Registering as a sole trader , while working full time for a business ?

bmcc9561

I am thinking about registering as a sole trader with HMRC to run my online business through.

Only problem is i currently work full time for somebody and my wages are processed as part of thier PAYE system.

What would happen if i became a sole trader and still wanted to work at my current position ?

I presume i would flag up as drawing wages from two separate businesses , when the PAYE is submitted. But as a sole trader i would have to calculate my own wages and NI through my business.

SO would i have to be paid as casual labour or something similar?

Any help would be appreciated

thank you !

PlutoinCapricorn

Many employees do freelance work in their spare time. There is no need for the employer to be aware of this, although you do need to check your contract of employment. It is best to register with HMRC as a sole trader once you have a sale/client i.e. shown that you can earn money this way.

You can pay income tax and NI separately and it will not affect PAYE at all.

bluenitsuj

I currently work full time for a business, and am also a registered sole trader running my own online business. As you know your tax and NI will be taken automatically I presume through your full time employer. You will have to keep your accounts for your sole trader business. You may have to pay NI 2 and NI4 depending on how much your earnings are. I opted out of one of them as I pay enough through my full time employment.

When you do your tax return, online is very quick and easy if you have kept your accounts up to date. Once you have your P46 at the end of the financial year, use the information on that for the tax return, and then you fill in all the details and income/expenditure for your sole trader business as well. The online form will tell you how much tax you owe or are owed.

Keep all your accounts as you can be audited at any time if they feel the need to.

Hope that helps.

Carl31

You can offset your business expenses to reduce your sole trader income, but your personal allowances will be used against your PAYE income, so you will be fully taxed on your sole trader income. Depending by how much could also push you into a new tax bracket