PAYE Employee - Additional Earning Options..?

GT85N1

I'm employed full time as a PAYE employee.

I've got a few opportunities to earn some extra money doing various work for other people/companies (it's not for competing/rivals etc so that's not where my question comes from)

Just wondering where I stand on my position in terms of receiving payments and taxes etc..

There might be some offering to pay cash but other companies I might work for wouldn't. I'm just looking to make sure I can do things correctly.

Can I be classed as self-employed/sole trader etc as I already have a PAYE job? Would I just invoice them as 'myself'.. What about tax liability?

Any advice is welcome. Thanks

Savvy_Sue

make sure your contract of employment doesn't require you to get permission to do extra work, but then there are two options:

the other payments are made through PAYE, charging you 20% tax on the whole amount because you've used your tax free allowance on your main job,

OR you register for self-assessment with HMRC and pay tax on the additional payments after the event. Obviously this requires some self-discipline.

GT85N1

Savvy_Sue wrote: »

make sure your contract of employment doesn't require you to get permission to do extra work,

Already checked and looked into this. No issue with the contract and I've actually spoken to director who said there is no problem.

Savvy_Sue wrote: »

but then there are two options:

the other payments are made through PAYE, charging you 20% tax on the whole amount because you've used your tax free allowance on your main job,

OR you register for self-assessment with HMRC and pay tax on the additional payments after the event. Obviously this requires some self-discipline.

Afraid tax free allowance is long gone, I pay higher rate tax already - does this mean that ANY income I gain from elsewhere is subject to 40%...?

GT85N1

blondebubbles wrote: »

Just to add, you can't choose whether to be self employed or employed. It's based on the terms of the engagement.

http://taxaid.org.uk/guides/information/issues-for-employees/employee/employed-or-self-employed

I'm full time employed at my normal job - I'm wondering where I stand on the other 'one-offs' as to how I am then classed (def. won't be employed with them)

GT85N1

blondebubbles wrote: »

You can be employed in more than one job. Or you can be a mixture of employed and self employed.

As mentioned it depends on the terms. If you won't be employed in the additional work then you will be self employed. You would need to register with HMRC and complete a tax return each year to declare all income received. Then you would pay any additional tax and national insurance due.

If your employed income already puts you into 40% then any profit you make from self employment will be subject to 40% tax (45% if over £150,000) as you only get one income tax personal allowance.

You'll have additional national insurance to pay if:
Class 2 if your self employed profits are £5,965 or more a year
Class 4 if your self employed profits are £8,060 or more a year

Current self employed NI rates are:
Class 2 £2.80 a week
Class 4 9% on profits between £8,060 and £42,385 and 2% on profits over £42,385

https://www.gov.uk/working-for-yourself/what-you-need-to-do

:beer:

Thanks for that. Very helpful.

I've got some reading to do!

blondebubbles wrote: »

....me already puts you into 40% then any profit you make from self employment will be subject to 40% tax...

I've never worked as self employed before so will need to get up to date on this side of things.

I shouldn't really have many costs/expenses as the work is mainly 'me'. (i.e. IT knowledge so setting up/fixing PCs, networks etc) - is every penny going to then be classed as profit?

Can I deduct some travel at least? What else?

PlutoinCapricorn

You need to decide whether or not the loss of time is worth the high taxation rate. You can claim for travel, and a small percentage of your running costs at home. It sounds as though you will be working on site, so will not be using a lot of extra electricity etc. at home for this work.