AAah anyone kow what's the best thing to do..

WHA

harryhound wrote: »

Is there a point in the balance between employment and self employment where NI kicks in or out, creating a "why did I bother" effect.

There is the national insurance threshold - £5035 for employment income and about £4500 for self employed, under which no NIC is paid. Therefore the optimum is to earn under these thresholds, so no NIC is paid at all. You could "earn" £9500 without paying NIC, whereas is you earned that same £9500 in employment or self employment, you would be paying NIC. That's the difference between NIC and tax - for NIC, you look at each income source separately, but for tax you add it all up together. It is interesting to note that in the above example, you'd pay the same tax whether your hypothetical earnings were £9500 from one source or two, but the NIC could be very different.

gabyjane

nealnomoney wrote: »

Oh my god gaby jane i cant believe you are arguing with WHA ( a practising accountant) wise up and listen to him he knows best.

For your information i wasn't 'arguing'. In the question about where did i get the idea that there were 2 amounts, well on my inland revenue printout?? it's a fact that if you have 2 jobs you get taxed more, that wasn't my issue it was wether id'e be better off losing my employed job?. Also if it was a stupid question others would have given the same useless reply you have. Thanks for the reply but it's not really help to me is it?

jem16

gabyjane wrote: »

it's a fact that if you have 2 jobs you get taxed more,

You only get taxed more because you have a greater income.

that wasn't my issue it was wether id'e be better off losing my employed job?.

On your £3400 paid job you will pay around £750 in tax. If you don't have this job you will pay £750 less tax.

Basically you would be worse off by £2650.

As has been said by WHA and Clapton, it's down to total income. If you have more income you will pay more tax. If you have less income you will pay less tax. It would never be worthwhile giving up income.

harryhound

WHA wrote: »

There is the national insurance threshold - £5035 for employment income and about £4500 for self employed, under which no NIC is paid.

Many thanks for this information.

I have just one last thought:
My self employed income will be spread evenly over the year as far as the tax man is concerned, even if I spent all summer lazing by my swimming pool (I wish).

However my employed income could vary greatly week by week or month by month. Would it be sensible to spread it evenly over the year if possible or does it "all come out in the wash" by the end of the year in the way that PAYE takes care of tax by the year ?

Harry