Self Employed

Question 1

List seven identifiers of being self employed

Answer 1

1. High level of control
2. No set hours, holiday, over time, sick pay
3. Ability to sub contract
4. Takes financial / business risk with ability to benefit
5. Provides own equipment
6. Hires workers
7. Contact for service as opposed to contract of service

Question 2

How are the Self Employed taxed in the first 3 years?

Answer 2

(Year 1) Profits made in that tax year.
(Year 2) Profits for accounting period ending in that year or 1st 12 months profit if not a full year.
(Year3) Profits ending in that year.
Will cause overlap between years 1 and 2 if the business year does not match the tax year, this is reclaimed when business ceases

Question 3

When calculating Net Profit Self Employed expenses must be XXXX and XXXX incured for the purpose of trade and be of a XXXX as opposed to XXXX nature.
Unlike capital expenses they have a shelf life of less than ……years. Employed expenses have the additional requirement if being…..

Answer 3

Wholly / Exclusively / Revenue /Capital / 2 years / necessary.
Stationery, rent, rates, power