Q. What is the advantage of being a sole trader?

The advantage is that as a sole trader, you can enjoy the flexible financial arrangements usually enjoyed by share holding directors of small independent limited companies without the need to form a limited company and all the legal and administrative responsibilities that that would entail.

Sole traders can be around 15% better off than their PAYE counterparts. This is a particularly good option for any freelance operative, second jobbers and those approaching retirement. Although not limited to any type of industry, typically you will find self-employment in education, medical, IT, Industrial, construction and manufacturing.

Under this arrangement, you are paid gross without any deductions for tax or NI but must hold back around 20% of your earnings to cover this. You can use various business expenses to reduce your tax bill when filing your return.

Q. How do I register and work as a sole trader?

If you are new to self-employment you have 3 months to inform HMRC that you are running your own business. You must register to pay Class 2 NI. You will receive an HMRC tax return in April each year and have until 31st January of the following year to pay your tax although you could be assessed every 6 months in arrears.

Q. Who pays the tax and NI?

You work as a sole trader using Futurelink you are responsible for your own tax and Class 2 NI. At year-end you need to complete a Self Assessment Tax Return.

Business expenses are tax-free and are deducted before tax and NI are calculated.

Q. Who pays the VAT?

Futurelink charges VAT on its invoices to your UK clients. If the value of your taxable supplies in the past 12 months or less has exceeded the current VAT registration threshold or the value of your taxable supplies in the next 30 days alone is expected to exceed this threshold, you need to be registered for VAT. You would then need to add VAT to your invoices, and then we would add this amount of VAT to your payment. You can claim back VAT on goods and services that are used in the business. Ensure that you keep all receipts.

Q. How do you confirm payments made to me?

Not only will you receive a remittance slip in the post with a full breakdown of your earnings, you will also receive a free text message confirming your payment and when the funds should clear in your account. Texts are only available to those who are paid by BACS or CHAPS, where we have a record of your mobile number.

Q. What is a Bacs payment?

This is a transfer from our bank to yours, which takes two working days to reach your account (e.g. funds paid out by us on a Friday will reach your account by the following Tuesday).

Q. What is a Chaps payment?

This is a same day payment from our bank to yours. However, it can take up to close of business on that day (i.e. 5.30-6.00 pm depending on your bank or building society) to clear. PLEASE NOTE: It is not an instant payment when it leaves our bank – it just means that it will arrive sometime that day. An additional charge of £10 will apply per transaction for this service. If required, a one off CHAPS can be arranged.

Q. What are your fees?

Our fees vary depending on the invoice total and start from as little as £5.00 per week.

Q. Do I need to complete a tax return?

Yes. Once you have registered with HMRC as a sole trader they will automatically send you a self assessment tax return to complete. Here you can detail all of your work related expenses which should then reduce your overall tax liability. If you require assistance in completing your tax return please contact us on 0845 620 9255.

Q. Do you provide any insurances?

Yes. You are automatically covered for Employers and Public Liability Insurance upon registration with Futurelink at £10 million and £5 million respectively. Professional Indemnity Insurance can be provided, if a requirement of your contract, at £11 per week and only applies the weeks that you work. Site Accident Insurance is automatically provided at a very competitive rate of £1.50 per week, only for the weeks worked.

Q. Is there a benefit for referring friends and colleagues?

Yes. If you introduce a friend or colleague to our services and they payroll with Futurelink for a minimum period of 6 weeks you will receive a bonus of £50 per person you refer.