self employed for overtime????

SuperSaver123

Hi All,

I have a bit of a problem. I did a lot of overtime for a few of the associated companies. I was suggested as method of payment by way of invoices. I understand that this would be as self employed and paying NI and tax whenever due.
I was always on PAYE and have no idea where to start. The other option is through PAYE but by way of invoices is 'preffered'...

Has anyone registered themselves for self employment, still working full time and being employed by another company? Where do I start? How much will I have to pay for taxes and NI? Will I be able to claim for expenses like broadband (I sometimes work from home), petrol, printer etc...? Or should I insist on PAYE? But then I would lose out a lot...

Please help:o

PlutoinCapricorn

It is very common for people to be employed on a PAYE basis and to do additional work on a self-employed basis. I have done it myself. You have up to 3 months to register as self employed otherwise you may need to pay a penalty.

The main benefit of self-employment is that you are taxed on profit not income, so yes, you can legitimate expenses and deduct them from the income. Your main job will allow for the personal allowance, so your SE profit will probably be taxed at 20% (unless you are a very high earner).

SuperSaver123

:TThank you for your reply, PlutoinCapricorn.

I am certainly not high earner, unfortunately!

Do I have to pay NI even if I am not doing the overtime in a specific month? What sort of expenses can I deduct from my income?

Sorry it is all so new to me...:o

fengirl_2

You will need to register as self employed with HMRC within 3 months of starting. You will pay class 2 NIC's by monthly DD which HMRC will set up.
You need to keep accurate records of all your income and all expenditure incurred in this work. You must include anything related to earning the profits. You will get a self assessment at the end of each tax year and pay the tax due in January and July following the end of the tax year to which the profits relate.
.

PlutoinCapricorn

This is a good place to start
HM Revenue & Customs:

Self Employment and Self Assessment Being self employed means you will need to complete an annual Self Assessment Return. This page answers frequently asked ...
https://www.hmrc.gov.uk/selfemployed/iwtregister-as-self-employed.htm -


As for expenses, it depends on what you do. What do you use and buy to do this work? Home based people often claim a proportion of electricity and other running costs. Some people claim car mileage. You must keep all receipts and records of these costs. National Insurance is around £2 per week, unless you get a certificate of exemption because of low SE earnings.

PlutoinCapricorn

Citizens Advice have lots of useful information: it is best to do some background reading before committing yourself:

Information on self employment including setting up, employing other people and financial issues, further sources of help and advice are provided.
https://www.adviceguide.org.uk/index/life/employment/self-employment_checklist.htm

SuperSaver123

PlutoinCapricorn wrote: »

As for expenses, it depends on what you do. What do you use and buy to do this work? Home based people often claim a proportion of electricity and other running costs. Some people claim car mileage. You must keep all receipts and records of these costs. National Insurance is around £2 per week, unless you get a certificate of exemption because of low SE earnings.

I am an office worker but I can work from home especially when I am doing overtime as I have the connection to the system but occassionally I travel to the office so petrol, portion of elctricity, printer cartridges, any stationery should be ok?

It seems a good idea then as I may just pay very little tax for the SE profit...

Thank you!

PlutoinCapricorn

I always bear in mind that HMRC will investigate if they notice anything that does not seem quite right, they also do spot checks. They say that it is quite common for self-employed people to understate their income and overstate their expenses. So you must be prepared to show the evidence that the money has been spent, and also that it was necessarily, exclusively in the performance of your business. If you claim only a proportion, that too might need to be justified.

I don't think that starting with a list of things that other people claim is a very good idea, it is best for you to start from first principles. If you needed to buy a better laptop, install a separate business line, that is legitimate. If you can prove that you do spend a lot of time at home doing the work, a proportion of the extra resources such as heating and lighting can be claimed, But as they will know that you have a full-time job, you can't claim as much as someone who is entirely self-employed and who does most of the work at home. And if you do a lot of it at home, you can't claim too much mileage and petrol!