Self Employment

This is meant to act as a guideline to becoming Self-Employed. Please forgive therefore the gratuitous use of the term ' Self-Employed ' !

Whether you are a Vet or a Nurse, before you work on a Locum basis, you will need to establish whether or not you should be registered as Self-Employed.

If you are currently registered as Self-Employed, you will most likely continue on that basis. However, the Inland Revenue (IR) does stipulate that each job you accept is considered on its own merits. Simply because you are Self-Employed in one position, does not mean that you will continue to be Self-Employed. Please consult your local IR Enquiry Centre for more Information. www.inlandrevenue.gov.uk/enq/index.htm

The Inland Revenue has guidelines that stipulate who can and cannot be Self-Employed. These are set out in document IR56 Employed or Self-Employed (a guide for Tax and National Insurance) which can be obtained by calling the "IR Self Assessment orderline on 0845 900 0404.

It is your responsibility to comply with the rules set out by the IR. If you are not sure, please make sure you ask.

You can call the IR Helpline for the Newly Self-Employed on 0845 9154 515. If you would like assistance prior to calling the Helpline, please contact us at Owen Tate Ellis either by telephone, fax or email.

PLEASE NOTE: This may all be good and well BUT the practice that you do end up working for may not be able to employ you on a Self-Employed basis due to a number of reasons - Please don't therefore just assume that Self-Employment is the way to go - remember also, you will need definitive proof that you are Self-Employed !

Working as a Limited Company... there is a growing trend shown by many Veterinary Practices presently not to employ locums on a basic Self-Employed basis. This is because the Inland Revenue and Tax Office are finding it increasingly difficult to collect what is duly owed to them by Vets claiming to work on a Self-Employed basis. If these two very powerful government departments cannot satisfactorily collect their dues from these Vets, they will force the Practice that employed the services of that Vet to do so instead. You can see then the reluctance on the part of the Practice!

This is the case presently for any Vets who claim to be Self-Employed but Self-Employment can take many different forms. One way however, to ensure that not only does the Practice happily employ your locum services but also in a way you are able to take the maximum advantage of tax savings, is to set up your own Limited Company. Sounds expensive? Not really!

The Advantages of a Limited Company... as you may or may not be aware, the Chancellor has drastically reduced the Corporation Tax on small companies by bringing in a starting rate of 0% on the first £10,000 of taxable profits.

The reductions in the Corporation Tax rates have led to dramatic savings opportunities by simply changing from a Sole Trader or a Partnership basis to a Limited Company.

As a guide therefore, a person earning £14,615 per annum would have a Self Employed tax bill of £2,775 whereas under a Limited Company structure, they would have a tax liability of nil and actually receive £14,615 in their own hands! That would represent a saving of £2,775 by simply trading through a Limited Company. Every year it seems that there are more tax breaks than the last and Limited Companies, especially small ones are usually the first to benefit from these ! It's also worth bearing in mind that a Self Employed person earning £30,000 per annum would achieve savings of over £3,500.

For any further advice of Limited Companies, please contact a recognised accountancy firm, your local Tax Office or local IR Enquiry Centre. Contacts are above but if you require any futher advice from us before you make any calls, please telephone, fax or email.