Declaring a 2nd Income

mcbaggert

Hello,

I currently have a job and paying all the usual NI and taxes via my employer. I now have an opportunity to do some consultancy work on the side that I don't want my employer to know about.

I'm trying to avoid setting up an LTD and doing my own tax and wages; is there a more simple way to declare a 2nd income and pay the appropriate taxes etc?

The consultancy is likely to last only from now (end of July 2012) until December this year.

Thanks for any advice!

spadoosh

I think youd struggle to do this without informing your current employer, not even mentioning its probably in your contract that you have to inform your employer of any other jobs you have.

You wouldnt need to set up a LTD company you could easily do it as selp employed and filing a self assesment tax return. But like i said i think your employer will know as your tax code will likely change and how tax is collected will be different.

mcbaggert

spadoosh wrote: »

I think youd struggle to do this without informing your current employer, not even mentioning its probably in your contract that you have to inform your employer of any other jobs you have.

You wouldnt need to set up a LTD company you could easily do it as selp employed and filing a self assesment tax return. But like i said i think your employer will know as your tax code will likely change and how tax is collected will be different.

Thanks for the advice spadoosh!

Would the 2nd income tax not be collected 'separately' (apologies for my lack of the terminology, I'm no accountant)?

Completely take your point on the employer problem. Our contracts actually state a 2nd income is fine if it's 'self employed'. I work in online where side projects are fairly common - I just don't want them to know for personal reasons.

The self assessment all looks fairly straightforward then - I'm still quite green on the technicalities of physically 'paying' the tax contributions however. If anyone knows how the process works (or can point me in the direction of a good info source) that would help immensely.

Thanks for the help!

SueC_2

I'm not a tax expert, but I would have thought you could just declare the additional earnings on your self-assessment form at the end of the tax year, ie. next April.

I think you can opt to pay any outstanding tax either directly or via an adjustment in your tax code. If you paid directly, your employer would be none the wiser. And even if you went for adjustment of your tax code, your employer wouldn't need to know why it had changed - it could be for any number of reasons (rental income, investments etc).

Not sure how NI would be handled though.

Why not try calling your tax office? Contrary to popular opinion, whenever I've contacted mine they've been pretty helpful.

spadoosh

hmrc.co.uk** will have all the info you need. **edit, lol, scrap that its www.hmrc.gov.uk

Essentially you fill out a self assesment form at y/e (or april) hmrc check and issue you an invoice for the taxable amount. and you have a certain amount of time to pay it in. There are complications when it comes to working out how much tax you owe (offsetting costs against profits etc) but it sounds fairly small scale at the moment and shouldnt be too complicated.

You might be able to get away with not telling your employer exactly what youre doing job wise but anyone in payroll with some idea of what theyre doing would notice you were getting a second income or at least your tax entitlements werent adding up. But as far as there aware it could be from selling on ebay/carboots etc. So dunno but personally dont think it would be too infringing on your personal reasons

russxiii

all you need to do is speak to your tax office and get them to change your tax code to self employed....if anyone asks at your company either tell them its none of their business or make something up.

they will get a tax code change reminder and thats it, notifying them your self employed will do you no harm.....you could be selling toy boats technically....

getmore4less

if the current employment contract excludes you from doing the consultancy work on PAYE then you will have to register self employed and do it that way.

If you can do it PAYE then you can request the personal allowance is all used on the first job and get the second fully taxed.


When they do find out will it cause issues?

mcbaggert

Thank you all for your help - incredibly helpful!

I enjoyed the line "either tell them its none of their business or make something up.". Direct!

A have a few other little Q's, but as suggested probably for the 'surprisingly helpful' tax office.

Thanks again all.

spadoosh

mcbaggert wrote: »

'surprisingly helpful' tax office.

Just remember theyre like everyone else, much happier taking money off you than giving it back;)

BobQ

How would your employer know why the tax code was different to that which would apply based on your salary alone. You might have a lower code to collect more tax because you have a buy to let property or maybe two.