Are we being ripped off? My 2020 wish list for self employment... 

This is reassuring seeing this video as i'm literally starting this week self employed after working for a firm for 20 years as a painter and i have long term work already sorted. Cheers.👍

What brilliant content you have on your channel, mate. These small business vlogs are a real shot in the arm and give one man band operations like myself who is constantly spinning a dozen plates the confidence to know we are not "overcharging" for working our nuts off and producing a damned good end product that we can be proud of. Keep up the good work, and I hope everyone has a successful year.👍

Great stuff Andy.. Nice to hear the optimistic outlook for the future of small business here in the UK .. Happy new year ..👍🏻

Happy New Year Andy. You are tipping my internal scales - this year might have to be the year to make the leap 🤞 Good luck when the house hunt resumes 👍

Great video ! I’m looking to take the leap this year and this has given me a good heads up and a huge boost. 👍🏻👍🏻

Happy New Year Andy......great video. Really enjoying the content and the MeasuringUp podcast....wish you and family the very best for 2020 👍🤝

Another great video Andy - and yeah like every other one man band your advice certainly goes a long way in helping us stay focused. Happy New Year Andy to you and yours 👍

Happy New Year Andy, looking forward to your upcoming videos.

Hi Andy, some excellent advice as usual, but more to the point, some inspirational advice. Thank you. I wish I could have seen this years ago!

Great video Andy, love these small business videos that you do. Happy new year!

Absolutely fantastic Andy. Really interesting. I'm PAYA and have been my whole life. I'm walking the fence with starting a small business for days off and seeing what happens... this def inspires me to push forward. Thank you bud. 👍👍👍

Hi, Andy happy new year to you. Glad to hear normal service resumed next week as I look forward to your video’s Steve

Happy new year Andy, beautiful introduction to this video

Another great informative video! really enjoying your videos regarding self employment and tips and tricks. im 25 and joiner/ site supervisor and toying with the idea and going it alone. im currently weighing up the pros and cons . your videos are helping me , thanks

Great vid, been thinking of starting a business for a while and this is just the type of confidence booster that I need, thanks! 😀👍

So glad I landed on your channel. What a well thought out fair and properly researched video. Thank you so much for the effort you have put into this- It has fairly cheered me up. The single biggest problem I currently have in my business is competing against the 'cash in hand squad' . It effectively gives customers locally such an unrealistic price expectation. Earned my subscription.

A man of very wise words to the trades and to the public. Great video this. 👍

Excellent advice and information Andy thank you. I'm learning so much everyday. 😊

Thank you great post great advice all the best in 2020

In Hungary a sole trader can choose to work under "KATA" where you pay a fix £1600ish/year and you can invoice customers up to £31k-£32k/year. That £1600 is your tax and NI

Really interesting, thanks for doing the research!

Another informative video Andy, thank you 👍

Happy New Year Andy

Another interesting video, Andy! thanks for sharing!

Hey Andy, Happy New year. You're absolutely right about starting a business now, there's no better time.

Thanks. I’m an electrician, and maybe made redundant in the next few months, but looking on the bright side it may work out ok 👍🏻 Always find your channel interesting.

Great upload and great advice I am definitely not charging enough but have months of work ahead of me the two are definitely linked👍

Happy new year buddy!

In the uk we pay 20% tax for a sole trader

Great video Andy, some fantastic information

Andy, this is the best video you've ever put out. I've been saying this for years. People are less and less inclined to pay "fair" rates for goods and services. And it's so detrimental to our economies. It's the same with food. Food has become so cheap, they're practically throwing it at us. And what's the end result? A huge loss in quality and an enormous amount of waste. When I choose a tradesman for a job, I go by references and quality. If it's a little more expensive, in the end, it's worth it.

Great video Andy, could not agree more about MTD.

4 dislikes are those customers that want work done for sweet FA

Great video and extremely enlightening for most people (trades and customers). I'm a Chartered Accountant and have worked in industry and have been self-employed. The tax system in the UK is far from perfect (and I agree totally with your point on MTD, what a mess the government is making of this...what they should have done is kept the old system but asked for monthly updates instead of quarterly and it would make things a lot easier for everybody). Anyway, looking at the various responses you've had from around the world make it very clear that the UK is still a great place to work and live and that we really don't have it bad at all.

I live in the land at the top of your list. Funny thing is that we all complain about being over taxed. I'm sure that we all share that complaint. Happy New Year. Cheers John.

Fascinating analysis. Initially me head exploded at such a ‘low’ rate then I thought about the piss poor revenue numbers. Keep up the great work mate, and... trades charge more... customers stop bitching and value your craftsman’s life.

Top video and great advice

Happy New Year, Andy! I guess 35%.

Very interesting video outside the woodworking box. (more something I expected to see on your other YT Channel to which I'm subscribed as well) What does "making tax digital for self assessment" mean?

Happy new year Andy! Tax system in Greece is insanely unfair making investments and thoughts about starting a new job almost forbidden...

Nice one Andy, remember VAT is only an additional cost to the private individual, if you are charging a VAT registered business, is just part of the merry-go-round, Happy New Year.

Brilliant mate. S/E builder in Dorchester, very eye opening

Great video!

looking forward to your 2020 vids. hny.

I totally agree with your opinion on customers who want a cheaper deal cash in hand or as I get off the older generation senior discount. It doesn't help a business progress and it only gives the customer one option of trader which usually are featured on a well known TV programme. As the moto goes buy cheap pay twice.

Great vidio. I've just been to do an estimate for a bathroom refurbishment, and the first thing they said to me was ," If you give us a good price for this bathroom, we have two others that you can do". I told then that my price is fixed and not negotiable. There reply was ,"you aren't starting on a good standing if you aren't prepared to be flexible". I am insulted when customes ask for discounts. I charge a fair rate for my service, don't rip people off and don't mind paying TAX 👍👍👍

Thanks, you too

I have sort of wanted to be self employed most of my life but I have felt that all the red tape and paperwork needed just to avoid being fined for getting something wrong and the extra effort to keep the government happy is not worth it.

Take into account the fact that an income of £20k puts you in the bottom bracket, as a sole trader or otherwise. If you start making more money then tax increases. I'm not self employed, but I'm pretty sure Corporation Tax is the lowest its ever been in the UK at 19% for incomes (profits) of UP TO £300k. Maybe that could be something to look into as your business grows and you start making more money. Also some advice for people, due to the nature of this channel, if you are going into any form of contractor work in the UK, check out the Construction Industry Scheme (CIS).

Brilliant it's what we all need a reality check now and again. As DIYer and then a Sole Trader when made redundant. I know what you have told us is money in the bank if you keep I simple and straight forward.and honest. I'm now 84.75 when I had to retire due to injury I had a list of return customers 9 months long, some even said they would wait for me to recover, but I had to retire. I'm now getting a workshop built as woodwork hobby den I want to learn Scetchup via your patron group to do it right. Happy, healthy. and hopefully a wealthy new year.

Hi Andy another great video as usual. I was going to quote a job today to be told that someone else has offered to paint the whole room standard size room in emulsion that's ceiling and 4 walls £40 for the whole room wtf crazy no wonder customers feel a reasonable quote is a rip off when you have guys doing jobs at rediculous prices. That has to be a full days work for less than the hourly rate when you take in to account listing fees petrol set up time etc.

Andy, can I post this video to my business Facebook page? I have just started out and want to send the right messages out to potential clients. I am already fed up with the "we only pay £15 p/hr" or similar crap.

I was taxed at 40% and had to pay 40k in tax first year, thought i was going to earn decent money with the hassle i had to put up with, put me right off being self employed, noted you saying no one benefits from Vat but some do, working in the building trade on new build all my Vat was returned to me

The thing about V.A.T being 20% more expensive isn't exactly true. I'm currently not V.A.T registered as I don't reach the threshold, but I have to pay V.A.T on materials that I can't claim back, which means I still have to pass it onto the customer. So all of my materials cost 20% more, therefore I charge the customer 20% more, even though I don't charge or reclaim V.A.T. So a V.A.T. registered company would have to charge 20% more on only the value they themselves add to the materials, but bear in mind I also can't claim back V.A.T on tools, accessories, fuel, all of my outgoings, which means all of that needs to be passed on to the customer, making the difference charged even smaller.

The 30 pound an hour does that take into account transport costs and tooling cost.

Have to agree about price. I have a eBay business and was working non-stop. put my prices up so we got less work (but made a bit more profit per item) but still got the same amount of orders, so put the price up again and had a very small decline.. Put my prices up again so now have a reasonable amount of sale for me not to overwork and accountant has just told me I made £11000 more profit this year over the previous year. When people are making little profit they guess by lowering their prices they will make more (by getting more work) but sometimes the better strategy is to increase your price and seeing if the market can take it.

Be interesting to do this again in 2023!

hi good video but we all know there is more to it like no sick pay . high public insurance, running cost, tools, premises, and the list goes on and the government always moves the goal post I know because I have been self employed most my life. however the one positive thing I can say is that you answer only too yourself down side is the ups and downs.

Some people do benifit from VAT. some exporters i think and when i spoke to my accountant he said chemist do....not sure how though.

Hapy New Year! I was wondering your thoughts on doing carpentry and joinery in college at 26 years old?

I have been self employed for the last 23 years. I passed state retirement age 9 years ago, so have not had to pay NI since then. I work max one day per week, so pay only basic rate (20%) on 'profit'. I claim for the PC I work on (I am a product developer) a proportion of my heating, lighting broadband etc (all legit). Why would I stop? This must be one of the best countries on the world to be self-employed.

Cheers

I'm a London bus driver that works for an agency and have set myself up as a Limited Company. There is such a shortage of bus drivers in London that some bus companies are wiling to pay us agency drivers almost double what they pay their own drivers. For some people becoming a Limited Company maybe better financially than being self employed.

These numbers are being massively effected by the local tax free allowance which is front loaded. If income increases, the tax % could double. In the UK, tax is only charged on 8.5k of the 20k income but it will be charged on all additional income.

Andy, you mention £30 per hour what about if a job takes for example 3 hours do you just charge £90 considering you have to get to the job and back etc but the rest of the day goes uncharged?

Thanks for the video, I could not agree more. I am an accountant watching your channel as a hobbyist and although I have not been involved in tax work for many years I used to make these same points, and those re working out a sensible charge out rate, to my clients on a regular basis. There are also some business friendly opportunities for the self employed worth mentioning. To stay under the £85,000 VAT registration threshold all tradesmen should be asking their customers to buy the materials themselves, so that the tradesman only supplies labour. If they charge for materials they will reach the VAT threshold much quicker. I know some tradesmen make profit on materials but they should weigh this against the impact of VAT registration. The other, perhaps boring, thing is pension contributions. If you can afford it, pay as much as you can (up to the lower of £40k or your earnings) into a pension scheme. You get tax relief on the amount you pay in and get 25% of the cash back tax free when you draw your pension. This might not sound much, but if you are a higher rate tax payer now and kept £10,000 as income you would pay £4,000 in tax. Pay the £10,000 into a pension scheme you pay no tax on it now and are only taxed on £7,500 when you eventually draw it. Assuming you are then only a basic rate tax payer, that is £1,500 tax verses £4,000, an effective rate of 15%. I know people need to live, have mortgages etc to pay off but this is a very good deal. I would add I am in no way connected to the pension industry. Keep up the work on the great videos.

what we also need is construction employment agencies and payment companies regulated and stop the practice of charging someone to get paid ? its the only industry where you have to pay to get paid ?

well said

Today I went to my local lighting store, and inquired about their service department for one of my lamps. Alas, they said, they no longer have a service department because the independent fellow they had in house passed. Tomorrow I will take my vacuum for repair; I hope they still exist.

In The Netherlands you can request to not have to charge VAT when you make less than 20.000 euro, I believe. It's your own choice though. You still can charge VAT when you earn less.

You mentioned about another help channel you do. Please repeat it to me. I have always been worried about the tax side of things and you have just relaxed me. Please help. Peter.

It Would be about £2500. in the UK. £12500 Before Tax then 30 % of all above that figure. Made up of 22% income tax & 8% Nat Ins. = 30%. I Pay an Accountant to Deal with it. One Who Works FOR ME not the State.

Great video Andy! Now I don't want to start an argument with this. But it so often does. However, I'd like to know so I'm gonna ask. Brexit. Do you think its going to be a positive or negative for self employed people and the trades?

Just pay your tax otherwise that small business you have when it gets big means you will have some explaing to do later to your new accountant. Your always looking over your back for several year after you go legit.

if you earn 20k profit i thought you can only get taxed on the 7.5k cause your tax code is 1250 ? so am i wrong would like to know the answer.thanks

Will this be uploaded to Small Business Toolbox?

You're extremely right! Count yourselves lucky in the UK (apart from the weather). I've been living in Spain for over 6 years and studying joinery here for the last 2. You pay around 38- 40% income tax same as you showed for Italy and as you showed you are required to charge VAT from the get go. Beyond that, you are charged a fixed fee of 300€ per month just to have the right to be a freelancer/self employed! Its an extremely difficult system to the point where, even though there's a huge lack of qualified tradesmen in Spain, going out in your own just seems almost unattainable... may have to move back to Blighty!

"Traders don't benefit from any way in charging VAT." I don't think this is strictly true. If you're VAT registered you can reclaim the VAT you pay on your business supplies (input VAT), which can be a very significant saving.

My first would be to point out that its not a new decade, its the last in the first from 2011. Second is, being a old school YTS scheme kid, i always put away 40%

Truer word have never been said. £30 pr hour really is so cheap! When the costs of tools, Insurance’s your vehicle etc, then there’s the one thing most forget about altogether, Consumables! You’ll be amazes at how much you spend on things like screws and other fixings, sandpaper and glue! Has any of you out there totted up the amount you spend on GLUE. You will be amazed

Perhaps you've covered this on the business channel, but why run as a sole trader as opposed to a ltd company?

same in australia, you earn more as a tradie than doing ICT (computers)! i got out of computers as every person from overseas wanted to work for less.

Australia has a GST of %10. Out threshold is $75,000. We can reduce that by taking out our costs

If I charged £30 an hour I would be on the dole ,no one I know would pay that

I was self employed for 38 years. I paid as much tax as I chose to. ;-) By the way, those are the best chisels money can buy. Did you know they stopped making them in 1968, yet ebay is flooded with them. I must have 30.

Would just like to add. I have lived in France for just under 11 years, and I'm registered as an Auto - Enterprise (used to be known as Auto - Entrepreneur), which is basicaly a sole trader. The biggest problem I have here isn't with tax but the "cotisations sociales obligatoires", the French equivelant to National Insurance. Mine works out at 24.8% and this isn't banded. If I only earn 500 Euros in a month, just under a quarter goes to the RSI / URSSAF. I've had enough and I'm selling up and returning to the UK!

I'm a one man small business I do Pat testing I get lots of calls asking to go test rental property's I need to be charging about 70/100 to make any money only then to be told I can get it done for 30 old saying pay peanuts get monkeys. I'm city n gilds qualified can't get the customers to see past cheep is best 😞

I think the US number might be off. I presume when you asked about 20k pounds, that was per month. The Income tax in US of ~15% would be for a $20k income for an entire year. $20k/month income in US is closer to 22% effective tax rate, in addition to ~5% for Medicare and Social Security (FICA tax). Both are federal level taxes (not including state/local income tax)

Please do a video that looks at the competency and regulation of the various trades.Believe me as a time served engineer and retired airline pilot I can assure you that the level of competency I have witnessed over 25 years in this country is abysmal.It is way too easy to enter the world of construction and maintenance with zero aptitude and then wreak havoc on the general public.I have come across these people whilst building up my rental portfolio but I am lucky enough to have a couple of good old school fully trained mates in the trade who I put my faith in.It is still far too easy to get ripped off by shoddy workmanship that leaves an everlasting nasty taste.Small wonder people are reluctant to pay a decent rate for jobs.I agree with all your costing analysis by the way.Excellent honest channel .

2 grand, 3 .5 including Ni

It’s great advice as always but customers still want everything done as cheap as possible. I’m in my third year of self employment and I still seem to lose more jobs than I win despite giving very reasonable quotes, people in the U.K. really do not know how difficult it is for a self employed tradesman to make a decent living most would rather bodge a job and do it themselves than pay a pro to do it properly. I’m hoping this will be a good year otherwise I’ll have to weigh up my options.

👍🏻👍🏻👍🏻

Things to remember,when a customer ask you to give them a discount ,ask them if they go to work all day and only take pay for half of it ,and then ask them if they dont why should you ,Mad Mac is right about cutting prices to underbid someone else ,its not only foolish ,but plain stupid ,i do what i do because i enjoy it ,when we take on a job at someones home its a responsibility on you ,that you do the job the right way ,by code ,and so on ,you should be paid accordingly

Where did the numbers for Australia come from?! It’s actually way higher. 32.5% of under $90K incomes more it jumps to 37% and then 45%

20% above £12000 so £8000 will be taxed at 20% =£1600 approx

In Croatia over 15000 I will pay over 50%. And food and everything else is more expensive than in London. Flats are only 30% cheaper. And government won't you success like in GB. I have a feeling everyone won'ts to help me there.

Time to get physical sterling silver money and bypass the paper cash and digital paper trail

First time visitor Andy - and like what I see. I've been running my own business for around 12 years. (I am not in the "trades" but provide a range of custom products offered through various websites). It's a Ltd company - has been since inception - and have been lucky enough to make sufficient gross profits to afford the additional costs associated with a Ltd structure, such as professional accountants and other consultants. A benefit of a Ltd company is the ability to pay dividends, which are at a far lower tax rate than income. I totally agree about "race to the bottom" strategies. I have NEVER discounted my products and services, and in fact, remain around 30% to 40% more expensive than most competitors. This does however commit you to giving a better quality service and product, and if you prove this to your customers, the higher price is never an issue... besides, people who insist on discounts are already looking for "cheap", and I happily encourage them to shop elsewhere. It is far more profitable (and efficient) to get 2 jobs for £100 each, than 4 jobs for £40 each. Many people starting out in business fail to recognise that making a SALE is not the same thing as making a PROFIT - and that there are some customers you DO NOT WANT... Let your competitors lose money, while you chase the stuff that has value. Like your channel - will like and subscribe.

Tax whats that?

Always suspicious of some traders charging 20%vat when obviously the're no way earning anything like the top earning rate.