Please help with second income

DDT_2

Could anyone help with giving me a rough idea of how much tax I'd have to pay on second income please?

I have a full time job @30k per annum
then as a side line I'd earn between 8k - 10k (excluding expenses) including expenses it'd probably be 6-8k.
I've declared as self employed for my extra income with the HRMC etc.

I'm just wondering if it is worth my while or not will I have to pay 40% tax on it?

Any help would be greatly appreciated.

Many thanks.

londoner01

The first £7,475 you earn (assuming you are under 65, not blind, etc) is non-taxable.

The next £35,000 you earn on top of that, is taxable at 20%.

So at the moment if you earn 30K+10K per annum max, regardless of expenses, you still fit under the £32,475 (it will be a bit lower for 2012-2013).

Even if you go after that quota, you will only be taxed 40% for amounts over that quota. After you reach that quota, simply take on new contracts only if they are worth it, considering that the money in your hands will be minus expenses and minus 40% tax.

The one thing I am not sure about (having never found myself near the borderline) is whether your self-employed expenses are discounted from the total income when looking at which tax band you'd be in, so I would pass that question to someone else here.

Elaine_Wilson

If you have no other income the tax rate would still be 20%. Higher rate does not kick in until your total income is above £42,475.

You may also be liable for a small amount of Class 4 national insurance contributions which is calculated at 9% of your self employed income above £7,225.