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View Full Version : A warning to freelancers and the self-employed everywhere - MoneySavingExpert article



roadsidetree
8th February 2012, 14:58
Came across this article in MSE today (Martin Lewis' Blog… | A warning to freelancers and the self-employed everywhere (http://blog.moneysavingexpert.com/2012/02/02/a-warning-to-freelancers-and-the-self-employed-everywhere/))

As Martin alluded the details are quite sketchy. But can't help but wonder why she went burst though.

TheFaQQer
8th February 2012, 15:04
So, the gist of the blog post is "don't be a twat and think all your company money is your own".

Hardly a warning, or news - if it's not yours, don't spend it.

craig1
8th February 2012, 15:07
I work on a simple premise for income

1/3 for the tax man
1/3 for savings/investment
1/3 to bills and "blow as I damn well see fit"

Anything spare in the tax man account after I reconcile with my tax return gets treated as a nice bonus into my "blow as I damn well see fit" account.

BoredBloke
8th February 2012, 15:15
I work on a simple premise for income

1/3 for the tax man
1/3 for savings/investment
1/3 to bills and "blow as I damn well see fit"

Anything spare in the tax man account after I reconcile with my tax return gets treated as a nice bonus into my "blow as I damn well see fit" account.

doesn't leave a lot for the dog does it!

Spacecadet
8th February 2012, 15:22
doesn't leave a lot for the dog does it!

She can earn her own f**king money

craig1
8th February 2012, 15:25
doesn't leave a lot for the dog does it!

It does mean that I have a credible option of one day having a right old temper-tantrum at an idiot client, say "**** the lot of you" and retire into either Plan B or anything else I see fit! It's quite soul enriching knowing that I have that option when dealing with utter idiots and that I wouldn't need to ever bluff.

It usually also means that my "bonus" from my tax account pays for a nice holiday each year :)

MarillionFan
8th February 2012, 15:27
It does mean that I have a credible option of one day having a right old temper-tantrum at an idiot client, say "**** the lot of you" and retire into either Plan B or anything else I see fit! It's quite soul enriching knowing that I have that option when dealing with utter idiots and that I wouldn't need to ever bluff.

It usually also means that my "bonus" from my tax account pays for a nice holiday each year :)

:wave:

northernladuk
8th February 2012, 16:57
Problem is we see people falling for this in the professional forums as well so isn't isolated to a few young TV Z listers.

d000hg
8th February 2012, 17:11
Ah. Accounting advice for the terminally stupid.

Terrific.


Problem is we see people falling for this in the professional forums as well so isn't isolated to a few young TV Z listers.He's not aiming this advice at professional contractors, but people taking their first steps into self-employment. Many of whom will be sole traders rather than Ltd, which makes things much easier to screw up.


Obviously it's easier to call them stupid though.

JoJoGabor
8th February 2012, 17:45
I lvoe the fact that suddenly anyone can simply open a limited company to reduce their tax bill. With the Student Loans Director in the news, looks like this is really going to take off.

Hopefully this will keep the tax man busy with simple open and shut IR35 cases, and will leave us lot alone!!!

northernladuk
8th February 2012, 17:52
I lvoe the fact that suddenly anyone can simply open a limited company to reduce their tax bill. With the Student Loans Director in the news, looks like this is really going to take off.

Hopefully this will keep the tax man busy with simple open and shut IR35 cases, and will leave us lot alone!!!

Have you had a few too many coffee's or something??? :confused:

JoJoGabor
8th February 2012, 18:00
Eh? To clarify, I have seen several articles advising people wanting to restructure their employment arrangements to make use of a limited company, without any mention of IR35. If the masses start doing it should keep Hector busy

TheFaQQer
8th February 2012, 19:34
I lvoe the fact that suddenly anyone can simply open a limited company to reduce their tax bill. With the Student Loans Director in the news, looks like this is really going to take off.

Hopefully this will keep the tax man busy with simple open and shut IR35 cases, and will leave us lot alone!!!

I doubt it, but I'll offer one that they could look into.

What about the IR35 status of the IT boss at HMRC, who is paid through a Ltd company? I wonder if he'll be sending a substitute in, or whether it would be allowed....

ThomasSoerensen
9th February 2012, 09:38
I see this a corporate darwinism.

If you are not able to get your accounts done and pay taxes etc. then in a few short years you will be bankrupt and eliminated from the corporate universe.

Only the ones who have a bit of common sense survive.


I find it laughable that people just jump in head first without doing any research.

Bozos.

d000hg
9th February 2012, 09:43
What?

You mean it's difficult to understand that all the money isn't yours?

I really must be a Mensa candidate since I got that concept from day one.:eyesBully for you.

You seriously can't see the difference between university educated sciencey nerds and a middle-aged mum selling cross-stitch on her Wordpress site that her son built for her?

FiveTimes
9th February 2012, 09:48
Bully for you.

You seriously can't see the difference between university educated sciencey nerds and a middle-aged mum selling cross-stitch on her Wordpress site that her son built for her?

load of crap, both should know that they have to pay tax.

MrRobin
9th February 2012, 09:50
The issue here is probably that she thought she was rolling in it any future tax demand could come out of future earnings so she doesn't need to save any right now... Work dried up and she was tuliped.

Dumb? Yes, but probably what a lot of people would do, particularly the young.

ThomasSoerensen
9th February 2012, 09:52
The issue here is probably that she thought she was rolling in it any future tax demand could come out of future earnings so she doesn't need to save any right now... Work dried up and she was tuliped.

Dumb? Yes, but probably what a lot of people would do, particularly the young.

That does not make it any less dumb.

cojak
9th February 2012, 10:31
Permies are insulated from tax by PAYE. They see money in the bank every month that's theirs to spend as they like.

I'll bet most of these people didn't give tax any thought at all.

Or thought that the tax fairy took care of that for them.

mudskipper
9th February 2012, 10:37
What's this tax stuff? Should I be putting money aside for it?

cojak
9th February 2012, 10:39
Er, don't the deductions on your permie payslip sort of give a slight hint that all the money isn't yours?

Only if they bother reading it.

Notascooby
9th February 2012, 10:41
What's this tax stuff? Should I be putting money aside for it?

Don't worry - it's something to do with IR35 (Inland Revenue 35%) if you're not caught then you don't have to pay anything.

Oh if you're on the FRS (Free Random Spending-Money) then you can forget about VAT too :banana:

HTH

:D

FiveTimes
9th February 2012, 10:42
Or thought that the tax fairy took care of that for them.

Are you saying the tax fairy doesn't exist :eek

Pondlife
9th February 2012, 10:43
What's this tax stuff? Should I be putting money aside for it?

I've changed my name by deed poll to pondlife consulting ltd. Therefore any money in the company account is mine.
:D

Spacecadet
9th February 2012, 11:06
I've changed my name by deed poll to pondlife consulting ltd. Therefore any money in the company account is mine.
:D

don't you just insist on cheques and then pay them straight into your personnal account?

Scrag Meister
9th February 2012, 12:53
In business I run 3 accounts, Current, CT, VAT and that works fine. Also have a personal income tax account that accrues money when I need to.

Even my 18 year old son uses one of my accounts in my name, that he pays money into for running his car, you know insurance, tax, 1 service a year.

Means that he can't touch the money unless I let him. Works well, and has been the case for my older kids in the past.

May not be tax, but means a smoother ride when the expenses arise, same in principle.

Sysman
9th February 2012, 13:12
Permies are insulated from tax by PAYE. They see money in the bank every month that's theirs to spend as they like.

I'll bet most of these people didn't give tax any thought at all.

Or thought that the tax fairy took care of that for them.

I gather it happens to a lot of self employed people. The tax man will estimate earnings if books aren't done on time, and they will definitely over estimate. I went through this loop due to an unreliable accountant, and the tax man told me "Tough. Sue him for the tax you have overpaid."

Sysman
9th February 2012, 13:15
Er, don't the deductions on your permie payslip sort of give a slight hint that all the money isn't yours?

Sort of. Then they hear other folks who work for themselves down the pub bragging about how little tax they paid and how much their accountant saved them, so think they'll get the same treatment.

d000hg
9th February 2012, 14:40
load of crap, both should know that they have to pay tax.Does it say people don't know they have to pay tax? Or that they fail to account for how much tax and set the money aside.


That does not make it any less dumb.Wow, headline news: people on average aren't hugely smart. What a revelation. Keep them coming... I can never remember does pizza make you thin or fat?

The gov wouldn't have run that "tax doesn't have to be taxing" campaign if people didn't think it was.

With payments on account and how far in arrears you pay CT, it's easy to get confused. That's why we have accountants. I hope all the overly superior posters in this thread do their own accounts, it's so simple that paying someone would be a waste of money.

Platypus
9th February 2012, 14:58
I see this a corporate darwinism....Only the ones who have a bit of common sense survive....I find it laughable that people just jump in head first without doing any research....Bozos.

Who's the bozo? She had and spent £174k of tax money. Now she's bankrupt, the debt vanishes. I doubt she'll be out of work going forward, so life continues as before.

Nice! :yay:

amoeba
9th February 2012, 15:23
Who's the bozo? She had and spent £174k of tax money. Now she's bankrupt, the debt vanishes. I doubt she'll be out of work going forward, so life continues as before.

Nice! :yay:

Is it that easy though - doesnt going bankrupt mean you cant run a company for X years and cant even get a bank account for a year or so?

Sysman
9th February 2012, 15:55
With payments on account and how far in arrears you pay CT, it's easy to get confused. That's why we have accountants.


the self employed don't do payments on account, at least not until 18 months or so after they have started
the self employed don't pay corporation tax

Platypus
9th February 2012, 16:12
Is it that easy though - doesnt going bankrupt mean you cant run a company for X years and cant even get a bank account for a year or so?

There are some complications, but fewer than you'd think. You can have a bank account immediately.

The disadvantages are outweighed by the £174k advantage!!

d000hg
9th February 2012, 16:23
That statement's so dumb it takes your breath away.And you're an arrogant arse. Try taking a walk in the real world rather than in your clique of university-educated middle-class friends.

TheFaQQer
9th February 2012, 17:05
And you're an arrogant arse.

Phone call for a Mr. Kettle.

Paging Mr Kettle.

vetran
9th February 2012, 22:43
She is a Thespian, they have an IR35 get out of jail free card with Hector.

The actors union did a deal years ago.

If only her employer had given her some tax advice. Now they will have to pay her tax if HMRC have any sense. By employing her without the insulation of a Ltd they are still responsible.

Bet HMRC bottle it.