Self-Employed but due to get Earnings via PAYE

elainemaul

Hi,
Can anyone advise please?
I have been registered as self employed for a couple of years and pay Class 2 NICs.
One job where I've been doing some add-hoc work has offered me a part-time job where they will want to pay me via their PAYE system, so presumably they will start paying my NIC payments? It is very part time; 2 days a week plus several blocks of weeks to cover school holidays when another person will be away.
However, I will continue some other (also very part time) work, so I would have to still complete an end of year tax return to account for this extra income regardless of getting some payments via PAYE.

My question! I'm wondering whether it makes sense to stay as self-employed? Are you 'allowed' to be self-employed and receive payments via PAYE? If this employer pays my NICs, do I just write to HMRC to explain and hence they will cancel claiming the class 2 NICS?

Thank you

PlutoinCapricorn

Many people on PAYE do some freelance work on top of it.

The employer will pay Class 1 NI, but you are still liable to pay Class 2 if your income from self employment is high enough.

If you expect to get more intermittent work, then stay registered as a sole trader.

elainemaul

Thank you for such a quick reply.
In actual fact, when I started as self-employed, I set up paying the class 2 NICS so as not to enrage :eek: the tax man, when, in actual fact, apart from this year, my self-employed earnings have been too low really.

Right at this moment, my earnings in this last year are borderline re needing to pay class 2 NICS. I'm due to start this job on 3rd November ....... will any earnings via that route therefore not classify as self-employed and hence not count towards deciding whether I need to pay class 2 NICS?
Thank you

McKneff

There is something in my head that is telling me Self employed people should also pay Class 4 contributions as well as class 2, or am I wrong.

elainemaul

Hi,
I'm sure you are right McKneff ( I vaguely remember looking into this when I became self-employed), but I haven't been earning all that much so I haven't needed to worry about them

elainemaul

Also, what would be the deciding factor as to whether I can claim mileage?
They will be paying me under PAYE but I'll only be going there 2 days a week plus other ad-hoc weeks.

I'm pretty sure the answer will be that I won't be able to claim mileage but just thought I'd ask

PlutoinCapricorn

Class 4 NI is a levy once your profits reach a certain amount. There are no benefits involved.

Some people elect to pay Class 2 even if they are exempt because of low earnings, because of the entitlements.

https://www.gov.uk/self-employed-national-insurance-rates

elainemaul

Thank you Pluto

Yes, after having set the class 2 NICs up, I asked for an update on how much my contributions over the years were and I've paid enough into 'the club' that I don't actually need to pay any more

I always knew there was an advantage to getting (slightly) longer in the tooth

PlutoinCapricorn

People on PAYE have far less scope for claiming expenses than sole traders do.

Commuting costs are not legitimate expenses, although special journeys to places other than the main place of work might be.