I'm employed and doing freelance work too - how do I work out tax roughly?

gunark

Hello,

What I hope is a simple-ish question but as it regards tax I doubt it!

I have a full time job but I also freelance as a journalist for tech sites and mags. I earn circa £19k in my full time, and so far since May 2010 have accrued £3000 in freelancing. I fully intend to pay my dues but I'd like to know roughly how much said dues could be. Does the 23-24% rule count here, or because that includes NI would it be less? I.e out of the £3000 would I need to pay £750 in tax?

Also, slightly related.. I bought a Mac for the job, off ebay but from a rental reseller so have a VAT receipt - that should be claimable? Also though, because I'm specifically a technology journalist I have had to get some gear to help do the job - iPad to review items and as part of features, 3DTV for reviews on films and games I can't review otherwise, Android mobile phone. It would be quite natural for the taxman to think I was taking the michael claiming against these normally, how can I prove they are used for my journalism or will they take my word?

Cheers!

jennifernil

If you are under a certain figure, something like £5000 or so, you can request exemption from paying the extra NI, so, on the figures you give, you would need to set aside only the 20% tax.

However, when you do your first SA, you will have to pay the tax for the year in question, PLUS payments on account for the next year. These will be based on what you declared in your SA, so, if you are due say £800, then at the same time (31st January), you will be asked to pay £400 "on account", and the other £400 by July 31st.

Quenastoise

gunark wrote: »

Hello,
Also, slightly related.. I bought a Mac for the job, off ebay but from a rental reseller so have a VAT receipt - that should be claimable? Also though, because I'm specifically a technology journalist I have had to get some gear to help do the job - iPad to review items and as part of features, 3DTV for reviews on films and games I can't review otherwise, Android mobile phone. It would be quite natural for the taxman to think I was taking the michael claiming against these normally, how can I prove they are used for my journalism or will they take my word?

I expect the taxman would argue that there is a private use element ie now you've got the Android phone you are using it for private purposes too. That private element would not be eligible for tax relief against your self-employment income. You would have to come up with a reasonable percentage for private use

suso

jennifernil wrote: »

If you are under a certain figure, something like £5000 or so, you can request exemption from paying the extra NI, so, on the figures you give, you would need to set aside only the 20% tax.

However, when you do your first SA, you will have to pay the tax for the year in question, PLUS payments on account for the next year. These will be based on what you declared in your SA, so, if you are due say £800, then at the same time (31st January), you will be asked to pay £400 "on account", and the other £400 by July 31st.

payments on account are only set up when the tax/ni not collected through PAYE is over £1000.00

gunark

Thanks all. I figured simple was optimistic! Hmm, ok I'll start with 20% in mind - how do I request NI exemption?

I'll have to sort out private use % but anything is a bonus really. I understand under the same % idea I may also be able to apply against mobile / ISP and phone line bills too, albeit a small.amount.

jennifernil

suso wrote: »

payments on account are only set up when the tax/ni not collected through PAYE is over £1000.00

Yes, I know, didn't mean to mislead, it was only an example.

jennifernil

gunark wrote: »

Thanks all. I figured simple was optimistic! Hmm, ok I'll start with 20% in mind - how do I request NI exemption?

I'll have to sort out private use % but anything is a bonus really. I understand under the same % idea I may also be able to apply against mobile / ISP and phone line bills too, albeit a small.amount.

Have you already registered as self employed? You can do it on-line, should have been done within 3 months. There is a £100 fine for not registering on time.

You can fill up an exemption request on-line too.

http://www.hmrc.gov.uk/working/intro/selfemployed.htm#3

gunark

jennifernil wrote: »

Have you already registered as self employed? You can do it on-line, should have been done within 3 months. There is a £100 fine for not registering on time.

You can fill up an exemption request on-line too.

Ah no. I know I need to get a UTL (?) but I spoke to an accountant friend a while ago who also worked in the tax office, she said get the UTL by May this year. Maybe I misunderstood. :eek:

Mikeyorks

gunark wrote: »

UTL (?)

UTR ....... as in Unique Taxpayer Reference.

jennifernil

If you stared earning as SE in May 2010, you should have registered by August 2010. So you may incur the £100 fine unfortunately. Not sure if there is any leeway allowed.

What you need is a " UTR "......unique tax reference......you need this to file on-line. Once you register as SE you will get one, and they will send you a paper return in April. You can either use this, or file on-line. You need to register for that in addition.

If you have ever filled in a return in the recent past, your UTR will be on that.

gunark

I.was close, although sadly not with registering it seems. Although I commenced the work late may I didn't get my first invoice paid September, I think that didn't help. Ill have to bite the bullet and go see them. Will this fine be levied as part of the tax payment too?