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To De-register As Self Employed Or Not

To De-register As Self Employed Or Not

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Hi All

I am getting more and more self assessment clients, majority in the construction industry and I need your valuable advice.

As is common in the construction industry sub-contractor sector many are in and out of PAYE and self employment.  I usually advise to keep their self assessment registration in case the PAYE position is short term, however I now have 3 clients who have stayed in their PAYE position for over a year.  One has now been PAYE for 2 years. 

Obviously they are continuing to pay Class 2, and the additional compliance is really a burden they shouldn't have.

When would you advise they de-register?  Is it really bothersome for them to re-apply online?  Not really, but would their UTR automatically be available to deductions again at a drop of a hat?  I.e. if they de-registered and suddenly went sub-contracting again will their UTR still enable them to be deducted at 20% ?

Thank you in advance for any answers.


Replies (5)

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By Tim Vane
13th Apr 2016 20:31

They will not have been paying class 2 since April last year as it is now collected through SA. As they have no applicable SE income they will not be paying it this year at all. As for the SA itself, just ring HMRC and ask them to withdraw the notice to file for 2016. HMRC may still want a return for 2016 but they should be happy to ensure there is no requirement to file for 2017.

They should of course notify HMRC when they start SE again and if they have been good boys I see no reason why they wouldn't return to 20% status.

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By paul_scotland_5
13th Apr 2016 20:46

So Tim

Your advice is to de-register? Or just withdraw notice to file?

Understand about Class 2 this year.


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By lionofludesch
14th Apr 2016 08:49

Small Earnings

Even under the old regime, they could apply for a refund of Class 2 if their earnings were below whatever the limit was for the year in question.

Getting it, admittedly, was a bit more of a long term project.

Hard to advise on this one - it depends on your client's gut feeling about what the future holds.

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By birdman
14th Apr 2016 10:52

SA and CIS

I suspect that if they drop out of SA they'd also need to ring CIS helpline to re-register as subbies if they recommence, otherwise they'll suffer 30% tax. No idea why this is necessary, as surely SA registration alone should be enough, but it ain't!

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By paul_scotland_5
14th Apr 2016 11:13


Exactly Birdman.  The nature of a subbie is that many are living 'week by week' and are not the best with paperwork, their advisor is the last person they would consider calling before accepting their next CIS work.

I'm sure if they were to be suddenly deducted 30% then the said advisor would be high in their sights for blame,for initially advising to de-register.


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