and Why.

Reply to
Troy Steadman

IR35 doesn't just apply to IT and it doesn't apply at all to "Self Employment" does it? (if the OP really means Self Employment as opposed to a one/two man Ltd. company).

Reply to
usenet

"Troy Steadman" wrote

Ermm - doesn't IR35 just apply to someone contracting through a **Ltd Co** ? The OP talks of "Self Employment", which suggests sole-trader status??

Reply to
Tim

No, the legislation refers "a third party". So it can apply to partnerships - although, probably less common.

Reply to
Doug Ramage

Indeed not. Troy was just thinking, no doubt, that an IT contractor would be more likely than most other kinds to find himself in circumstances of IR35 applying, i.e. of basically working for just one client.

Doesn't it? The purpose of IR35 is to prevent use of a company wrapper as a tax-dodge by ending up paying less tax than if working as an employee. Self-employment can also cause you to pay less tax than working as an employee, if you use the word "tax" in the wider sense which includes NICs. If you work under the mantle of self-employment, the state is going to miss out on the employer's NI, and could conceivably seek to recover it under IR35.

Reply to
Ronald Raygun

"Ronald Raygun" wrote

AIUI, they can decide that you are not self-employed, and thus tax you as an employee, but in the case of self-employed people this is not done under IR35 ... ?

Reply to
Tim

The IR35 legislation refers specifically to a Ltd. company and 'intermediaries' doesn't it? While I don't disagree with you in principle (that the government may try the same idea on self employed people) I think it will require different legislation.

Reply to
usenet

wrote

How do you know whether a particular person *is* "self-employed"?

Unfortunately, the term 'self-employed' person is not "cut-and-dried" - and indeed someone can be held to have different status (employed / self-employed) for different things, such as taxation & employment legislation (such as statutory holidays, sick pay, etc).

The big question is "are you self-employed for tax purposes", and sometimes this is difficult to determine - for instance it may come down to the IR making a ruling .... !!

Reply to
Tim

Surely it's simply that they're not an employee, i.e. they don't have an employer who pays them and pays tax via PAYE.

Reply to
usenet

Well, no, not quite. You can be employed and also self-employed. For example you could have a part-time job as a supermarket checkout chick and also take in ironing or maintain people's gardens.

It should still be simple enough, though. You're self-employed (irrespective of whether you are also employed) if you have income from working other than as an employee. The "working" bit is relevant because certain types of income, such as from investments, don't count.

Reply to
Ronald Raygun

Heheh, would that it be that easy!

Nope - if the IR doesn't agree that you are "self-employed" - even if you invoice a client and get paid that way (and the client doesn't operate PAYE for you, and doesn't consider you to be an "employee") - then the IR can still come after you/your client (as a pseudo-employer!) for extra tax ... [It nearly happened to me!!]

The "self-employed" person has to persuade the IR that they are, indeed, self-employed under certain criteria.

Reply to
Tim

Ah, but there is a difference in that case isn't there.

If you are paid 'as if you were self employed' (i.e. not a Limited Company) then the IR will chase your putative emplyer not you. On the other hand if you are working through your own Ltd. company then the IR will chase you (well, your Ltd. company, but it comes to the same thing).

This is where we came in, there is a significant difference between your problems as self-employed (e.g. a window cleaner) vis-a-vis your problems if you are a Ltd. company. The IR35 regulations apply only where there is an 'intermediary'.

I don't think it's down to the self emplyed person to do this, it's the employer who will get attacked by the IR. If I can manage to go around getting paid in cash for work I do then, as long as I declare the income correctly the IR are not going to do anything to me. However they may well go after the people (companies in particular) who are paying me this way. At least this is my understanding, though as I'm in the other camp (Director of a two person Ltd. company) it's not something I dabble in personally.

Reply to
usenet

Thanks for this.

Trying to sort out some kind of record system for someone, who has been told by his previous employer that he has to become "self employed". He currently works with someone else, who "has contacts" to get the work (building/plumbing etc).

Turns out to be as follows.

Until 1 Jan, was PAYE, since then combination of self employment & CIS (i.e flat rate deduction made from payments)

When working as Self Employed gets paid directly by the person having the work done (hence no deductions made)

When working as a "subcontractor" for a seperate building company get paid under CIS (with deductions)

Payment could be cash or cheque - and frequency depends on work.

Would be be advisable to set up a seperate bank account for income (to keep personal spending seperate).

The PAYE earning receive the P60, The CIS payments are supported with the CIS25 which shows payment and deductions, so this is a evidence of income. I am slighly concerned by the "self employed" payments. These appear to be varying cash/cheque payments for work done but have no paperwork to support (presumably the invoice for the total work goes to the main person he is working with). Is this acceptable?

For record keeping what should be recorded? How should my current thoughs be ammended?

1) Keep diary of place of work each day. 2) Keep two seperate sheets. One for Cash. One for Banking. Both as follows.

Date, Comments, Receipt, Payment, Balance

List all receipts, list CIS receipts as receipt and tax payment seperately. Pay in cash = Payment Cash and Receipt Banking. Any money taken out for "personal" spending is listed as Payment to Drawings (is any further record required?)

Person he is working with wants "petrol money" - I dont however that any paperwork is received in return? Can this be claimed as an expense or must it be from drawings (due to lack of paperwork?). The person he is working with has told him to claim mobile phone bills, clothes etc. However I feel that this is not a expenses incurred in business (i.e only private calls are made etc) - Am I right or wrong?

Any other thoughts or advice?

Reply to
Pete

wrote

... which amounts to the same thing, when the contract between yourself and the client (sorry, "putative employer"!) agrees that you will indemnify the client for any missing personal tax that the IR might try to reclaim from the client (as a "putative employer").

wrote

Ah! - the dreaded "intermediary". This is another thing that the IR considered trying to class the client as (mentioned the word "agency", even though the client is far from being an agency) - because they obtained work from elsewhere then sub-contracted the work onto others...

BTW - I'm not a window cleaner!

wrote

See above - the client ("employer") would then come after the self-employed worker ("employee"), in my case.

Anyway, when the IR is making an enquiry into *your* returns, wouldn't you rather have it closed quickly than have to wait around while the IR and the "putative employer" argue it out?

wrote

Why do you think they'll let you get away with all the expenses that you've claimed for, eg motoring expenses between home & client? [If self-employed, then "base" is at home - but if employed then "base" is at the client's office...]

Why do you think that they'll let you get away with paying lower NI than an employed person would??!

Reply to
Tim

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