A self-employed builder is someone who works for themselves rather than being employed by a company. The construction sector in the UK has a larger self-employed workforce than in any other sector, so getting clued up on what it means to be self-employed is super-important.<\/p>\n\n\n\n
The main difference between being employed and self-employed is probably the freedom that you get. An employer decides when you work, where you work and how much you\u2019re paid. In contrast, when you\u2019re self-employed, you decide:<\/p>\n\n\n\n
But it\u2019s not all rosy. Being a self-employed builder does come with responsibilities that you\u2019re probably not aware of when you\u2019re employed. And despite having freedom, when you first start working for yourself, it can be tough. You need to make sure that you have enough clients to supplement your income. <\/p>\n\n\n\n
And then there\u2019s tax.<\/p>\n\n\n\n
When you\u2019re self-employed, you have to get up close and personal with HMRC. <\/p>\n\n\n\n
You have to declare your untaxed income to HMRC and pay tax on it every year. In order to do that, make sure you get to know the important dates in the year:<\/p>\n\n\n\n
When you calculate the tax you owe, there are three things to keep in mind:<\/p>\n\n\n\n
The Construction Industry Scheme is used by HMRC to collect tax from subcontractors<\/a> in the construction industry. If you work as a builder and you\u2019re self-employed, you\u2019ll be eligible to register for the scheme. <\/p>\n\n\n\n But why bother?<\/p>\n\n\n\n CIS workers benefit from only having 20% tax deducted from their pay. When you\u2019re not part of the scheme, you have 30% deducted. The 20% invariably works out as being more tax than you actually owe so from the first day of each tax year, you can claim a rebate for what you\u2019ve overpaid. <\/p>\n\n\n\n This often works out as about \u00a32000. <\/p>\n\n\n\n