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P60

I Thought I was Employed | Am I Employed or Self Employed
I thought I was employed! 758 513 Stepping Stones Accountancy

I thought I was employed!

This article focuses on the importance of having the correct employment documentation in place. All characters are fictional for explanation purposes.

Jamie was working on behalf of XZY Ltd, all work activities were agreed verbally but no written and signed contracts were put in place. Jamie worked at home, in the offices of XYZ Ltd and at customer sites. He was provided with a laptop, business stationery and a company credit card but had no formal induction, no company handbook and did not have a dedicated desk space.

When initial discussions were held it was proposed that Jamie would become an employee and he was sent a payroll form by XYZ Ltd. However, Jamie did not return the completed form or any details regarding his preferred employment status. During the first 4 months various discussions were held about employment for an agreed working relationship but nothing was finalised, although a couple of e-mails were sent.

The last e-mail thread was what both Jamie and XYZ Ltd were adhering to, it stated that the salary would be based on a tiered commission basis but again no written agreement or formal employment agreed because Jamie was too busy to arrange it.

Although he did not have any written agreement Jamie believed he was employed by XYZ Ltd and had an official contract with them. However, when he contacted HMRC to request a copy of his P60 he was advised this was not possible. After several frustrating months Jamie was then advised by the HMRC that under the s8(1) Social Security Contributions (Transfer of Functions) Act 1999 he was classed as being self-employed. This meant he was not entitled to any of the employee benefits such as sickness pay, holiday pay, pension, etc.

There are some discrepancies between employment and tax law when it comes to employment status. However, the lesson is very simple; you are not employed until you have a written and signed contract.

If you need some help, advice or guidance in regard to being a contractor or an employee please feel free to call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

Gain Control of your Self Assessment | Help with Self Assessment | Self Assessment Hints & Tips
Gain control of your self assessment 758 513 Stepping Stones Accountancy

Gain control of your self assessment

It is surprising how a to-do list can achieve so much. The art of writing down a list of actions and then following them through to completion is nothing new but it still remains an incredibly powerful tool for efficient people. So how can this method help you get control of your self assessment?

Quite simply, if you follow some specific instructions to a set timeframe every year then you will have complete control of your self assessment. For example, if we look at the period of 2021 to 2022, it really is a very simple process based on 5 key steps:

  1. Monthly – keep track of all your monthly business transactions, logging a record of invoices, receipts and expenses.
  2. Register for self assessment by 5th October 2021 (if you have never done this before)
  3. When filing online submit your return by midnight on 31st January 2022
  4. Ensure relevant tax payments are made by midnight on 31st January 2022

In order to complete the self assessment you will need the following:

  • Your 10-digit unique taxpayer reference (UTR)
  • Your national insurance number
  • All details of your untaxed income for the period 2021/22 (this will include income from self-employment, dividends and interest on any shares
  • All records of expenses in relation to self-employment
  • Charity or pension contributions that should be eligible for tax relief
  • A P60 or any other records to demonstrate how much income you have received which has been paid on

Keeping in control of your self assessment can be a very simple exercise just follow your to-do list. Otherwise simply delegate and get your accountant to look after it for you.

Should you have any questions or need any help in relation to your self assessment please call us on 01173 700 079 or e-mail hello@steppingstonesaccountancy.co.uk.

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