Apologies in advance for the stupid question. So I have an internship these days where I'm getting a fixed amount of money in the end.
The boss initially had said 'the simplest way to do it would be make you contractors' but later changed his mind and said he wanted us to be employees for the duration on some 0-hr contract or whatever for NDA reasons - but he himself doesn't seem too sure either.
Provided the fixed sum I'm getting is guaranteed by another, already-signed contract, would it matter whether I'm a contractor or not in terms of the taxation on my wage? It's £2000 and I have no other income so I'm hoping it's under some sort of threshold.
Being a foreignlad I am terribly unversed in these things and couldn't find anything comparing status between the two so if anyone has been through something similar it would be greatly appreciated.
> It's £2000 and I have no other income so I'm hoping it's under some sort of threshold.
There is a personal allowance of £11,000 per year. If you earn less than that amount, you pay no income tax.
When you receive your pay slips, check to see if income tax has been deducted. Your employer may have applied the wrong tax code and deducted tax that is not owed. If it has, you will need to notify HMRC (the tax collecting agency) to reclaim the overpaid tax.
If you earn more than £155 per week, you will have to pay National Insurance. This will be automatically deducted from your pay. You pay 12% of anything you earn over the £155 threshold.
The benefits and disadvantages of self employment are quite complex. Unless you are earning more than about £20,000, the amount of tax you will pay is roughly the same. If you are self employed you will need to complete a Self Assessment tax return at the end of the year, or pay an accountant to do it for you. Most employed people do not need to complete a tax return, because their taxes are automatically deducted by their employer.
>>6468 Foreign? If you need a visa to keep working here, then maybe it would be best to be employed by your employer, rather than being a self-employed "contractor" offering services (work).
Being a contractor is shitty unless you are earning silly money.
>>6469 >If you earn more than £155 per week, you will have to pay National Insurance. This will be automatically deducted from your pay. You pay 12% of anything you earn over the £155 threshold.
Ah, and this is regardless of whether I'm a contractor or employee, right?
>>6470 It's a short summer stint and it won't turn into a real job after it's done since they can't sponsor me even if they wanted to keep me. So it won't matter I guess.
>Ah, and this is regardless of whether I'm a contractor or employee, right?
If you're an employee, it's automatically deducted. If you're a self-employed contractor, you have to pay it yourself.
The national insurance rules for self-employed people are a bit more complicated and have some useful loopholes, but they're not worth worrying about unless you earn enough to hire an accountant.
