If you’ve made the decision to become self-employed and are subcontracting to a business, the tax side of your payroll can feel like a minefield. When you are employed, you are part of a PAYE scheme, and all of this gets sorted before it even hits your bank so trying to navigate doing this for yourself can be overwhelming. Taking the step away from either corporate work or the armed forces and entering the subcontracting world is a big change and your tax responsibility is just one element of that shift.
What are my responsibilities?
We all know that we need to pay tax at the correct rate to the HMRC. When you’ve not had to do this for yourself before, it can be a worry. You might be asking questions such as what is the right tax code, how much should I pay, what are my national insurance contributions? On top of this, you have a duty to ensure you have the correct public liability insurance that will cover you for anything that happens whilst working. No one wants to get this wrong as there are penalties when we don’t meet our tax, NI and insurance responsibilities.
Annual tax return
Many people choose to deal with their tax return when they’re self-employed after the end of financial year in April. This can however present you with a large bill and if you’ve not been keeping track of your earnings this could come as a shock. It’s a big shift from being employed to self-employed and the uncertainty around subcontracting can be stressful enough without worrying about putting away your tax or potentially getting in trouble with HMRC. The admin and paperwork side alone could feel like it’s a lot to think about.
Alleviating the headache of taxes
The good news is the contractor effectively becomes your employer. They need to be C.I.S. registered and then you can carry out work through them. Pebble becomes the employer and they are engaged by our contract services. In addition to this, by using a payroll company such as Pebble Contracting, you have a safeguard in place as we will advise you of all your liabilities and take care of them for you. Everything from your paper trail – or weekly remittances – to the right tax is fulfilled by us. Our experience ensures you are correctly covered for your public liability insurance. We take care of all of that as part of our service and the only part you would need to take care of is NIC by paying class 2 contributions. Once you register with us, we are on hand to support you and provide answers to all your questions so you can focus on starting your new career as a subcontractor.
