New to Contracting: Trading Options

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Pay As You Earn (PAYE) Employee

Everybody who has had a job with a weekly wage or monthly salary has experience of PAYE. This is where the employer deducts from your salary Income Tax, National Insurance, before handing you the remainder. Fixed term employment engagements with an end client (or with an agency) tend to be unpopular with all concerned. From a contractors' point of view, PAYE simply makes no sense – Tax and NI would be paid on your full earnings and you'd be unable to claim travel expenses, whilst the end client (or agency) is subject to UK and European Employment Legislation.

The 1st Option rating for this trading option indicates that;

• It provides virtually no control beyond initially accepting the role and the protection offered by employment law
• Earnings and taxation are fixed and inflexible, without the opportunity to claim expenses or reclaim VAT
• Flexibility is limited to the employers' operating practices and terms of employment
• It's very simple - but otherwise unrewarding

Next>

1. New to contracting
2. Benefits
3. Trading Options
4. - Your Own Company
5. - PAYE Employee
6. - Umbrella Employee
7. - Self Employed
8. - Summary
9. Running Your Company
10. - Getting money in
11. - Expenses
12. - Payroll
13. - Bookkeeping
14. Costs
15. Next steps
16.  

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