Help with registering as self-employed for second income

FinanciallyUnsavvy

Urgh. I'm really sorry if this has been asked somewhere else!

The HMRC website is the least user-friendly site ever! Perhaps I'm being very naive but for the life of me I cannot find simple instructions anywhere as to what I need to do.

I'm in full-time employment and I've just started a second job that requires me to register as self-employed.

Do I need to follow the link to "Register for Self Assessment" on the HMRC website? Everywhere seems to be geared towards business owners or starting a new business.

And if I do fill out the Self Assessment registration, do I click the "I've been getting taxable income outside of PAYE" option or fill in "other" to say I've recently started as self-employed for a seconf income? I haven't actually received any payment yet, so shall I at least wait until after I've first been paid so I can provide a payment date to them?

I apologise - I realise I must sound incredibly dumb on this matter having to do your own taxes and whatnot has always baffled me...

jobbingmusician

Look at the mystery shopping sticky at the top of the Up Your Income (or whatever it's called now) board - lots of good advice about registering in the first post

Here we are https://forums.moneysavingexpert.com/discussion/4734623


Registering for tax
If you wish to start Mystery Shopping on a self employed basis, even just one job, you need to register with Her Majesty’s Revenue and Customs (HMRC) within 3 months or you could face a fine of £100. Please don’t think that because you’ll potentially only earn a few quid doing MSing that you needn’t register as self employed – it’s absolutely essential that you do as being caught out can be costly. The admin work involved in being self employed is so minimal that it’s not worth avoiding - and we're here to help you do it!

It might be a myth but there's been word of mystery shopping companies passing names of their shoppers to HMRC before, which can spark investigations is said shoppers are not already registered as self employed.

Forms and Guidelines you will need –
To register as Self Employed you will need to either ring HMRC on 08459 15 45 15 or download and send back the form CWF1 (http://www.hmrc.gov.uk/forms/cwf1.pdf )
If you prefer to register online, see this link:
http://www.hmrc.gov.uk/selfemployed/...er-selfemp.htm


You may also be required to pay class 2 National Insurance at the rate of £2.70 a week, but only if you earn more than £5,725(between 06/04/13 and 05/04/14) after expenses in any one year through Self Employment. This means earning more than £5725 in addition to your other sources of income.

If you think you will earn less than £5,725 in the financial year, then you can apply for a “Certificate of Small Earnings Exception” which means you will not have to pay NI (National Insurance) Contributions. The Exception application can be found at the end of this document CF10 - http://www.hmrc.gov.uk/forms/cf10.pdf

IMPORTANT National Insurance point: (thanks to Becles for this!)
If you earn less than £5,725, you don't have to apply for the Small Earnings Certificate and you can pay the £2.70 a week contributions.

If you are not paying NI in any other jobs, it can be worthwhile to pay these NI contributions. It will count towards any benefits you may need in the future and contributes to your state pension record.

For example, the self employed get one of two rates for Maternity Allowance, regardless of their actual earnings. If you have a Small Earnings Certificate, you get £27 a week. If you have paid enough NI contributions, you will get £136.78. It's a big difference!

Bear in mind that HMRC generally seem to have very long delays on processing these forms so don’t worry too much if it’s a few weeks before you hear anything. It's usually better to just call them!

Information on Self Assessment - http://www.hmrc.gov.uk/sa/selfemp.htm

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Working out how much tax you’ll have to pay
You will be taxed at your normal tax rates for your mystery shopping. This sounds desperately vague but means that your MSing income (profit) will be added to any other income you have (employment, generally) by HMRC and taxed at the following rates (between 06/04/13 and 05/04/14):

If your total income is less than £9440, you’ll pay no tax. (for 2013-14)
If your total income is more than this, up to £32,010 will be taxed at 20%.
Any earnings higher than this will be taxed at 40%.

Tax rates can seem confusing but following the above information logically will help you work out your tax.

If you have any job paying more than £9,440 per year then your MSing income will most probably be taxed at 20%

Unless you earn more than £7,755 by self employment, (for the majority just mystery shopping) National Insurance (self employment’s version of National insurance is known as Class 4) will not be applicable. If you earn more than this, it'll get figured out and paid along with your income tax on your self assessment return.

etc etc

FinanciallyUnsavvy

That's great - thanks so much!