A self employment question

[Deleted User]

I'm hoping maybe someone can help me out with this one , it seems like a silly question but here goes...

I've got my fulltime job, and I pay my tax as normal through PAYE so that's ok. On top of that I do occasional bits of web design here and there, and I'm registered as self employed for this purpose.

If I don't forsee getting any work in for a long period, is it worth deregistering as self employed each time? Or if I do no work in a tax year, do I just declare my profit and turnover as zero?

Many thanks

Horace

If you keep chopping and changing on your self employment status you will not only confuse yourself but the HMRC. You will get a self assessment form to complete and on that you enter details of your paid work e.g. your full time job as well as details of your self employment. Under self employment you are taxed on your profits - if you have made no profit then you enter a zero balance.

HTH

reheat

The only slight downside of staying self employed is you have to keep paying class 2 NI contributions. But given the potential hassles mentioned above of chopping and changing, probably best to leave as-is for the moment.

payless

can claim class 2 Ni back if below profits a certin limit

Horace

Class 2 is only about £2.40 a week - however, if you get a low income from the self employment then you may be able to get a class 2 exemption. Ring the HMRC and ask - they are friendly and helpful - they have an advice line for the self employed.

pitkin2020

you can also offset any losses on your self employed against you fulltime job

PlutoinCapricorn

This is a very good point, and there is no perfect answer. People cannot see into the future and know how much they will be earning from self employment.

Do bear in mind that if you decide to stay self-employed to avoid having to keep changing your status, and have legitimate expenses finding work, you can declare a loss and perhaps get a refund from the tax that you pay as an employee. However, if you run and run without making any profit, HMRC may suspect that you are only SE to get tax refunds.

Are you looking for extra work and not finding it, or do you only do whatever comes along? If the latter, remember that if you are not really "in business", you can earn a bit extra here and there without needing to register as SE provided that you let HMRC know.

AirCooledHeaven

If you keep registering and unregistering as self employed you will eventually raise a 'red flag' to HMRC and end up getting hassled. Likewise if you stay self employed and make a loss every year while still having employed status. Yes you have to pay £30 per quarter class 2 NICs but you can get a refund of overpaid NICs. If your very occasional self employment is likely to take you into higher rate tax then it's probably not worth doing and you should deregister permanently.