Did you know that LITRG offer specific guidance for people in certain roles?
Starting a new job can be daunting, especially in sectors where pay, tax or benefits can be more complicated than usual. As well as having lots of helpful guidance on our website for people on ‘pure’ employment or self-employment scenarios, we also have help and support for people in specific jobs or situations, where we know there are bound to be questions!
We know that there will potentially be a lot of new recruits in coming months into sectors like care, construction, and haulage. We also know that in some sectors – including these three – a person’s pay, tax or benefits position may not be straightforward!
So, if you are a new recruit and you find yourself wondering about any of the things below… we can help you as we cover all these questions, and more, in our guidance!
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If I am paid under CIS, am I employed or self-employed
If you are genuinely self-employed in the building or construction trade, then you should pay tax under the Construction Industry Scheme (CIS). If you are an employee, CIS should not apply to you.
Under CIS, tax is withheld on payments made to you. This is different from other self-employed individuals not within the construction industry, who normally receive their payments gross, which means no tax is deducted.
Our guidance on CIS explains what the CIS is, how you register for the CIS and how your tax position works under the CIS.
Will I get paid my travel time if I’m a care worker
Care workers are often paid by reference to 'contact time only' and perhaps with a small mileage allowance on top, even though you may spend a lot of time driving around.
This may be confusing in itself but can also impact on your tax and benefits.
We have developed some guidance and a factsheet especially for care workers that can help you better understand the minimum wage, tax, and tax credit positions, as these can be very complex due to the nature of care work and the travel patterns involved.
How will I manage my tax position if I start doing delivery jobs through an online platform?
If you earn extra cash by using one of the many available online platforms to, for example, offer rides, run errands, make deliveries, or do something else, then you are probably being treated as self-employed for tax purposes.
Although this is a developing area of the economy, it is important you are on top of your taxes from the outset, so that you don’t accidentally make any mistakes. The starting point is that the money you receive from such jobs is usually taxable, even if you receive cash as payment or do it as a side job. If the ‘gross’ amount before any fees, commissions or other expenses, comes in at less than £1,000 – then it may not be taxable due to something called the trading allowance.
In our guidance, we tell you the main things you need to know around things like deductible expenses, tax allowances, record-keeping requirements and National Insurance contributions (NIC).
In a separate article, we discuss the recent ‘Uber’ employment status judgment and what it might mean for those in similar platform working positions.
I’m an HGV driver, why is everyone talking about IR35?
Until recently, there used to be a trend for people to set up a limited company to work through and to pay themselves in dividends, as this meant that they could pay less tax than if they were just paid a salary and taxed under Pay As You Earn (PAYE). Lots of HGV drivers used to do this, even though they were working, in effect, as an employee.
The government thought that there was a loophole here and, by changing the ‘IR35’ rules, closed down the tax savings from April 2021. Some HGV drivers’ take-home pay will have gone down as a result. ‘IR35’ is therefore a very hot topic!
In a nutshell, from April 2021, only owner-drivers (those who own their own vehicles and do deliveries on a freelance basis) may be able to set up limited companies and continue to make tax savings. HGV drivers that work for someone else or an agency, can still be set up limited companies but probably can’t make any tax savings. We explain more about the situation in general, in our guidance on working through a limited company/IR35.
I’ve got a job in a warehouse, but through an agency – what do I need to look out for?
There are lots of opportunities in retail and hospitality and so on. One quick and easy way to find a job in these sectors (and others) is through an agency. Obtaining temporary work via an agency can also be a good option if you are struggling to find a permanent job or do not want to tie yourself down for too long.
However, there are some complexities to do with your tax and employment law status that you should be aware of if you work through an agency. We tell you more in our guidance.
Things can also get confusing because many agencies don’t like offering a PAYE payroll service for the people they find work assignments for and so they ask them to work through an umbrella company. An umbrella company is an employment business that takes on agency workers as its own employees. They act as an intermediary between a worker and their agency – an agency pays the umbrella company, who then pays the worker.
Some umbrella companies aren’t very transparent about what they do, but there is also a lot of misinformation which gives them a bad name – even the ones that take the welfare of their workers very seriously.
See our website for some clear and independent information (including a factsheet) to help you understand more about working through an umbrella company and some tips on what to look out for so you can avoid any problems.