Need some tax help please (extra income)

squ1rrel5

Posted this on up your income thread and they advised me to come here - hope someone can help!!

I am currently employed and earn approx 18k per year but am looking at various activities to up my income (mystery shopping is one)
I have read the instructions on the MS thread with regards to informing the HRMC but having opened the link to the form its just confused me even more!!
It says to register to become self employed and keeps talking about the difference between employed and self-employed.
Thing is Im obviously employed in my first job, paying the normal tax and NI contributuins - can i be classed as self employed at the same time and if so will this affect the income on my first job?? Someone mentioned something about a personal allowance on my first job (I have no idea what this is...)???
Please can someone clever explain this to me - have always been a bit stoopid when finances are concerned (trying to resolve this situation now obviously but find it really hard to get my head around stuff!)

Thanks people!!

runninglea

Hi - firstly you need to ring revenue to tell them you are becoming self employed as well.

Open up a separate bank account and put all your additional money in ang pay out any expenses in relation to income from here.

Your job income will continue as at present. The other profit from self employment is you responsibility. Pay tax through self assessment.

Any profit for tax year 6 april 2010 to 5 april 2011 will need to be completed on your SA return which has to be in by 31 Jan 2012. As will any tax due.

Keep aside 30% of any profits for tax

Chinkle

You can be both employed and self employed at the same time - which it sounds as if you are.

You need to register as self employed within three months of starting to do so, or you can be fined. This puts you on the HMRC system to notify you of when you will be required to do tax returns. You may also need to pay Class II national insurance, again they will contact you about this.

You complete self-assessment tax returns for your additional income. If you only started this additional work this tax year (ie since April 2010) then your deadline for the return will be 31st Jan 2012.

It's not complicated, but you do need to understand how it works as you will need to keep records of your income/outgoings for when it comes to completing your return.