Tier 2 employee and paying taxes on my own.

[grampian]

Hello Everyone,

I was wondering if anyone can give their opinion on tier 2 sponsorship and paying taxes on my own.

I am on PSW visa now. I have been working for my future sponsor as a sole trader for last one year. I would like to continue as sole trader for next three years and work for my sponsor. This is purely to save tax for myself and my employer.

I am on loosing end to work as a sole trader as I am not entitled to have employee benefits such as holiday pay or sick pay etc. I believe it saves tax for me and my employer.

My questions is it acceptable as long as I am working for my sponsor and paying taxes.

I would appreciate your opinion on it.

Regards

Grampian.

[Lucapooka]

It's not permitted. Under Tier 2 your sponsor has to employ you in the classic sense under the PAYE (withholding tax on income) regime. Consider switching to Tier 1 (Ent) and supplying your services as self-employed.

[grampian]

Thanks for your reply.

I have read tier 2 policy guidance and sponsor duties but it has never mentioned anything about PAYE except working for same employer and supplementary work for 20 hours.

As you mentioned about Tier 1 (Entrepreneur Visa), I can earn only £62k per year at my current position. I haven't thought about this option and heard of it as it is too risky. Please advise me regarding this.

I would appreciate if you can provide me any link or evidence related to this.
I may be wrong and missed any valuable clause in Tier 2 guidance.

Regards

Grampian.

[Lucapooka]

With T2, working for the same employer is defined as PAYE employment. It is not self-employment providing services exclusively for the same entity, as you seem to be suggesting you would like to do. Search the T2 guidance for options on self-employment but don' t be surprised when zero results are returned. That is because there are no options to do this.

[grampian]

It seems to me clearly that I am in a tricky situation here. My employer would not like to pay any NI (or Employer's contributions) by adding me to his PAYE.

Would UKBA track tier 2 sponsored candidates regarding their pay slips or taxes after issuing visas?

So what options have I got here?

Please suggest me an alternative.

[Lucapooka]

You keep referring to this entity as your employer but that is not the case; you are self-employed and provide services to that entity. Not possible under T2. I have already suggested the alternative under T1. Good luck.