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Employee AND Self Employed?

Hello All

I'm currently employed 26 hours a week and am considering 10 hours further employment from home from a different employer.
However, I need to be self employed for the new job.

I don't earn enough to pay tax on my 26 hours job, but earnings from my new self employed 10 hours job may (or may not) just tip me over the tax threshold.

Please can someone explain how this will work, tax wise?

Many thanks
M.

Comments

  • LittleVoice
    LittleVoice Posts: 8,974 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Maureen43 wrote: »
    Hello All

    I'm currently employed 26 hours a week and am considering 10 hours further employment from home from a different employer.
    However, I need to be self employed for the new job.

    I don't earn enough to pay tax on my 26 hours job, but earnings from my new self employed 10 hours job may (or may not) just tip me over the tax threshold.

    Please can someone explain how this will work, tax wise?

    Many thanks
    M.



    When you become self-employed, you register with HMRC as such. They will advise of self-employed NI contributions which you pay through the year at a flat rate.


    You keep details of your spending (expenses) as well as your income from your self-employment.


    You will then submit a tax self-assessment return for both your self-employment and PAYE employment. HMRC calculate how much tax and additional NI is due.
  • So I would pay NI on the 10 hour throughout the year, with just one tax payment at the end of the tax year?

    What expenses could I offset against tax for working at home? Gas? Electricity?

    Also, would I need a "business use" home insurance for just 10 hours of home working a week?

    Sorry...lots of questions!
  • LittleVoice
    LittleVoice Posts: 8,974 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Maureen43 wrote: »
    So I would pay NI on the 10 hour throughout the year, with just one tax payment at the end of the tax year?

    What expenses could I offset against tax for working at home? Gas? Electricity?

    Also, would I need a "business use" home insurance for just 10 hours of home working a week?

    Sorry...lots of questions!





    First of all - apologies. The Class 2 (flat rate) NI contributions are no longer paid throughout the year but are calculated on an annual basis just as the Class 4 (percentage of profit) contribution at the time they process your return. I'd forgotten that that changed this tax year.


    HMRC are not bothered about how much time you devote to your self-employed work, only on the profit from it.


    Not knowing what sort of work you would be doing at home, I don't know what you could claim as expenses but presumably you will need to spend something on stationery unless everything, including submitting invoices, will be done online.


    You should tell your household insurers and they may increase your premium - so the increase would be a cost of your doing business. Will you require additional equipment/upgrades in order to carry out the work? You should also consider professional liability insurance.
  • HappyMJ
    HappyMJ Posts: 21,115 Forumite
    10,000 Posts Combo Breaker
    Maureen43 wrote: »
    So I would pay NI on the 10 hour throughout the year, with just one tax payment at the end of the tax year?

    What expenses could I offset against tax for working at home? Gas? Electricity?

    Also, would I need a "business use" home insurance for just 10 hours of home working a week?

    Sorry...lots of questions!

    You could claim a portion of your gas/electricity bills but is it worth the time calculating it to just get pennies.

    You say you're going to spend 10 hours a week working at home....therefore you can claim 10/(24*7)*(room floor area/total home floor area)*(total of gas and electricity bills) of the gas and electricity bills. The figure ends up being some small figure.

    I pay £43 a month in gas/electricity bills. I spend 30 hours a week on self employed activities in a room which is 6.5 sq metres in a flat which is 58 sq metres....so 30/(24*7)*(6.5/58)*(43*12) = £10 per year to save £2 in tax. You can claim a percentage of your rent, mortgage interest, council tax, home (buildings and contents) insurance and water as well.
    :footie:
    :p Regular savers earn 6% interest (HSBC, First Direct, M&S) :p Loans cost 2.9% per year (Nationwide) = FREE money. :p
  • just as a side note, there are new rules coming in for self employed as well, ive been self employed for years but haven't managed to read up properly yet, just thought id mention it so that you are able to double check any advice will still be current
    trainee millionaire (aka not there yet!)
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