What happens to tax if in full time employment and Registering as sole trader

asoe209

Yeah that would mean I have have made a net loss of 36so far.

So does that mean the tax will be taken out of my work?

Also will I need to inform my work that I have registered as self employed

anamenottaken

asoe209 wrote: »

Yeah that would mean I have have made a net loss of 36so far.

So does that mean the tax will be taken out of my work?

Also will I need to inform my work that I have registered as self employed

If you have made a loss, there's no tax to be "taken out".

Whether you need to inform your employer that you are doing self-employed work will depend on your contract. A lot of employers include a standard term in employment contracts that require employees to advise them and gain their agreement before undertaking other work. They should not withhold permission unreasonably - if you are not in competition with them and the hours you spend on your self-employment are not going to have a detrimental effect on your ability to do your job for them you should be fine.

You don't tell them because of tax. If any adjustment to your tax code were necessary, HMRC would notify them of a change of code and not say why the code had changed.

asoe209

I dont think there is any thing in my contract that says any thing like that.

jackomdj

Also losses will get offset on your tax return meaning you will end up with a a tax rebate.

asoe209

Right I have done the fist part and I have sent my registration off for sole trader today. which say it will take about a week for them to do there checks.

I had this acknowledgment after submitting the form.

My question now is do I need to wait for a week now for them to do all there checks before i appeal about NI as not earning profit?.

And when do I need to fill in the self assessment?

Please note: The information you have submitted will now be verified. The security checks that HM Revenue & Customs (HMRC) perform mean that in most cases it will take approximately a week for this process to be completed but sometimes it may take longer.

Once your registration has been successfully verified HMRC will contact you separately about each tax you have registered for. This will be by post except for most VAT applications which will use the customer communications service. You can access customer communications from the 'Your HMRC services' page.

VAT communications relating to Transfers of a Going Concern or Changes of Legal Entity will be sent by post.

HMRC recommend you print this information for your records by following the 'View and print' link below.

View and print
Further information
Once registered for Self Assessment and Class 2 National Insurance contributions, you still need to make arrangements to pay Class 2 contributions. For more information about paying (and the exceptions where you don't need to pay) follow the link Class 2 National Insurance contributions.

If you work as a subcontractor under the Construction Industry Scheme (CIS) you must register with HMRC before you start working.

If you are starting up in business and need more information follow the link Starting up.

Alternatively, to find out more about the help and support HMRC provide to business customers follow the link Business Education & Support Team.

asoe209

One thing sorry if its been said but is this wright.

My class 2 NI will be paid through my work
and Class 4 NI I wont pay until im over the £7k profit mark?

asoe209

Any replies?

PlutoinCapricorn

The NI deducted under PAYE is Class 1.

A sole trader must pay Class 2 monthly or weekly if they earn over a certain amount - this often changes in April but is around £5k.

If your entitlement to benefits is covered by the Class 1 NI in your main job, you can claim exemption from Class 2 under the small earnings rule.

If you are not paying Class 2, the Class 4 annual levy will not apply.