Already employed and becoming self-employed also

oakdale_minx

Please forgive anything that sounds extremely simplistic here - tax really isn't my thing! I'm already employed full time and earn £24,000 so pay tax and NI through my employer.

As of 4 weeks ago I started working for three mystery shopping companies. One of them sent me a form for tax (I think it was a P46) and the other two say I am classed as self employed. I have been payed this month £63 by one of the companies classing me as self employed and I will probably be earning an average of £20 - £30 a month between the three companies, but this will vary due to work availability.

I have, in the last couple of days, also started working for AQA . This will also be classed as self employed and hopefully I will be looking to optimistically earn around £250 a month, maybe more if I have the time.


I have found the phone number to call tomorrow to register to become self employed.

However, what I need to know is, what else do I need to do? Do I keep some money aside each month for the self employed jobs for the tax? Do I just need to keep the details of what I have earned through keeping copies of my bank statements? Or do I need to do more?

I know nothing about being self employed with regards to the tax situation and would appreciate any comments/help. It could all fizzle out to nothing if it doesn't work out, but I'd like to make sure I have everything done above board as I understand i'm supposed to tell the tax people within three months of becoming self employed.

CIS

On the 3K, unless you can find some expenses to offset, you'll pay 22% tax (thats the band your in at the moment) but you wont pay class 4 NI.

You ideally need to keep evidence of all your earnings, either payslips or even bank statements and then at the end of the year you just total everything up and enter it on the tax return along with your employed earnings.

Aark

You do need to register as self-employed within three months of starting.

See this page for more information:
http://www.hmrc.gov.uk/startingup/index.htm

As you expect your profits to be low, you should apply for exception from Class 2 NIC (tick the box on the registration form).
http://www.hmrc.gov.uk/leaflets/se1.pdf

You must also keep all the records of what you earned for at least five years from the 31 January after the end of the tax year that they relate to.

john_kent

Its not a real problem.

I have the same thing. I have one main employer paying me 24k , and two others who pay me 3k each. I pay tax on firts and 22% on other two

I also have around 12 companies I do work for on an as and when basis. I collate all info , including receipts for expenses and pass to accoutnant. he charges me £300 a year and last year go tme a £890 rebate.


On my own , I wouldnt have known what to fill in. Some accountants wll give you a free 30 min advisory chat.

MY situation may be a little different , as I need specialist tools for some of my jobs.

seven-day-weekend

You can also arrange for them to collect any tax owed by PAYE through your salary.

My husband had a small picture framing business and that's how he did it . He also claimed exemption from paying the self-employed insurance contributions.

Genie75

*You will need to keep any paperwork relating to being self employed for 7 years.
*Keep yourself organised because you will have to fill in a tax return at the end of each financial year.
*Make sure you register as self employed within 3 months of starting or they will fine you.
*As you have a full-time PAYE job, your NI contributions will be covered by that so you won't be missing out on any benefits should you need them in the future.
*Generally I put aside a third of my self-employed income into a savings account so that the money is there when I get my bill - then anything I don't need for the taxman at the end of the year goes towards Christmas

HTH

Chas

oakdale_minx wrote:

However, what I need to know is, what else do I need to do? Do I keep some money aside each month for the self employed jobs for the tax? Do I just need to keep the details of what I have earned through keeping copies of my bank statements? Or do I need to do more?

I know nothing about being self employed with regards to the tax situation and would appreciate any comments/help. It could all fizzle out to nothing if it doesn't work out, but I'd like to make sure I have everything done above board as I understand i'm supposed to tell the tax people within three months of becoming self employed.

As other people have mentioned you do need to keep more details than just your bank statements.

I keep all the information on a spreadsheet - I can forward a copy to you if you pm me with your email address.

It's not all bad news - remember that you can offset expenses against your self employed income, such as petrol, mobile phone, paper, ink for your pc, internet usage. Obviously you can't 'charge' the full amount of each item, you need to work out the proportion that directly relates to your mystery shopping work.

Hope this helps

oakdale_minx

Thanks all - I'm going to call the tax people this afternoon.

Chas - I've PM'd you. Excel isn't my strongest thing, but if it's pretty simple I should be able to cope!

I'll keep all my bank statements and highlight what I earn, I'll start transferring some money into a savings account , look to use to spreadsheet and take it from there.

Thankyou all

Graham_Devon

The only one thing I would suggest is that you really do look into getting yourself excempt from class 2 NI. I'm employed and self employed and have to pay NI class 2 twice, once through employer, once through self employment. Then I also have to pay class 4 NI on self employment.

Class 2, is about 10 quid a week, i think, I just pay it, but if you can get excempt from that, thats saving yourself £120 a year.

However, being excempt from stuff probably will give the taxman the urge to query you, especially on such very small amounts earned via SA. So make sure you keep everything recorded and straight. They ALWAYS find ways in which you apparently should give them more money.

Genie75

Graham_Devon wrote:

Class 2, is about 10 quid a week, i think, I just pay it, but if you can get excempt from that, thats saving yourself £120 a year.

.

Class 2 NI is £2.10 a week.


Check with the taxman when you ring if you want to check if you can apply for a small earnings exemption or not.

me_and_the_cat

I'm employed and self employed. When I registered with them the tax peeps sent me some bumpf which is useful.

I don't do anything fancy - I just have a cash book/ledger with my income and expenses and a file that has all the reciepts/bank statements/ etc relating to self employment. I've got two different bank accounts one is purely for any money I earn through self employment and I find it easier to keep track that way.

I can't remember off the top of my head but if you earn less than £4k ish from your self employment you can apply for NI exemption. As far as the tax thing goes after my self assessment has been completed they take the money directly from my main employment, but it's been painless.