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[Closed] whats the difference between 'sole trader' and 'self employed'?

sadexpunk · 2022-02-07T15:57:02Z

my lads a sub contractor for a painter and decorator on building sites. apparently theyre a ltd company and they take the tax off his wage and pay it to HRMC themselves. however, hes disillusioned with the gaffer, he has a bit of ambition and wants to go it alone. hes baffled by tax implications tho and tbh so am i, so thought id ask for some advice and clarification on here. i think at the moment hes classed as 'self-employed'. so to me i dont know why his gaffer would have anything to do with his tax to be honest, why does my lad not get the full pay and sort his own tax and NI out himself? cos to me thats what self employed means. however, hes asked me something about being a 'sole trader' and how it differs, and i just dont have a clue. so, if i tell you his aims, would you be able to advise please? he just wants to be his own boss, pick and choose his jobs, and sort his own affairs out. maybe even do some work for his present gaffer still, but under different terms. if he doesnt like the job or hes messed about he'll go elsewhere, and maybe have a few jobs on the go at once, and possibly (hopefully) even get to the point where hes busy enough to sub work out himself, much the same as his boss does now. hes under no illusions that he may struggle to get customers to start with, but apparently hes well thought of and some of the sites where hes been working have told him theyd be happy to give him the work himself as some of the other subbies with him are a bit er....slapdash shall we say. he's also said that one of his mates has expressed an interest in teaming up with him. that to me would spell danger, as what happens if they fall out, but might it be a good idea if they need capital to get going? so would you be able to advise his best course of action please? self-employed? sole trader? ltd company? what does he need to do to achieve his goal? thanks

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bigfoot

Posts: 656

Free Member

oh ok, interesting. so say hypothetically, his current gaffer wanted to bring his old gaffer alongside to help finish a big job, he couldnt just pay him for his help, he’d have to ’employ’ him for it and pay his tax etc even tho they both own the companies?

in that situation they would probably qualify and be registered to recieve the full money without tax being deducted, i don't know the details and what critea has to be met but you can be registered to recieve full payment.

Posted : 10/02/2022 1:12 am

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