Self Employed Instructing -Help!
 

Just been offered a good position with lots of flying but on the basis that I am self-employed.

I admit to knowing something about flying (!) but not about doing my own taxes.

Any instructors out there know what the procedure is, whether you are better off or not, and perhaps where to go for help.

I already tried my local tax office and got the telephone equivalent of a blank stare!

I don't want to turn down a good job for fear of the taxman...

HighandTight

In another life I was a Chartered Accountant!!

In a nutshell, if you are self-employed then you will be in a much better position. You will be paid 'gross', and 'invoice' for your services. You will pay your tax in arrears on the basis of gross income less expenses. And those expenses can include that blue jumper, the stopwatch, the sub to Pilot etc etc. In other words you will pay tax on less than you would 'earn' on an employed basis.

Also you will pay much less in national insurance.

The risk is to the employer, not to you. If the Inland Revenue visit the 'employer' and decide you are an 'employee', they will want the undeducted tax and national insurance from the employer, not you!! There is always a bit or 'horsetrading' and negotiating between the IR and the errant employer depending on how many years, how many 'employees' etc etc, but the employer always picks up the tab (and very expensive it can be too!!!!).

In summary, the problem isn't yours! Usually, the difficulty is convincing an employer that they won't be 'stuffed' by accepting you as self-employed.

'They' should be phoning the Inland Revenue, not you!!

But one point: make sure that they are covering you for insurance in the event of accident, even though you are self-employed. I suggest getting this in writing.

You of course won't be getting all those wonderful perks such as non-contributory pension and free health insurance as a self-employed person, but in instructing who does?

All the best.

PS I should add that come the time of telling the Inland Revenue about your earnings, you will need to employ the services of an accountant, and please use a qualified one! If you need a recommendation, e-mail me. The savings from being self-employed will more than cover the fees!

[This message has been edited by GRpr (edited 19 April 2001).]

[This message has been edited by GRpr (edited 19 April 2001).]

The Revenue use a number of test to decide whether you really are self employed, such as whther you do as you are told or whether you do as you wish, whether you take the commercial risk or whether the flying school you work for/with take the risk, among other things. Agree that the IR can collect any PAYE and NIC if it turns out you are employed, but they do have the power, and will use it, to collect it from you instead. They are very hot on spurious self employment (witness the IR35 arguements amoungts cheifly IT people.

If you are self employed you have no employment rights and can be disposed of at the drop of a hat. Also no NMW etc.

Excellent point about insurance. Make sure you have adequate insurance for accidnet negligence etc.

F/o

I will repeat myself.

From a tax and national insurance point of view, the risk is that of the flying school, not yours.

Of course you will have to pay tax, but the PAYE implication is no concern of yours.

On the issue of insurance, may sure it covers personal liability. 95% of flying instructors are uninsured in this respect!!!!

Have to admit I've been instructing for over 18 months and never thought about the insureance side once - its something I have to look into.

Hopefully then I'll save on all the 'essential' equipment I'll have to buy.

BTW GRpr, that emails on its way - cheers!

and remember that your accountants professional fees are also an expense to set against tax.......