Employee - Self-Assessment - dis/advantages?

littlebee

Hello,

Following on from another query I had in another forum, I was wondering what are the advantages/ disadvantages, as an employee, registering for self-assessment?

Many thanks

nompere

Unless you're a proprietary director, or you have significant non-PAYE income Revenue won't put you on self-assessment.

If you are on self-assessment there are three main disadvantages as I see it:

1) If you don't file a form 11 on time you will be surcharged.

2) If you have a current year tax liability you have to pay it - there's no scope for having it collected by a reduction of your tax credits

3) You need to pay preliminary tax for the following year if you have a current year liability, unless you are very confident about your forecasting skills in relation to income of a year still to end.

I can't think of any advantages to being self-assessed.

littlebee

Thank you for that.

It's not my choice but how my new employer wishes to do things - I invoice them my 'fees' every month (it's a set monthly salary, set hours) and do my own taxes.

When I receive my draft contract next week, I will contact the Revenue.

Do you by any chance, know why a company/ organisation would do things this way? Yes, they don't pay employer PRSI, but are there other advantages for them?

Many thanks

Loughc

littlebee wrote: »

Do you by any chance, know why a company/ organisation would do things this way? Yes, they don't pay employer PRSI, but are there other advantages for them?

Many thanks

They are not tied by Employment Law with you, then don't have to give you notice, Holiday Pay or spend money on your well being as an employee, i.e. Medical care/social outings.

littlebee

Thanks loughc.

Yes, but they are providing me with annual leave, sick pay, notice, probation period etc. Al standard employee stuff, just requesting me to self assess.

Thanks for your input. Once I get draft contract, I will contact the Revenue.

tina1040

Sounds like you're not allowed to self assess given your working arrangement. Sound like you should be an "employee".

Loughc

tina1040 wrote: »

Sounds like you're not allowed to self assess given your working arrangement. Sound like you should be an "employee".

Completely agree with this.

OP it does indeed sound like you should be an employee and not a contractor as per;

http://www.revenue.ie/en/tax/rct/determining-the-correct-employment-status-of-a-worker.html

littlebee

It's a grey area, I know. I have done a lot of research and self assessment doesn't necessarily mean you are a contractor/ self employed - there are many other considerations.

I just really want to understand their reasoning - having me as an employee but self assessing (apart from obvious) and what the implications for me are.

Thanks all for your input