Becoming self employed while being employed

alexmac_uk123

Hi all,
I am currently employed by asda but only on a seasonal basis i.e xmas, easter, 6 weeks hols. As of now (January 2010) i will be working as self employed for my previous company as a service engineer.
I was just wondering what would happen with my tax code and would i get taxed more on my job at asda now im going self employed.
Any assistance on this subject would be grateful.:j

rupee99

You must register with HMRC using this form

http://www.hmrc.gov.uk/forms/cwf1.pdf

within three months of "commencing trade."

It will affect your employed income and rates of tax and you will have to start paying class II National Insurance Contributions (about £2.40 per week)

alexmac_uk123

computershack wrote: »

PLEASE NOTE: You may actually not be able to work self employed for the company if you cannot dictate the hours, the place and who does the work as you will not satisfy three of the criteria HMRC state for self employed persons.

Your tax code will not alter. If your P45 is still with Asda, you will be taxed normally with the tax free portion applied to your wage. If it isn't (they send it back between stints), fill in a P46 next time you start stating Asda is your second job. You will then pay tax on the full amount. You don't have to do that and can simply either hand over the P45 or fill in a P46 stating it is your main job if you'd like the tax free portion of your Asda wage to remain though.

You will be sent a self assessment form annually. One section is for income from self employment and one for PAYE which also has an entry for tax paid. The totals from both will be added up together and your tax bill calculated. The amount you've already paid through PAYE will be deducted from that figure and the result is what you will owe. If you make a loss in a years self employment, you'll be due a refund.

Don't forget to open a savings account and deposit 30% of any profit from payments you receive in self employment to cover your tax and NI bill.

So when i start back at Asda in march say i will need to fill in a p46? I will be working all different hours for the old company, only a couple of weeks a month but will earn enough to live off.

fengirl_2

You will have a P45 from your previous Asda work which you c an hand in to them.
The 3 mth grace period for registering as self employed has been abolished. You now need to register as soon as you receive your first payment. However, like a previous poster, I would check your employment status with your local status inspector as your previous company may be trying to avoid their legal responsibilities.

alexmac_uk123

fengirl wrote: »

You will have a P45 from your previous Asda work which you c an hand in to them.
The 3 mth grace period for registering as self employed has been abolished. You now need to register as soon as you receive your first payment. However, like a previous poster, I would check your employment status with your local status inspector as your previous company may be trying to avoid their legal responsibilities.

There is no p45 from asda as i am seasonal so my contract is open all year round and have only been there a couple of months. Since when did the 3 month grace period change then?
My previous company have sorted out an agreement form with me which doesn't tie me into anything and just states that i can do work for them and i invoice etc.

alexmac_uk123

From HMRC website:

You are probably self-employed if you:

• run your own business and take responsibility for its success or failure
• have several customers at the same time (you are only going to have one)
• can decide how, when and where you do your work (they will be setting the hours)(they wont set the hours they will just say where the job is)
• are free to hire other people to do the work for you or help you at your own expense (can you send a mate to do the job instead of you?)(i could send a mate to help me but they arent qualified in that field of work)
• provide the main items of equipment to do your work (yes)

You are probably employed if you:

• have to do the work yourself
• work for one person at a time, who is in charge of what you do and takes on the risks of the business (if you damage a customers item, are you liable for replacing or repairing it out of your own pocket or is the company you work for?)(i'd be liable to pay for it)
• can be told how, when and where you do your work
• have to work a set amount of hours
• are paid a regular amount according to the hours you work, and get paid for working overtime - even if you do casual or part-time work, you can still be employed(would get paid hourly working rates, hourly travel rates and diesel costs which i have already set)

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[Deleted User]

fengirl wrote: »

You will have a P45 from your previous Asda work which you c an hand in to them.
The 3 mth grace period for registering as self employed has been abolished. You now need to register as soon as you receive your first payment. However, like a previous poster, I would check your employment status with your local status inspector as your previous company may be trying to avoid their legal responsibilities.

!!!!!!. So what happens now if you dont register for a month or two?

[Deleted User]

This says three months?

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/WorkingAndPayingTax/DG_10016920

alexmac_uk123

It says on hmrc website that its still 3 months before you have to notify as being self employed.

Jaspr

Hello I'm in a similar situation. I am permanently employed but have a months leave coming up. I was looking at getting a temporary job during that time. Someone suggested an Umbrella company, have you considered that ?
and does anyone know if this would this be better than "going self employed" ?

hope any response helps both of us



cheers

Jase

alexmac_uk123

Jaspr wrote: »

Hello I'm in a similar situation. I am permanently employed but have a months leave coming up. I was looking at getting a temporary job during that time. Someone suggested an Umbrella company, have you considered that ?
and does anyone know if this would this be better than "going self employed" ?

hope any response helps both of us



cheers

Jase

Hi mate no i havent considered this simply because my old company are guaranteeing me work for months so hopefully i should earn as much or more as i did when employed by them, the aim then is for them to take me back on as an employee, but we'll see.