Just after a bit of advice please. A client has ask me if I would become part time and go on their payroll. I`m not sure what to do as I like the freedom and flexibility of being self employed.
My question is if I were to taken them up on their offer I would obviously need to submit a P45, now I have one from my last employer (04/07/2008), would I use this or do I need to have a new one ?? I am working as a sole trader so only pay NI, I have not submitted a tax return yet as I have only been officially self employed since July 08 !
I have not been involved in payroll so far, so I am not sure of the correct procedure.
I was in a similar position a few years back and one of my clients at the time offered me a full time position. I'd only been self employed for a few months and had only a handful of clients so I was happy to accept the position and the regular income! Working as a full time employee was so different from having them as a client, and in the end I only lasted two weeks! I also lost them as a client! That was the last time I worked for any one as an employee and I haven't regretted it. As you say having the freedom to do as you please is so important. Not saying that being your own boss is for everyone, but for me it works.
As we are now in the 09/10 tax year, the P45 you have is for the 08/09 tax year and cannot now be used for the payroll. Instead you will need to complete form P46 and wait for HMRC to issue you with a tax code. If you take the job, in April of next year you will receive a P60 which will need to go on your tax return as employment income, along side your self-employed income.
I set up my self employed bookkeeping business in August 2006, workload was struggling a little by August 2007 as some clients were retiring (which I knew when took on) and other clients were short term sorting out backlog and training so in August 2007 I took a part time job 3 days a week, by June 2008 workload picked up so reduced to 2 days then left completely in August 2008 because I had enough workload and did not like one of the bosses.
For me it was a good thing at first until one of the bosses annoyed me (even though the hourly rate was less) it was better then having no work for those days. I would say if you have enough self employed work and this particular client is not paying you the same rate then it will be a tough decision to make (and if you don't accept job as PAYE then they may take on someone else so you lose a client.)
With the payroll side of things my advise would be to work out if you are getting more income from your self employed or client wanting to have you work PAYE (if self employed then best to use personal allowance against the self employment and pay BR with job, I found this easier because then the tax bill not as high and did not notice as much when it came directly out of wages.
My gut instinct tells me to stay as I am. This particular client would test the patience of a saint and although regular income would be great, going back to the old routine of having to negotiating for time off, pay rise etc., is not why I became self employed, so perhaps I have answered my own question !!
