Tax on 2nd income, please help me understand!

beedeepee

Hi there
I recently took some freelance work, for 8 weeks, which I will be getting paid about £1900 for. I am full-time employed, and pay tax on that (about £330/month inc student loan repayments)

HOW do I go about declaring this second income? Do I need to? I am very confused!!!

Many thanks to ANYONE who can help!

triggerhappy_2

You need to register as Self-Employed with HMRC. Info on how to do that here.

More info on being self-employed here. Hang on to any receipts for expenses incurred during the course of your work as you will be able to offset the amount of tax you pay with some of these.

fengirl_2

Im afraid I dont agree with the previous advice. If this was a one-off piece of work, you are not liable to class 2 NIC on this income and should not register as self employed. Just write a letter to your tax office at the end of the tax year saying you have a one-off consultancy fee to declare and they will send you a self assessment. You will need to pay the tax by 31 Jan 2011.

triggerhappy_2

fengirl wrote: »

Im afraid I dont agree with the previous advice. If this was a one-off piece of work, you are not liable to class 2 NIC on this income and should not register as self employed. Just write a letter to your tax office at the end of the tax year saying you have a one-off consultancy fee to declare and they will send you a self assessment. You will need to pay the tax by 31 Jan 2011.

'Second income' made me think it might be an ongoing situation. Either way, HMRC will be best to advise you on your specific situation.

beedeepee

Crikey this is all very confusing for me! However, your advice is well appreciated. As long as I don't get 'done' by her Madge's henchmen!!!

p00

Depends if you intend doing more freelancing surely. If you do then Id register self employed. But if its a one-off then Id follow fengirls advice.

xp00

triggerhappy_2

p00 wrote: »

Depends if you intend doing more freelancing surely. If you do then Id register self employed. But if its a one-off then Id follow fengirls advice.

xp00

You think you'll only do it that one time...

Ypaymore

Their is a seperate tax forum here : http://forums.moneysavingexpert.com/forumdisplay.html?f=22
if anybody needs further tax advice.

silentotter

Hi All

I am shortly to start some web based freelance work for a company as a second income, this work will be ongoing. The company will pay me via Paypal. My earnings for both jobs put together will fall well into the lower income tax level.

I am being paid per task at a rate of £6.00 each. The amount I earn per week will depend on how many tasks I complete each week. As I will be paid in this way direct from the company and will not submiting invoices to them should I register as self employed or not? Or would this be considered as employed also this at times may be my only employment if and when my present employed contract ends.

Can I put some bills against the income as expenses such as internet bill, electricity and gas?

Would I be correct in thinking that the NI and tax for the additional income would be at the 22% and 11% respectively?

Any advice would be much appreciated.

Silentotter

fengirl_2

The question of whether or not you are self employed is for your employer to decide. If he is in doubt, he needs to consult his tax office. Wait for the ruling on your status before you consider registering.

fengirl_2

To go back to the original post, the OP said this was a one off 8 week contract.
If you are an employee and have subsidiary self employed earnings of under £2500 a year, you dont register as self employed or self assess, you just tell your tax office you have had the extra income and they will assess.