My husband has just started a new job but is required to invoice the company the hours he works where he'll then be paid at the end of the month. This means that he will have to register as self-employed. The min number of hours are guaranteed so we know what money he will bring home at the end of the month but how do we work out the tax and NI and will this effect our IVA's? He wil be earning around the same amount of money as his last job.
Hi
He will need to ring HMRC and register as Self Employed and they will set up a DD for him to pay Class 2 NI Contributions which is a relatively small amount, at the end of the tax year he will need to complete Self Assessment Tax return and will then pay approx 8% of his net profits. The best way to work out his tax if this is his only income is to deduct £540 per month from his pay and calculate 20% of what is left, this will be his tax liability at the end of the tax year, This may be reduced if he has expenses from his self employment. Hope this helps
I use website www.listentotaxman - which gives a good idea of the levels of statutory deductions - even though it is geared to employed rather than self-employed people.
