The pros and cons of being self-employed that you need to know about

Self-employment, or, as it is more correct to call it, the professional income tax (EPT), is a special tax regimeFederal Law No. 422-FZ of November 27, 2018 “On the Experiment to Establish a Special Tax Regime “Tax on Professional Income””. It is suitable for those who are paid for the results of their activities or the rent of their property.

The tax was introduced to help those who receive income but do not share it with the state come out of the shadows. The target audience included, for example, people who rented out their grandmother's apartment or provided various services to order - they glued wallpapers, arranged photo shoots. They were promised ease of becoming self-employed and low tax rates to motivate them to legalize. However, not only those who previously worked secretly, but also individual entrepreneurs can pay tax on professional income. They are lured by the same bonuses.

Let's see what are the real benefits for self-employed and what are the pitfalls in this mode. And since it is available to people with and without IP status, let's agree that in this particular text we will call people without such status individuals, and with it - entrepreneurs. This is not entirely correct, since the IP is also an individual. But some violation of the rules will help make the text easier to read.

What are the benefits of being self-employed?

It gives legal status

The paragraph concerns individuals who do business in the black. Many manage to do this for years without any problems. However, troubles can appear, especially if customers are brought to you not by word of mouth, but by ads on social networks or even on the fence. For example, a person makes cakes in his kitchen and advertises them on the Internet. The tax office detects this and conducts test purchaseAs a result of the raid, income declarations / FTS were provided. Or the neighbors don't like the tenants above them and report that housing for rent, in the Federal Tax Service.

If the inspector considers that a person has evaded paying taxes, he can charge them additionally for three yearsTax Code of the Russian Federation, article 113 "Statute of limitations for bringing to responsibility for committing a tax offense" and add more penalties. Additionally, you will have to pay a fineTax Code of the Russian Federation, article 122 "Non-payment or incomplete payment of tax (fee, insurance premiums)".

But legal status is useful not only in order to avoid punishment for non-payment of taxes. It also makes it possible to show official income where required. And so it will be, for example, easier to get mortgage. (Note the wording: "easier", not "simple". Banks still prefer contract income.)

And the status of self-employed allows you to issue checks to customers. Which can significantly affect their attitude. Because it is some kind of document. It's one thing when you order some kind of sofa cover sewing over the Internet and transfer money to an incomprehensible card. And it’s completely different when they send you a check, because it’s easier to resolve issues with it in case of marriage or other disagreements.

Status is easy to get

An individual has several opportunities to legalize income, in addition to self-employment. He can declare income annually, become an entrepreneur or register an LLC. Now it is not so difficult to do this thanks to electronic services.

It's easy to become self-employed. You just need to download the application "My tax" and register there.

The operating entrepreneur must also send a notice to the tax office about the refusal of other tax regimes.

Easier to work with legal entities

This paragraph again applies to individuals who work unofficially. Many companies would be happy to work with talented illegal immigrants. But firms cannot simply transfer money to other people's cards, they need to justify the expenses with some documents.

Of course, you can always conclude with a contractor civil contract. But it needs to be set up correctly. Plus, the employer becomes a tax agent in relation to the contractor. That is, he needs to pay income tax and insurance premiums for it. The self-employed will only receive his remuneration, so this reduces costs.

No need to submit reports

If an individual still wants to pay taxes, but has not received the status of self-employed, then every year until the end of April he must fill out and submit tax return for the previous year in the FTS. Then it is necessary to pay tax on all declared earnings until July 15th.

For an entrepreneur, the set of papers depends on tax systems. An individual entrepreneur on a simplified system or an entrepreneur on the ESHN (single agricultural tax) also submits a declaration, on the general taxation regime (OSN) - additionally reports on VAT. Under the patent system of taxation, you do not need to hand over anything. However, if the individual entrepreneur has employees, you will have to draw up documents for them.

The self-employed do not need any of this. He simply writes out checks to clients in the application, and the data themselves fall into the tax office. This is also true for IP on the NAP.

No need to pay insurance premiums

Entrepreneurs, even in the absence of income, must pay mandatory contributions to pension and health insurance. In 2022, in total, this is a little more than 43 thousand rubles.

And if the self-employed want to transfer money to the Pension Fund for the formation of a pension, then this is allowed to be done on a voluntary basis. This will allow you to get seniority and retirement points.

Tax rates are lower

The rates for the self-employed are 4% when working with individuals and 6% when working with legal entities. But they also have a tax deduction of 10 thousand rubles. Due to this, the rate is reduced to 3% when working with individuals and up to 4% - with legal entities until this limit is exhausted.

SimplifiedTax Code of the Russian Federation, article 346.20 "Tax rates" or ESHNTax Code of the Russian Federation, article 346.8 "Tax rate" you can pay 6% of income (or less if the region lowers the rate), but from all transactions. If a person without any status annually submits a declaration, then he pays personal income tax at 13%. A similar rate is valid for IP on DOS.

Self-employment from this point of view looks the most profitable. Although there is a nuance, we will analyze it in the minuses.

You can do without a checkout

The self-employed do not need to use the cash register. Checks are generated in the My Tax application, they can be sent to the customer electronically or printed on paper. This also applies to NAP entrepreneurs. But individual entrepreneurs in other tax regimes often need a cash desk.

What are the disadvantages of being self-employed?

The self-employed are not allowed to do everything

Not everyone is allowed to go to the NAP. For example, you cannot choose this tax regime to resell goods or sell your own products if they are subject to mandatory labeling. In this case, you will definitely have to register an individual entrepreneur with a different tax regime, or even OOO - Entrepreneurs are also not allowed any activity.

You cannot hire assistants under an employment contract

From the name it is clear that the self-employed person works himself, he cannot take someone else's business. Therefore, he is not supposed to hire employees. To do this, you will have to switch to a different tax regime.

At the same time, self-employed people can attract other people under civil law contracts.

This mode is disadvantageous for high incomes.

The NAP is only suitable for those who earn less than 2.4 million per year. If during the year the income exceeds this amount, the individual pays 13% from the excess. But individual entrepreneurs have the opportunity to switch to a new tax regime - for example, to a simplified one, in order to give the same 6%. Being an entrepreneur, if you have a large income, is more profitable.

It will not be possible to reduce the taxable base

If you pay NIT, tax is calculated on all income for which checks are drawn. It's super simple, but there are nuances - the very ones that were mentioned in the paragraph about low tax rates.

Firstly, an entrepreneur on a simplified tax and a patent can reduce the tax by the amount of insurance premiums paid. Theoretically, this is of little importance, because the self-employed person does not give them away at all. But if one believes in state pension and transfers contributions voluntarily, this bonus can be significant.

Secondly, on a simplified basis, an individual entrepreneur can pay not only 6% of all income. He can also optionally give 15% of the difference between income and expenses. And sometimes - although not very often - it is more profitable than 4-6% of the total earnings of the self-employed. For example, if a person produces a product, in the price of which the cost of his work is a minimum.

Of course, here you need to pre-calculate everything for each specific case. Let's say a craftswoman sews shoppers - reusable eco-friendly shopping bags. She estimates her product at 500 rubles. Moreover, the fabric and accessories cost 350 rubles. If she sells a shopper to an individual, then she pays a tax of 20 rubles from the transaction, if a legal entity - 30 rubles. With simplification, 15% of the difference between income and expenses would amount to 22.5 rubles. If a seamstress works mainly with legal entities, it may be more profitable for her to register an individual entrepreneur. Or not, if her parties are small, because mandatory insurance premiums will still be added to the equation. So the calculator in such matters is your best friend.

Entrepreneurs of a legal entity are trusted more than self-employed

In the benefits section, we talked about the fact that it is more profitable for companies to work with the self-employed than with illegal individuals. But when choosing between an individual entrepreneur and a self-employed individual, they prefer entrepreneurs. And that's why.

It is easy to find an individual entrepreneur in a single register and make sure that he has this status. It is difficult to verify that a person is self-employed at the entire stage of cooperation. Therefore, there is a risk that an evil tax office will come, find that an individual has no status, and wonder why taxes and insurance premiums were not paid for him.

There are nuances with calculations. Individual entrepreneurs receive money to a current account for a business, self-employed - to a personal one. And for the customer company, such transfers may be subject to a bank commission.

You can't work with a former employer

Sometimes the company terminates the employment contract with the employee and begins to cooperate with him as a self-employed person. This is beneficial for her: there is no need to pay insurance premiums, and a person pays income tax himself. For an employee, this is not a good option: he is no longer protected labor Code. Relations with him can be broken at any time, he is not entitled to vacations and vacation pay. You should not count on sick leave and pension either - no one pays insurance premiums. But now is not about that.

To prevent employers from taking advantage of this loophole in the law, a rule appeared: within two years after the dismissal, you cannot work with the previous company as self-employed. And sometimes that can be a downside. For example, if you voluntarily went on a free voyage, but the organization sometimes needs your services.

An individual entrepreneur cannot leave NAP early for a favorable regime

The self-employed may renounce this status at any time. But the individual becomes simply unemployed after that. And the individual entrepreneur automatically switches to an unfavorable general taxation regime. It will be possible to replace it with a simplified tax or ESHN only from the beginning of next year. There are no restrictions for a patent.

However, the tax regime can be chosen at any time if the entrepreneur no longer meets the NAP criteria. For example, it has received more than 2.4 million since the beginning of the year.