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    audrey obarisiagbon
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    This document discusses self-employment versus employment and outlines some key differences: 1) Self-employed individuals have greater tax advantages than employed individuals as a wider range of expenses can be deducted against income and income tax is paid later. 2) The main distinguishing criteria between employed and self-employed are factors like control over work, how remuneration is determined, who bears financial risk, who provides equipment, performance management and correction, holidays and sick pay, and exclusivity. 3) To avoid being classified as an employee, an individual may form a personal service company to hire their own services, though anti-avoidance legislation addresses this.

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    ACCOUNTING NOTES

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    This document discusses self-employment versus employment and outlines some key differences: 1) Self-employed individuals have greater tax advantages than employed individuals as a wider range of expenses can be deducted against income and income tax is paid later. 2) The main distinguishing criteria between employed and self-employed are factors like control over work, how remuneration is determined, who bears financial risk, who provides equipment, performance management and correction, holidays and sick pay, and exclusivity. 3) To avoid being classified as an employee, an individual may form a personal service company to hire their own services, though anti-avoidance legislation addresses this.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    5 views2 pages

    Accounting Notes

    Uploaded by

    audrey obarisiagbon
    This document discusses self-employment versus employment and outlines some key differences: 1) Self-employed individuals have greater tax advantages than employed individuals as a wider range of expenses can be deducted against income and income tax is paid later. 2) The main distinguishing criteria between employed and self-employed are factors like control over work, how remuneration is determined, who bears financial risk, who provides equipment, performance management and correction, holidays and sick pay, and exclusivity. 3) To avoid being classified as an employee, an individual may form a personal service company to hire their own services, though anti-avoidance legislation addresses this.

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    © All Rights Reserved
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    of 2

    Lecture 7

    Employment Self Employment


    self employed have a greater tax advantage than those
    employed
    a wider
    range of expense is allowed against income
    income tax is paid later than those employed
    A contract of service employed
    A contract for services self employed
    Distinguishing Criteria
    These include
    control
    remuneration financial risk
    equipment
    work performance G correction
    holidaysg sickness
    exclusivity
    Jersonal service company
    To avoid being classed as an employee an individual may
    form a personal service company hire their own services
    in the name of the company
    Anti avoidance legislation is used to thwart off payroll
    working
    Also legislation to deal with managed service companies

    Basis Of Assessment
    Employment income is assessed to income tax when it is
    received
    Not necessarily the year its earned
    income is normally deemed to be received on the earliest of
    the date the income is ace received by the employee
    the date the employeebecomes entitled to receive the income

    Employment Income
    wages salaries
    bonuses commissions fees
    expense allowances
    lastcheques
    pensions
    benefitsin kind
    certain socialsecuritybenefits
    Non Taxable Employment Income
    trivial benefits under 50
    free subsidised meals in a staff canteen
    staff canteen
    provision ofparking etc
    Approved Milli age Allowance
    Employeesusing their own vehicles to commute to work may
    relieve tax free millage allowance as long as they don't
    HMRCs limit ex eed
    For 2022 23 the approved rates for motor car vans are 45p m
    for the first 10,000 mile of business travel per year 425pm
    thereafter
    If the millage allowance received exceeds AMAP the excess is
    taxable
    If the millage allowance received is less than AMAP the deficit
    is a deductable expense

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