£10,000 how do I pay the tax?

yeharrr

I have a job and am also self employed with a side line business. My boss has asked me to consult on another business he runs. He will pay me £10,000, I just have to send him an invoice. Do I just put this down as services rendered and put it through the books of my own business?

HappyMJ

yeharrr wrote: »

I have a job and am also self employed with a side line business. My boss has asked me to consult on another business he runs. He will pay me £10,000, I just have to send him an invoice. Do I just put this down as services rendered and put it through the books of my own business?

What does the contract say? Did you and the client/employer sign the contract with you as an employee (employer pays the tax and NI due) or as an independent consultant (you pay the tax and NI due)? Are you paying class 2 NI contributions on your small business (assuming you are a sole trader-if you trade through a company your company would pay class 1 contributions on your wage as an employee of your own company)?

yeharrr

Thanks for replying. No contract yet as we are still deciding the best way to do it. The basic idea is that I will be paid a lump sum to be a consultant for the year (a lump sum gives me capital freeing me from interest on any loan I might have had to take out). It is a separate company to the one I work for (though in the same industry). Yes I am also a sole trader and pay class 2. My business is also in a related field. It just looks like the easiest thing would be to invoice the other company. A new contract would then be negotiated next year if my services were required.
Thanks.