Self Employment, the myths and facts

Self Employment, the myths and facts

The growth is Self Employed Chefs in recent years shows us that many chefs seek the freedom and independence that this form of employment offers, but what are the myths and facts and is it really a bed of roses?

Having been Self Employed for 35years I’m better qualified than most to explain the good and the bad to anyone thinking of taking the plunge into the unknown.

Firstly, why do it? I guess many chefs like the autonomy that it provides, the lack of corporate responsibility in that you often work alone, and you have little or no Management hassle, no HR meetings and no 10 o’clock meetings, you simply turn up and cook.

What about the bucks’. Well this is often the biggest question, is it really as good as what’s made out?

Certainly huge amounts of money, can be made, you can work all the hours god sends, and the pay rate is very much decided by how good a chef you are, Good chefs are worth their wages and will receive return bookings, agents will always place chefs that prove their worth time and again but will often discard the poor chefs who fail to turn up or can't fulfil the requirements of the hirer.

There are 3 basic forms of SE. You can register as a self Employed Chef with the Revenue and receive your UTR (unique Tax reference)
you will also need to consult with an Accountant, keep all your invoices pay and tax details and return to the Revenue Yearly.

The second is favoured by many Agents and working under an “umbrella company” be an advantage as you have NO paperwork. It is all taken care of by the Umbrella Co. However, this is VERY costly, and your net gains are very poor. They claim that you are to be an LTD company, that is incorrect, you will NOT be a limited company but part of a legal tax scam set up by them to gain control of your Tax allowances. BE warned, you can lose many thousands of pounds using this method.

The third is a registered Limited Company, registered in Company’s House in London. You will receive a Company Number and Certificate of Registration. It sounds daunting and it can be quite complicated, so an accountant is recommended (but not essential, it can be done online).

The advantages are huge, as almost every Agent will happily accept an invoice, it is 100% Bona Vide and cannot be scammed or cheated and is accepted more happily by the Revenue.
You are paid Gross, with tax and NI only being paid yearly, but the Tax allowances allow you much greater freedom than any other method and the mileage allowances alone can offset much of the tax your due to pay.

A really good accountant will cost perhaps £2k per year but could save you 90% of the tax and NI that you would have paid, so really a good accountant is well worth it. Even what you pay your Accountant is deductible from your Tax bill, so it’s a no-brainer

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