I will shortly be registering as self-employed and wondered if you good people could offer any advice on registering, self-assessment, any pitfalls I need to avoid etc. If so it would be much appreciated.
No I am sure its all very confusing...listen...when the word TAX is mentioned...I just glaze over and naively hand it all over to my accountant....who is driving a much too exspensive car for my liking!!!
I now have to do 2 days of accounts for VAT....yuk!
Just to respond to Angela, a few posts back (!). Nigel is pretty much correct that you should be registering for the simple reason that, if you are working self employed at any level, have invoiced for payment etc., then you don't want to be fined for not registering. Still, it's almost certain that you won't actually have to pay any tax (unless you win a massive contract in the next few months!) because the money you've earned from your self-employed contracts will surely not top the Personal Allowance, by the sound of things, particularly if you are deducting expenses from earnings. You will probably, in fact, declare a loss, and this means you will almost certainly (like many a penurious actor) be of absolutely no interest whatsoever to the tax office. So, yes, register, but don't sweat it, in my opinion.
you must register for class two self employed national insurance (do it by direct debit it's less painful that way but it's not much anyway just 2.65 a week)
http://www.hmrc.gov.uk/working/intro/class2.htm#1
VAT has a threshold of 73,000 going up to 77,000 this year, so very few actors earn that much, that's 1500 a week every week! You need to be a soap regular to get that. So don't register for VAT unless you are really earning!
I was referred to the film and tv industry advice team at HMRC who advise that as an actor you are registered as self-employed for tax purposes, but employed for national insurance purposes, and therefore this is taken care of by the employer for any particular project, and it is automatically class 1.
They said therefore I don't have to register for class 2 contributions or I would be paying twice.
Just wanted any opinions on this as others on here have said differently, but that came from HMRC directly.
Well I'm working in holland at the moment so no NI is being deducted here so I pay my few pounds a week to keep me covered, it's only this last year that any NI has ever been deducted from panto earnings, etc etc etc so I play safe. For a couple of pounds a week I think its worth it.
This was the question I raised before. I think it must just depend what kind of work you are doing through the year. I have paid National Insurance at source for all my acting work, therefore if I'd paid class 2 contributions I would have paid too much. Also If you work regularly in a PAYE job when not acting then you will most likely be paying enough NI.
When I registered self employed 6 years ago, I had to fill out a small earnings form, which then meant I didn't have to pay class 2, but I've never filled one out since. That was what I was confused about, whether I should be, but I've never been sent another. Paying class 2 is only required if you are earning money but not paying NI (and earning enough to go over the threshold) , of course this can change throughout the year which might get complicated.. What I'm keen to know is if you haven't paid enough NI will your tax return calculate this, and if you've paid too much will it be refunded automatically, as with tax. Someone once told me you have to apply to get your NI back, which is why I prefer to not start paying class 2 contributions until I'm in a job where I absolutely have to.
Here's a variation: What's the difference between "registering" as self employed, and just declaring self-employed income on the self-assessment form? Does declaring self-employed income automatically "register" you?
For the last many years, alongside the acting, I've also been employed by a firm for whom I do regularish casual work. They deal with their tax through PAYE, and I pay NI through them. I then just declare that - and my self-employed earnings - on the return. HMRC seem happy, as I'm declaring everything.
Can someone explain the distinction between registering and simply declaring self-employed income? Especially given that I'm not "just" self-employed (same with lots of people, I should imagine)
If you received the self assessment form to fill in, then you must be 'registered' as self employed. If you hadn't initially registered then you wouldn't be expected by the HMRC to fill one in.
The work you do casually, you said you pay NI through them, do you also pay tax? If not then that is still self employed income, just not for NI purposes.
Basically what the HMRC told Xander about actors being self employed for tax purposes and not National Insurance, is usually the case if you are doing regularly lengthy work with any kind of contract. That's why Equity get a bit annoyed with touring companies that pay one off fees and don't pay National Insurance, as they should be if it's regular work over a number of weeks, and the actors are required full time.
Work that actors have to invoice for payment, where you don't pay National Insurance, should usually just be shorter contracts, where you are not required on a regular basis. I'm assuming adverts and short TV jobs are paid in this way, but I haven't got that experience to comment.
I recently learnt this from my friend who runs a TIE company as I couldn't understand why some acting jobs took NI and some didn't. For example when I did work for him as an actor I paid NI, when I directed one of the shows, I had to invoice him. He explained that if you have regular work and a contract, then you are technically an 'employee', even though self employed for tax purposes.
When you're self employed you need to pay class 2 and class 4 NI contributions. This guide by the Tax Office clarifies things a bit https://www.gov.uk/national-insurance/overview
I work a lot on one off contracts (roleplay, film, adverts, etc) where I invoice for the fee and I am responsible for my own tax and NI. I pay weekly class 2 payments to cover the NI on this.
I also pay class 4 NI on my self employed profit. In order to avoid paying class 4 NI again on theatre tours where the company has deducted NI, I fill in an employed form for this work (as it is employed for NI). This isn't the only way to do this, but this is how my tax office advised me to avoid paying NI twice on this work.
If you're not paying regular class 2 NI, It's worth checking you've paid enough NI in a year to qualify for full benefits. I first started paying weekly NI when my brother became seriously ill, but hadn't paid enough NI to qualify for full sick pay. I wanted to make sure I'd never be in that position.
I've always had to apply for NI rebates and any exemption forms.
This is the real problem, that it is legislation and not science, and so even amongst the officials there are no constant laws of science there are onlyinterpretations of legislation and conflicts of advice arise.
The chances are we will all do jobs like the ones mentioned above, where we invoice and don't pay NI. This year alone, tour of Italy, no NI, job at sea No NI, tour if Holland No NI, numerous one off jobs with invoices No NI,
I worry about the future, I'll need a pension of some kind at the private pension I've been paying into since I was 26 isn't worth the money I've paid into it.
I suppose I'll still be tottering around at seventy in panto :-) who said that's not far off???!!!
Stephanie, thanks, that's helpful. Yes, I pay tax through the employer as well as NI, so I'm "employed" with them.
The reason HMRC send me self-assessment forms, funnily enough, has nothing to do with self-employment. Many many years ago, in a former life, I had a conventional and very well-paid job. Sufficiently well-paid that it tipped me (briefly) into the higher tax bracket, so HMRC duly sent me the forms, as they like "higher" earners to declare stuff, even though I was a normal PAYE employee.
I've been doing a tax return every year ever since, from long before I had any self-employed income. Once HMRC have you, you never escape!
Nowadays, of course, the entire income, employed and self-employed, is so miniscule that it probably costs HMRC much more to process my form than they make from me in tax :)
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