Two Incomes and Tax

Mighty21

Hi all,


My wife is venturing on a second job. She will be Self Employed for this new role.


The job she holds at present is PAYE. 20% Tax payer.


I assume the HMRC would have to be informed as a first off, which is fine. but we have no idea as to what we would have to do thereafter, or how we work out what we would have to pay in tax, and if that effects the PAYE element?


I apologies for the vagueness of the email above. so many question etc don't quite know where to start.!


Thanks for any help


Mighty21

Suarez

She will pay 20% on all earnings between her salary and the higher rate band.

She will also have to pay class 2 (£2.70 p/w) and class 4 (9%) national insurance.

She can apply for an annual exception certificate if her earnings are below £5700.

Need more info really to give a good answer (figures?)

supersaverkerry

Hope you don't mind me jumping in on the thread, I just wondered about the exemption as I have just started to be self employed and will be letting hmrc know this week.

Ii was wondering with the £5700 for exemption is that just your earnings from self employment or your employee earnings too?

So if you had a job of £12,000 pa and then were self employed also earning £4,000 could you apply for the low earnings exemption?

Thanks

Mighty21

Thanks for your reply.


So all HMRC requirements stay as is with her PAYE, and won't change with the additional income?


The second self employed income will vary, initially, it will be around the £6k mark, until such a time that this job becomes her main job, and either leaves or accepts redundancy on her current PAYE role.


Presume that your posts' figures relate the second self employed income? in that she would have to pay £2.70p/w for NI, and 9% Tax?


Note your comment on the exemption.

oldharryrocks

Their is a dedicated tax forum http://forums.moneysavingexpert.com/forumdisplay.php?f=22

Mighty21

Thanks Oldharryrocks. I did look there first, but as a newbie, I didn't want to crash someone else's thread. Also, there is a huge amount of threads to sive through to try and fins something that may or may not be applicable. Just deemed is easier to start a new one. Thanks though buddy

Suarez

supersaverkerry wrote: »

Ii was wondering with the £5700 for exemption is that just your earnings from self employment or your employee earnings too?

So if you had a job of £12,000 pa and then were self employed also earning £4,000 could you apply for the low earnings exemption?

Thanks

Yes it is just for self employment. In your situation about you could apply for this.

Suarez

Mighty21 wrote: »

Thanks for your reply.

So all HMRC requirements stay as is with her PAYE, and won't change with the additional income?

The second self employed income will vary, initially, it will be around the £6k mark, until such a time that this job becomes her main job, and either leaves or accepts redundancy on her current PAYE role.

Presume that your posts' figures relate the second self employed income? in that she would have to pay £2.70p/w for NI, and 9% Tax?

Note your comment on the exemption.

It won't change anything with her PAYE.

Yes my post was based on Self employment.

Mighty21

Thanks for your help Suarez.

spike241

Mighty21 wrote: »

£2.70p/w for NI, and 9% Tax?

The 9% is also NI, tax will probably be 20% (depending on tax band)