New kitchen? Good price or ripped off?

Discussion in 'Kitchen Fitters' Talk' started by Sheila Barnes, Apr 23, 2019.

  1. ESPlumb

    ESPlumb Member

    How can you say that he “probably doesn’t pay much tax”? A self employed tradesman pays the same tax as anybody else. If he takes a wage he gets taxed. He he makes profit he gets taxed.
    Some people seem to think that whatever you pay a tradesman goes straight in his pocket.
    What about all the other costs that a self employed tradesman has to pay? Having a vehicle, diesel, tax, insurance, tools, liability insurance, advertising costs, accountants etc.
     
    Paulie1412 and Jord86 like this.
  2. robertpstubbs

    robertpstubbs Screwfix Select

    A self-employed person pays tax on his profit ie his turnover less his expenses.

    But the rules about what he can class as expenses are much more generous than for an employed person, eg in relation to vehicles and travel. For instance travel to work is not an allowable expense for an employee.

    On the other hand the self-employed person has to do lots of admin, doesn’t get sick pay, and has to organise and pay for his own pension.
     
  3. furious_customer

    furious_customer Screwfix Select

    Was are also assuming that we worked a full 8 hour day every day.
    If so, that would be a first for any tradesman I've ever known! ;-)
     
  4. robertpstubbs

    robertpstubbs Screwfix Select

    Another disadvantage for the self-employed is that it is harder to prove income for the purposes of mortgages and other credit.
     
  5. robertpstubbs

    robertpstubbs Screwfix Select

    I think when you employ somebody you have to give them about 4 minutes break per hour they work. In my experience they expect half an hour to wake up, half an hour for a coffee break, an hour for lunch, another hour for errands, half an hour for a tea break, and then expect to get off early because they have worked so hard.
     
  6. gas monkey

    gas monkey Well-Known Member

    Had a plaster on one job missed his burger in the morning getting the plaster from b and q on way to jobs, I had the plaster on site only needed plastering done he still thought turning up at 9 was ok so he could have his burger until pay day 5 hrs short
    If price fair enough explained still not happy
    Next time gave me a price and carried on as he liked but finished three times a 6 still not happy so we parted company
    basically wanted a hr rate on price terms good if you can get it
     
  7. furious_customer

    furious_customer Screwfix Select

    The last plastered we had in doing work was so efficient that he finished by 4,30pm, but was already in the pub by 3pm.
     
  8. gas monkey

    gas monkey Well-Known Member

    If on price and job done no prob
     
    furious_customer likes this.
  9. robertpstubbs

    robertpstubbs Screwfix Select

    My father was a civil engineer on large projects in Glasgow in the days when labourers and trades were paid cash weekly on Thursday mornings. He said he wished they wouldn’t come back after lunch.
     
  10. ajohn

    ajohn Screwfix Select

    A lot of that applies to every body and self employed do get sick pay if they have registered and paid up. Few people get a free pension also the days where companies chipped in and the employed also did have long gone - companies call it a pension holiday hence so many pension fund shortfalls. Actuaries that should check that sort of thing often don't really just say ok. Hence one of the reasons for the recent introduction of new pension laws for the employed, Employers complain about it, NHI too, that should have been upped long ago to fund it. ;) The alternative is for salaries to be higher and then all can go private. The pension laws are mostly aimed at a lot of younger employed that haven't taken one out to make sure they do not to hopefully cure the company pensions fiasco.

    Self employed do need to declare a certain amount of income and also charge a certain amount of VAT but many trades can pocket some money that is paid in cash. They are also likely to buy some of their needs for jobs with cash as well. A simple way of keeping track of that is a separate bank account. A dodge that has cropped up with VAT is charging it when not being registered for it.

    The EU keep a VAT database and their is also a way of checking that it is a valid number directly. The only sure way is to check who the number is registered to and that can have some twists.

    Tax in total is a curious thing. Taking an average employed wage earner who does the usual things and spends there money in the usual ways the "real rate" is higher than than income tax suggests it should be. I reckon it probably often works out at 30%, maybe more.

    John
    -
     
  11. gas monkey

    gas monkey Well-Known Member

    30% agree
     
  12. robertpstubbs

    robertpstubbs Screwfix Select

    I don’t think so.
     
  13. robertpstubbs

    robertpstubbs Screwfix Select

    And another benefit to being employed is that you get holiday pay. Roughly speaking this equates to 28 days paid holiday per year, although this does include about 8 days of bank holidays.
     
  14. jonathanc

    jonathanc Guest

    Complete misunderstanding of the last 20 years of defined benefit pensions in the UK...
     
    Jord86 and robertpstubbs like this.
  15. robertpstubbs

    robertpstubbs Screwfix Select

    I wouldn’t condone doing cash jobs, but if one did, wouldn’t it make more sense to pay for the corresponding costs through through one’s legit suppliers, and therefore reduce taxable profit? Or use business supplies to refurbish your own house?

    I can’t understand why you would set up a separate bank account to keep track of the transactions you want to hide.
     
  16. goldenboy

    goldenboy Super Member

    Self employed in reality dont get sick pay.

    I wouldnt even know how to claim the pitiful SSP

    Whenever I am off unwell (never) or injured (very very rarely) I just have to pile the hours in over the following weeks to make the time up.

    That said I would never go back to being on the books
     
    Jord86, Astramax and chippie244 like this.
  17. Astramax

    Astramax Super Member

    Totally agree, never claimed either.
     
  18. robertpstubbs

    robertpstubbs Screwfix Select

    For a sick employee the employer pays him SSP and reclaims it from HMRC by deducting it from the tax/NI bill.

    But depending on the employment contract the employee may also get Company Sick Pay on top of the SSP, which is much more valuable.
     
  19. ajohn

    ajohn Screwfix Select

    I recollect that there was a lot of shouting when the gov decided to change self employed NI payments to make them more fair compared with the employed. This may not relate to sick pay though. It might relate to state pension. It's a curious area. Take me for instance. I am retired now and was a member of a company pension, that's why I do know all about companies taking pension holidays. I contracted out of the state pension at 21 when I joined the company scheme. In real terms given the return on the money paid contracted in it would have paid me to remain in the full state scheme. In fact financial advisers were pointing this out to people who were in company schemes and contracted out of the state scheme. Best to contract back in providing they are under 40 when they do. The age where that pays is probably higher now. The return is better than AVC's etc. As things stand it was still worth me making contracted out payments as I now receive the company pension and the basic state pension but it could have been better.

    ;) My company pension scheme is actually paid by an insurance company but that's another story. The way that was done allowed the company to take several 100 millions out of the original fund as it was eventually over subscribed. These days taxation changes have more or less ended company pensions or at least closed them to new members. If some one works for the state things are different - lucky them but maybe there have been changes there as well.

    John
    -
     
  20. robertpstubbs

    robertpstubbs Screwfix Select

    There are essentially two types of pension scheme:
    defined benefit;
    defined contribution.

    With defined benefit your pension is based on your final salary, and it is the responsibility of the employer (via the pension scheme) to fund the pension no matter how long you live.

    WIth defined contribution your pension is based on the actual total amount you and your employer have contributed for you over your service.
     

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