self-employed...tax free?

[filthiestfis]

A work colleague who is a teacher is telling me that she is planning to declare herself self-employed and that the first 3 months she will not have to pay tax that way. This all sounds dubious to me. Is there any truth to her claim?

[thugulike]

Does your friend work in the UK? She can decalre herself self-employed till the cows come home but it won't mean the Inland Revenue recognise that. Is she a supply teacher or maybe a peripatetic teacher? Even those 2 categorieswill find it difficult as they have to be able to show that they can work when and where they chose, they seyttheir own pay rate and invoice the parents directly. Basically there cannot be any mutuality of obligation between the parties.

If she does set herself up as self employed and it satisfies the IR then she will have to wait to invoice the parents and be paid and then she will produce end of year accounts so it will be more than 3 months before she has to pay tax.

Not a good idea at all!

[msemma]

What? If you are self-employed you pay tax. And NI contributions etc etc. You just pay it in advance of or during the next tax year.

[Loosehead]

She will not escape paying tax, she may well be able to defer the inevitable but tax is calculated and collected on earnings for the tax year, period, it does not matter what entity the individual set's themsleves up as.