How do I declare 2nd earnings

Gaz12330

I am currently employed full time earning around 34K per year. However I am due for retirement and would like to try some consultancy work just to see if I like it before stopping work full time.

I have read previous threads on how the 2nd income is taxed and have some idea of the procedure (may be some questions later) but how do I go about declaring this additional income in the first place.

I am assuming the company that will use me for consultancy work will pay be by cheque on completion of each job I do (say £100 to £150 each time) As I will be doing this work on my days off I do not anticipate doing more them 2 to 3 per month.

Do I for instance keep a tally of what I have been paid and let my Tax Office used by my main employer know at some point in the tax year (assuming January). Or do I have to set it all up my completing a form prior to starting. What concerns me is I may only do a handful of jobs then find I don’t like it and I would have to burden any change to the tax code for the rest of the year.

Any advice guidance will be greatly appreciated.

orangeslimes

You have to register as self employed - you are supposed to do this when you start trading (or it may be worth setting up a limited company)
It requires more than a tally of what you earn - you need accurate records of all your income and expenses.
I suggest you try phoning up a few accountants who will probably give you some free initial general advice without obligation...
I don't think it will make a difference to your tax code (but not 100% sure)
By the 31st January of each year you will have to fill in a tax return including details fo all your income and pay any outstanding tax for the year to the previous 5 April

PlutoinCapricorn

HMRC prefer you to register as self employed once you have some actual work rather than do it on the offchance only to find that there are no clients.

At this stage, there is not much point in having a limited company - see a recent thread about this - so you would be a sole trader. If your official start date is after April 6th 2010, you will self-assess for FY 2010-2011 onwards, otherwise it will be for FY 2009-10 onwards. You declare the additional income on the self assessment return: there is no need for your PAYE Tax Code to be affected. Employment earnings and consultancy earnings are separate.