In this section we have tried to cover some of the frequently asked questions and answers for both our Futurelink products.
Specific product questions and answers are listed on each respective page. If you can’t find the answers you are looking for below, then please don’t hesitate to contact us.
Q. What is the advantage of being a sole trader?
As a freelancer, independent contractor or sole trader you can benefit from the kind of flexible financial arrangements usually only enjoyed by shareholding directors of small limited companies. However, you don’t need to form a limited company and therefore avoid all the legal and administrative responsibilities that entails - which is great news! 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. You can be self employed in any type of industry, but typically you will find self employment in the education, medical, IT, Industrial, construction and manufacturing fields.
Being self employed, you are paid gross, without any deductions for tax or NI. However, you 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?
More good news - it’s not difficult. 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. How do I invoice my clients?
We will take care of this on your behalf. You will simply need to provide us with your timesheets or confirmation of the hours you have worked for your client(s) and we will either invoice them directly, or via your recruitment agency (if applicable).
Q. How do I get paid?
When we have received funds from your client/agency, we will pay your money directly into your bank account on the same day.
Q. How do you confirm payments made to me?
If you are registered for our online portal you can access your payment information at any time and view what payments have been processed for you. Otherwise you will 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. This informs you when the funds should clear in your account. Texts are only available where we have a record of your mobile number.
Q. Is there a benefit for referring friends and colleagues?
Yes. If you introduce a friend or colleague to our payroll services and they join Futurelink for a minimum period of 6 weeks you will receive a bonus of £75 per person you refer.
Q. What happens if I get a permanent job or don’t want to be self-employed anymore?
If you don’t want to be self-employed anymore, or you go back into full-time PAYE employment, simply let us know and we will suspend your Futurelink account and any associated services.
Q. What taxes/liabilities do I have to pay?
As sole trader you will be eligible to pay tax on the income you make from self-employment. You will have to pay class 2 National Insurance Contributions (NIC’s) as standard and in addition you may be liable for Class 4 NIC’s on any profits you make.
Q. How much National Insurance do I have to pay?
As at January 2012 the rates are:
- Class 2 NIC’s are paid at a flat rate of £2.50 a week. From April 2011, your Class 2 NIC’s payments will become due on 31 January and 31 July, the same as a Self Assessment tax bill. You pay Class 2 NIC’s either monthly or six monthly by Direct Debit, this will require completing a Direct Debit form, which we can send you if you wish.
If your profits are expected to be less than £5,315 you may not have to pay Class 2 NIC’s.
- Class 4 NIC’s are paid as a percentage of your annual taxable profits - 9 per cent on profits between £7,225 and £42,475, and a further 2 per cent on profits over that amount. Class 4 NIC’s are paid when you pay your Income Tax.