Doing freelance work whilst employed

prettypennies

I am employed in a school part time. I have been doing some freelance work in the holidays.

In order to be paid for the work, the school have invoiced the organisation I have been working for, who have then paid the school. The school then add the payment to my wages as extra hours and I am paid through the PAYE system.

In order to do this, the school are deducting 'on costs' before adding the remaining balance to my wage on which, my pension, NIC and tax are then deducted. I presume the on costs being deducted are to cover employer's NI and pension contribution and admin.

It takes a few months each time for the school to process this and it results in quite a chunk of the extra money I earn being deducted.

Would it be worth me setting up as a sole trader for the holiday work and paying the tax and NI through self assessment.

The work would probably be worth about £2000 a year.

Savvy_Sue

prettypennies wrote: »

Would it be worth me setting up as a sole trader for the holiday work and paying the tax and NI through self assessment.

It might well be, but it rather depends on the nature of the agreement for your freelancing whether this would be possible. The arrangement you describe makes it look as if you are provide your services elsewhere but as part of your employment with the school.

it sounds as if there must be some kind of formal arrangement with the school if they are invoicing the organisation and then paying you, less on costs. Did you do it this way initially to avoid self-assessment? Would the other organisation either employ you directly on a casual basis, or accept that you are self-employed?

You may not be self-employed, of course, and it's not your decision. It's late for me, so google test of self employment and see what I mean.

paddyrg

Without exact figures, who can tell? I'd imagine you also get the benefit of the school's administration and insurances, etc. Tax-wise you'll end up in the same place, may save a bit of NI, but be lumbered with the accounting overhead, insurance costs, etc. The end client may also decline to do business with a sole trader, of course, so that adds the cost of incorporation.

Running a payroll is a cost in itself - you may actually find your position isn't bad as it first appears!

prettypennies

The services I provide elsewhere do not form part of my employment with the school and the other organisation would be happy to work with me on a self-employed basis. The arrangement was originally set up as I was offered a small amount of holiday work with a friend who runs a Forest School company. As I was employed by a school rather than being self employed, I asked my school if they would be able to invoice the company on my behalf and then pay me through the PAYE system. This was how another lady that was doing holiday work for the company but employed by a different school was doing it as well, so seemed the easiest option at the time.

It has now become more of a regular arrangement and as such, my school have informed me that they are incurring costs which need to be passed on to me, which is perfectly understandable. As an example, if I earn £600, £110 are deducted as on costs before being added to my gross salary.

At present, I only do holiday work for the one other company, though there is the option to work for other organisations as well. I am covered by the holiday club's insurance policy when working for them, but if I were to register for self employment, would look into getting my own cover to allow me to work for other organisations as well. I would also be able to offset some of the expenses incurred in carrying out the freelance work

I would continue to be employed by the school as my main job and any freelance work is separate from my main job.

Hope that makes sense!

paddyrg

£600 invoiced, £490 on salary seems a pretty good deal to be honest as it probably covers (or almost covers) employer's NI and holiday pay.

pleasedelete

You will be getting pension on the earnings at the moment- good deal if you are a teacher

Would you need your own public liability insurance if self employed? That alone would be pricey for outdoor activities.