A little extra on the side

transatlanticism

I work in full time employment as a designer and pay my tax and national insurance in the usual way (ie, it's sortd by my employer and all come's out of my wages before I even see it!).

I have also just managed to secure a bit of freelance work on the side, designing and building a website for someone else, which they will be paying roughly in the region of £1000 for.

Is this something I should declare for tax purposes? I haven't officially freelanced before in a 'paying client' sense (just the odd freebie or cheap jobs for friends and family here and there), but I am considering going completely freelance / self employed eventually and it does seem a substantial amount of money, considering I'd be gaining that on top of my normal monthly wage as well...

Any advice welcome

stardust09

I would say, yes. Any money you receive as a wage for services rendered should be declared to the taxman. You also need to register as self-employed within three months of starting to freelance otherwise you could have big fine. However, if you earn less than a certain amount each year (don't know what but about £4-5k?), you don't have to pay a certain class of NI contributions. You can apply for an exemption certificate for this.

Doomcow

im in a similar situation and found the whole situation super mega confusing.

i made a post in the employment forum on this site titled self-employed if you want to check it out the responses.

https://forums.moneysavingexpert.com/discussion/2610883

think im gona take the route, after asking at the CAB to try and get them to take me on a 0 hours contract - however that works...

i want the work, but i dont want humped if it goes wrong.

you should maybe consider professional indemnity insurance which i found for me to be about £600 or something.

downshifter

I work in a paye job (well a couple actually) and am also self employed doing freelance work. It's not at all complicated. Just register as self employed on the HMRC website, you will then get a tax return to do every year (online and tailored to your own circumstances, so it's straightforward). Read what it says on the HMRC site about it, keep decent records and go and enjoy the work.

You don't need to make any great decisions about tax NI etc, they will tell you if you need to pay it or not and the tax return will asses your liability for tax and any additional NI contributions. On the annual tax return you enter the info from your annual P60 from your everyday employer, and the income you've brought in from the freelance work, and it all adds it up for you. The glory of it is, is that you can see what you owe and check you've claimed everything to bring it down bit by bit but you have plenty of time to fill it in and submit it.

I put aside around a quarter of my earnings for tax etc, probably should be more but it works fine for me. Not at all complicated, it really isn't and if I can do it anyone can! But as someone else said, register sooner than later or you can get clobbered by a fine, they almost always carry this out. Registering costs nothing.

DS

transatlanticism

Thanks for the advice and encouragement.

My main worry was that I would have to inform my current employer what I was doing, as I wasn't sure if it was possible to be both employed and self-employed at the same time (which may or may not get political and complicated) but I gave HMRC a quick call this morning and they put my mind to ease, as it is possible... It does all seem very user friendly!

One of the best bits of advice I've come across, thanks to Doomcows handy link, is to put 25 - 30% of the income (for tax) into an ISA where possible... by the time you have to pay it, you'll have earnt a little tax free interest on it too! Nice

spursfan14

Well done on the freelance!! Yes declare everything. Once HMRC get their claws into you they won't let go!! :-p

newmee

Hope you don't mind a bit of thread highjacking but was reading with interest and wondered if anyone knew if I am best to do some self-employed stuff or not....unlike the OP I have been signed off sick from my current role and am in reciept of ESA. It is hoped that my wonderful employers will find me an alternative position within the org but in the climate no guarentees. I have enquired about some adhoc commision style work which would be on a self-employed basis but am reluctant to go forward in case what little I do have coming in will be taken away before I have even seen if I'm able to earn anything. IYSWIM. As the sole breadwinner for my family that is just not a risk I can take.
Anyone any advice?