Help.. Self Employed as well as Employed?

jadenicole_2

Hi there,

I wonder if anyone can help..

I have been employed full time for 7 years in an office based job, earning a good salary and paying Tax/National Insurance on PAYE.

Last week I applied with a couple of agencies for part-time promo/modelling work for extra cash, and have already secured a contract for 8 days work.

A lot of these agencies use the PAYE method, so no problems there, but the agency whom I have secured this contract with treat me as self-employed.

I've searched a little via the web and see that I should register as self-employed, but have found lots of people (a lot of students) who have just never bothered.

I know I should, but a friend of mine suggested it is a lot of hassle, and I may never even get any more work of this nature, and thinks maybe for this one-off not to bother.. but if I secure more work to do it then?

I'm not sure what to do.. is it really that much 'hassle'? :huh:

MrRedundant

No it isnt and you must register. In essence its a form to complete and requires you to keep records. Not particularly difficult.

You could chance it and pocket the cash but that depends on your own morals and the likiehood of getting caught.

jadenicole_2

Thanks.. and then do I have to save up the money and pay the tax once a year? How would I know how much to save? It is the same rate as PAYE? Sorry for all the questions!

I must admit, I did think should I just chance it as a one off, but morally I don't think I could

agrinnall

jadenicole wrote: »

Thanks.. and then do I have to save up the money and pay the tax once a year? How would I know how much to save? It is the same rate as PAYE? Sorry for all the questions!

I must admit, I did think should I just chance it as a one off, but morally I don't think I could

Yes, you'll need to complete a self assessment after the end of each tax year in which you earn money through self employment (by the following January at the latest). The tax will be due at the highest rate you currently pay unless the additional pay pushes you into a higher tax band. I'm not sure whether you'd also have to pay any extra NI contributions, but someone else will know.

Poonai

Interesting post.

Another question....

Joe Blogs has two jobs:

(1) Job 1 - Employed and earning £34k per anum before tax. Taxed 20% via PAYE

(2) Job 2 - Self Employed and earns £10k per anum before tax

Since this person earns £44k per year will he be taxed at the 40% tax bracket? Or will both jobs be treated and taxed differently?

Sorry if this is a dumb questions.

telboyo

Poonai wrote: »

Interesting post.

Another question....

Joe Blogs has two jobs:

(1) Job 1 - Employed and earning £34k per anum before tax. Taxed 20% via PAYE

(2) Job 2 - Self Employed and earns £10k per anum before tax

Since this person earns £44k per year will he be taxed at the 40% tax bracket? Or will both jobs be treated and taxed differently?

Sorry if this is a dumb questions.

Total erned for year is 44k
Tax free allowance
6475
taxable income = 37525

first 37400 at 20%
anything above at 40%
total tax payable =7480 + .4*125 =50
= 7530

moneysavingmonkey85

I am in a similar position too, I started a new 2nd job today. I currently don't pay any tax in my 1st job, as its PAYE and I haven't gone over the allowance (part time & term time only). The new job will probably stay quite low hours too. Is it true that I cannot split the tax free allowance even if they don't total a taxable amount? I tried looking on the hmrc website but it just confused me. How soon do you have to register after you start a new job?
Thanks

MsHoarder

You will pay 20% PAYE on your second job, but you can claim this back from HMRC at the end of the tax year if you didn't earn enough to need to pay it.

nzmegs

It is really simple to register as self employed. You can call them. You just need a name for your business, but your own name is fine for that. You need to do it as soon as you earn any money from your self employment and within three months of your first paid self employed job.

I used to work employed and self employed and it was easy to manage. You will be sent a self assessment in April and you just need to put down your earnings and expenses and pay tax on the difference. Keep receipts for travel to your modelling jobs, parking tickets, clothes and makeup you might need to buy for the work and anything else which you spend in order to carry out the job. youc an also calim a little bit for your working from home expenses eg if you use your computer to keep records or to apply for work. Claim everything you can as this will reduce your tax bill. The HMRC site has a list of allowable expenses, but in p[ractise you just need to be sure you could justify them. For example travel to work is justified, but drink at a bar afterwards is not!

I put aside around 20% of my earnings for tax, but as already mentioned this does depend on if you are pushed into a higher tax band by earning more. I usually have to top this up when the payment is due. But you have from April until the following January to pay the bill so it is possible to save up for the tax even if you don't put it aside.

steve1980

You'll need to fill out one of these:

http://www.hmrc.gov.uk/forms/cwf1.pdf

and one of these:

http://www.hmrc.gov.uk/forms/cf10.pdf

jadenicole_2

Thank you very much, some great help. I'm going to do it straight away as I've had a call today about another 4 days work on a seperate job.. so fingers crossed it may become regular.

At the moment with my main employment I am in the 20% tax bracket and this extra work won't take me into the higher one.. so shall I just put aside 20% of everything I earn?

I'm not sure why but I was thinking you pay a lot more on a second job, because I worked in a bar one on PAYE with a different tax code and I seemed to get taxed about 1/3. I'm guessing this is different though.

Thanks in advance!