I have a full time job and want to freelance, tax issues?

M.Holloway

I have a full time job (PAYE) but I can do more!!

I have two other companies that I could easily do freelance work for (5-10 hours a week each) no sweat.

However my concerns are, how can I get paid legally and who is responsible for my tax. Is it the responsibility of my employer (main one) or each as individuals?

How will my tax band be calculated then and will the govt try to stuff me in terms of emergency tax bands etc etc...

Also as I could be working more than 37.5 hours a week will my employers get in trouble?

bigpound

It all depends on the contract and arrangement you have with your companies. And the working hours limit is 48 hours in 7 days.

PlutoinCapricorn

There are several issues here: https://www.businesslink.gov.uk is your first port of call. You can get free advice, information and workshops there. Just to give you an idea:

Where income tax is concerned, if you earn more than £6,475 in your full time job then your personal allowance has been used up. This means that you will be taxed at the Basic Rate of 20% on the profit from your freelance earnings up to the band where 40% starts. If you earn more than around £5,000 then you will need to pay
Class 2 National Insurance of £2.40 per week and an 8% Class 4 levy on your profit. Assuming that you will not be starting a limited company, you will need to register with HMRC as a sole trader once you start the freelance work. They will ask you to complete self assessment tax returns each year.

dazza.mk

Your main employer will only be responsible for your tax for your main job, if your 2nd/3rd employers treat you as an employee and pay you via PAYE they would then be responsible for your tax on those jobs, alternatively you will need to register as Self Employed and pay your own Tax/NI (see the 1st post in the MS thread for more info.).

Assuming you register as self employed your tax code will apply to your main job and you will then need to pay any additional tax based upon a self assessment return by the 31st January following the end of previous tax year (April).

Re: working more than 37.5/48 hours a week you could request that you sign an opt out from the working time directive with your main employer:

http://www.direct.gov.uk/en/Employment/Employees/WorkingHoursAndTimeOff/DG_10029426

dazza.mk

PlutoinCapricorn wrote: »

Where income tax is concerned, if you earn more than £6,475 in your full time job then your personal allowance has been used up. This means that you will be taxed at the Basic Rate of 20% on the profit from your freelance earnings up to the band where 40% starts.

This assumes that the earnings from your main job = your personal allowance. If you are already a 40% tax payer in your main job then all earnings from the freelance work will be taxed at 40%

Also note (assuming you are seen as self employed) you need to register with HMRC within 3 months of starting the work or theoretically you are liable to a fine.

PlutoinCapricorn

If you work for these other companies on a freelance basis, you are responsible for paying tax and NI on your earnings. It is nothing to do with your existing employer, provided that you are not too tired and distracted to do your main work, that you do not use the facilities for your freelance work and there is no conflict of interest - are these other companies in competition with the main employer? Is there anything in your contract of employment about working elsewhere?

M.Holloway

Great advice so far, I shall check out the above resources and check my contract of employment.

Thanks MSE!

PlutoinCapricorn

It is definitely worth spending some time on fact finding before you commit yourself to anything.

Many people do extra work on top of their main job. They get extra income and experience this way. Some get a regular part time PAYE job, others are freelancers who work for a variety of clients. As a freelancer, you can work whatever hours you like. It is very important to understand that it is your terms and conditions that determine whether your relationship with a company is that of employer and employee or freelancer and client. If you make a regular commitment to one of these companies, then you are probably an employee; if you can set your fee and turn work down then you need to invoice them.

lozza1985

registering as self employed is pretty easy - if you ring the helpline they are really nice, I work full time but had to register as self employed for avon. I can't remember the exact figure, it was around £5k ish (I'm sure someone will know the exact amount) that you can earn as self employed without paying additional NI, if you ring they will send you a form to "opt out" of paying NI again, as obviously you are already paying NI for your full time employment so no point paying it twice if you don't need to.