Just starting out and confused by Tax

davebristol1

Hi everyone,

I'm new here and after looking through the forum i cant seem to find the answers i need for my question,
I'm sure that for the right person its a simple one but for me its very confusing !!
Basically I'm employed full time during the week and pay my tax etc (PAYE)
I'm thinking of going self employed doing work on evenings and weekends in a different trade but will not have any fixed hours, I may work a couple of hours a night for a few weeks then nothing for a month or 2,
what i need to know is what do i do about tax ? i have looked on the HMRC website but as i said i find it quite confusing and dont want to end up getting a fine or anything :( how do i know what to pay and when ?

i hope you understand what im trying to say

Thanks Dave

dan.date66

It is a self-employment and as such you have to register with HMRC straight away regardless of how much money you will make - if you don't make anything, or make a loss, that gets declared on the end of year return (yes, you will have to do one of those as well!) Basically all your income will be added together on the return and if you make a profit from the self-employment, you will pay tax on that at your marginal rate.

Same for NI - you will need to pay a direct debit for class 2 although you are already paying class1 on your employed earnings, unless;
a) your self-employed earnings will be below the de minimis limit (approx £5,500 p.a.)
b) your employed earnings are high (approx over £50,000) when you may be over the maximum limit for NI

If you are starting self-employment now, the first tax return you would have to do is 2012-13, and the first tax due not until January 2014. So plenty of time, but register as soon as you start!

John_Pierpoint

http://www.hmrc.gov.uk/selfemployed/register-selfemp.htm