Teacher Declaring Extra Income to Tax????

tyllwyd

For the private tutoring, in the advice so far everyone is assuming that you will be self-employed, but it is possible that you will be employed on a part time basis to do this tutoring?

If you are self-employed, I always get confused with NI but my understanding is that if you are going to be under the NI threshold in your self-employed job, you can apply for a small earnings exemption from NI.


Another option to look into is whether since it is a small amount you should declare your earnings as casual earnings in the self-assessment tax return rather than registering as self-employed.



If you do register as self-employed, make sure you keep simple accounts, with a record of all your income and expenses and keep all your receipts. It might make life easier if you have a separate bank account for your tutoring, so you don't get everything lost in your day-to-day banking.

mildred1978

Surely if NI is being paid in the day job, no contributions are 'needed' in the tutoring job (if under £97 per week)??

Pennywise

mildred1978 wrote: »

Surely if NI is being paid in the day job, no contributions are 'needed' in the tutoring job (if under £97 per week)??

If the s/e earnings fall within the class 2 NIC threshold currently £5,315 p.a. then the OP can claim an "exception" not to pay the class 2 NICs - but the exception needs to be claimed - it's not automatic. Class 4 NICs won't be due on s/e profits under £7,225.

S/E NICs are due regardless of paying NICs on employment elsewhere if the thresholds are exceeded. It's quite possible to end up paying class 1, 2 and 4 NICs if you are employed and self employed at the same time, if your income from each source is over the thresholds.

Just shows how complex it gets with having different rules for tax and NICs - it's about time the rules were alligned or even better if NICs were scrapped and BR income tax increased - would be far easier for people to understand.

chrisbur

mildred1978 wrote: »

Surely if NI is being paid in the day job, no contributions are 'needed' in the tutoring job (if under £97 per week)??

NI is a bit more complicated than that. Assuming that both jobs are paid under PAYE then if the two employers have no connection with each other then NI is assesed on each job seperately and you start paying at £139 a week or £602 a month on each job. If however there is a connection between the two employers or if there is only one employer for both jobs then the two wages are added together and only one NI free allowance is given on the total, unless this cannot be done due to the way the wages are paid then it goes back to the seperate jobs method of two allowances.

CLAPTON

for NI purposes then the crucial issues here is the employment staus of the OP
is the tutoring unrelated to his day job?
is it self employment or PAYE?

Mikeyorks

If the extra £800 is a one off? It may be worth asking HMRC if they will code it out - if it is self employment.

It's not strictly for 'employment' income but it has been known. And saves cluttering SA for small and short period sums :

http://www.hmrc.gov.uk/incometax/ways-to-pay.htm#5

samlovescomps

Wow thanks everyone for the help.

The tutoring is completely seperate from my Full time job. It will only be a total of £800. What does it mean "to code it out"?

To be honest I think I will just call Tax people and ask them exactly how much it will be before I decide what to do.

Thanks everyone xxxx

agrinnall

samlovescomps wrote: »

The tutoring is completely seperate from my Full time job. It will only be a total of £800. What does it mean "to code it out"?

What Mike means is that HMRC can alter the tax code for your main job so that the tax on the £800 is collected through PAYE between now and next April. I'm not sure what would happen about NI if they do agree to this, maybe they would just ignore it for a one-off payment.

samlovescomps

agrinnall wrote: »

What Mike means is that HMRC can alter the tax code for your main job so that the tax on the £800 is collected through PAYE between now and next April. I'm not sure what would happen about NI if they do agree to this, maybe they would just ignore it for a one-off payment.

Sorry to keep asking but do you know if I do this will they put me on BR Tax Code where I am not entitled to the £7475 p.a. tax free? If they do this there is no point me doing the tutoring because I will be taxed an 20% of £7475 which is £1495 and wont earn that much for tutoring. ???

mildred1978

You won't lose your tax free allowance. Why would you think that?