Being my own boss -v- employee

[FredBloggs]

A customer of my employers recently approached me with an interesting proposal. An employee recently left their employment but they reckon I could do the job in 3 or 4 days a week. They are willing to pay me the salary he was on but for a daily rate. This has taken me by surprise but I'm seriously thinking about it. I think I might pick up other work on a contract basis for the other 1-2 days a week.

I would welcome any advice on this - ie being my own boss -v-an employee
Will I have to register for VAT?
How do I pay my tax and what is the situation with prsi?
One thing that concerns me is if I don't work I don't get paid - eg at holiday time or if I get sick
Thanks

 

[ButtermilkJa]

A customer of my employers recently approached me with an interesting proposal. An employee recently left their employment but they reckon I could do the job in 3 or 4 days a week. They are willing to pay me the salary he was on but for a daily rate. This has taken me by surprise but I'm seriously thinking about it. I think I might pick up other work on a contract basis for the other 1-2 days a week.

I would welcome any advice on this - ie being my own boss -v-an employee

What you have to consider is, if the job he is offering is going to last? If you say 'Yes' and then you find out after 3 months that he has no more work for you then your contract can end as quickly as it started leaving you with no income.

Will I have to register for VAT?

Only if you will earn more than the thresholds which require you to do so. See revenue.ie for more on this. You can elect to register anyway which can sometimes be an advantage if you have expenses which you can reclaim VAT on.

How do I pay my tax and what is the situation with prsi?

If you are going self-employed, which is most likely if you will be looking for other employment for the other days of the week, then you will be taxed under the self-assessment system. You will have to pay your own tax and prsi, or engage the services of an accountant to do it for you (which i would advise!).

One thing that concerns me is if I don't work I don't get paid - eg at holiday time or if I get sick
Thanks

This is the most important issue as far as I am concerned. I would not leave the security of a full-time job unless I was 100% sure that I was covered for work for the next 6-12 months at least. If so, then contract rates are generally higher than salary rates and will compensate for loss of income during holidays/sick days.

If you are young and free with little responsibilities it can be an easier decision to make. Obviously if you have a long-term partner and/or kids then this will have an effect on your decision also.