Some frequently asked questions about Self-employed status and the CIS scheme.
Do you deduct my National Insurance contributions?
No. National Insurance contributions (NICs) are not taken from your income. You need to organise payment of these separately by setting up a small weekly direct debit with the NI contributions office. Your contributions will be at the lower rate of 8% as apposed to 11%, you will also have to pay £2.40 per week.
What about Income Tax?
Although we will deduct the relevant percentage under the CIS scheme, as a self employed trader you are responsible for your own Income Tax and national insurance contributions and for filing a self assessment Tax return at the end of the financial year. You will pay Income Tax at the same rates as an employee.
You should bare in mind that there may be a balancing figure to Pay to HMRC at the end of the financial year and you should make due provision.
Can I claim expenses?
Yes. As a self employed trader you are eligible to claim expenses that you have incurred solely as a result of carrying out your work and these are taken into account at the end of the year. It is therefore important that you keep a record of the cost of any materials, tools and other equipment necessary for you to work, during the course of the year. Also, any mileage, subsistence costs (accommodation, food etc) incurred with travelling to any work places.
Why doesn’t everyone work self employed then?
You can only register as self-employed because of the way you supply your services to your clients and that the contract you have, does not fit within the legal definition of an employee/employer relationship.
Do I get holiday Pay or sick pay etc?
No. You are only entitled to holiday pay as an employee or worker. As you are not an employee of the company you will not qualify for sick pay/maternity pay/paternity pay from us. You may qualify for some from HM Revenue and customs.
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