Employed vs self-employed

In this lesson

1. 0:00 Employed versus self-employed tax implications
2. 1:37 Tax reliefs and pension contributions
3. 3:02 National Insurance differences explained
4. 3:35 Capital gains and VAT considerations
5. 4:39 Inheritance tax business property relief

About this lesson

You'll explore how employment income and trading income are taxed differently, what expenses you can claim, and how National Insurance, pensions, VAT, and business asset disposal relief apply to each status. Understanding these distinctions will help you advise clients on tax-efficient working arrangements and recognise when different structures create tax planning opportunities. The lesson covers the core rules you need to know: employees pay income tax via PAYE on a receipts basis with strict expense deductions, while the self-employed use self-assessment on trading profits with more flexible deduction rules. You'll see how reliefs differ too — occupational pensions and qualifying loan interest for employees, personal pensions only for the self-employed — and how National Insurance, VAT registration, and business asset disposal relief work under each status. This comparison forms the foundation for more complex tax planning decisions around sole traders, companies, partnerships, and loss relief strategies.

Duration: 5m