self assessment on extra earnings

skywalker1

hi guys, first post here, and sorry if this has been asked before, I just can't find it in black and white to give me peace of mind.

I am full time employed, and pay tax through PAYE of course.
Just recently I have had the option of taking on a steady extra income through freelance work on evenings, weekends etc.

Before I take this on, and register for self assessment, I want to be sure basically that work wouldn't find out about it! Otherwise I wouldn't want to do it and jeopardise my main job.

The way I understand it, once registered, and the tax form time comes around, I just fill in what I've earned through regular earnings, and the tax on it, and then I just declare any extra for them to work out how much tax I owe. So the PAYE is always kept seperate, and the tax code for it isn't effected by the extra earnings - even if I tip over into the 40% bracket for some of the extras?

Looking forward to your responses, cheers.

mtem74

Basically, yes. The taxman can not tell your employer you have another job or what it is.

You may want to pay your under payment rather than the taxman adjusting your tax code to collect any underpayment though. That way work won't have any questions as to why you are not on the basic personal allowance (presuming you dont have anything already that is in place to adjust your code)

skywalker1

thank you for the response. Could you tell me a little about what this under payment is? Sorry, new to this world!

jem16

skywalker1 wrote: »

thank you for the response. Could you tell me a little about what this under payment is? Sorry, new to this world!

An underpayment is when you owe tax which will be what happens in your case as you will have to pay tax on your freelance work.

When it comes to filing your self assessment make sure you don't tick the box that says to collect any tax owed through your tax code during the next tax year. That way you will have a bill to pay by the end of january the following year but no adjustment will be made to your tax code to collect that underpayment.

Elaine_Wilson

Just to add to Jem's comment make sure you read the questions carefully. On my return this year collection via a code number seems to be the default and you have to tick to make sure this is not done.