Second job self employed?

Debtfreeinmy40s · 17 November 2017 at 7:34PM

I’ve agreed to help a friend out with the admin on her business. I’m currently employed part time and my friend wants me to invoice her for the work I’ll be doing so she can’t put it through her business as an expense.

I currently earn less than the £11,500 so don’t pay tax, and am paid by my first job by PAYE.

I’m not sure how much I’ll earn helping my friend and it will be on an advocate basis, and although I’m invoicing her she will pay me in cash.

My questions are... do I need to tell HMRC about this? Will I need to register as self employed on HMRC and complete a self assessment tax return? As I am only just starting to do this work this week, when will I have to complete the tax return by?

Thanks for your help.

Pennywise · 17 November 2017 at 7:59PM

You can't just decide you're self employed. Being self employed means being a business. HMRC have an employment status indicator or their website for you to check. It sounds like you're an employee of the new job, and the employer will have to pay you through payroll etc unless you're genuinely in business, i.e. providing your own equipment, choosing your own working hours, etc

Debtfreeinmy40s · 17 November 2017 at 9:41PM

I’m not changing from my current job, just helping my friend in the evenings to earn a little extra money so this is going to be a second job not instead of my current one. But because I have to invoice my friend for the hours I work so she can put it through expenses I don’t know if I need to make HMRC aware of these additional earnings and how to do it if I need to.

Neil_Jones · 18 November 2017 at 12:08AM

Technically speaking you're either self employed or you're not, there's no halfway house here.

Realistically if you're taking a lot from your friend of a sizeable chunk and its regular income then you should really be declaring it as self-employed income (you can have one job and be still registered as self-employed) and then paying any tax due on it through self-assessment. These are due by the end of the January after the financial year they apply to, so this tax year 17/18 they would fall due at the end of January 19.

If its a very irregular thing that happens, say, once or twice a year and only nets you £50 then whether you go through the above procedure and declare it becomes a moral issue I would have thought as to what you do and what you should do.

00ec25 · 18 November 2017 at 1:52AM

the pragmatic view....

1. your friend has taken pity on you and wants to give you some extra income, well done her...

2. your friend does not want such charity to cost her too much money so would prefer that you were self employed rather than her having the extra costs and admin time of her taking you on as an employee, running a payroll and paying you via PAYE

3. in order to humour your friend's attitude (which may be wrong as outlined by Pennywise) you will need to register as self employed before 5th Oct 2019 (ie during the second year of your business, (for business it shall be) https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed

4. as a self employed person you will need to submit tax returns showing both the income from job 1 (your first employee job) and your (fake) self employed job. The tax return must be submitted no later than 31 jan after the end of the tax year to which your income relates, eg: april 17 - april 18 (17/18 tax year) goes in by 31 Jan 2019. As a self employed person you will need to review whether you need/want/must pay Class 2 and Class 4 national insurance on the SE income (tax thresholds, state pension and other factors to think about)

5. in the fullness of time if you continue with only your friend as your only self employed client, your position could easily unravel as Pennywise has said, your status as self employed could look dubious if HMRC inspect you. Your friend will then be stuffed with evading employer costs for her employee (ie you)

6 you both have my sympathy. Friend wants to supplement your income out of charity, you need extra money. However, there are risks for both of you in such a set up.

Second job self employed?

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