PAYE and sole trader confusion

shamilt1

Hi all. I’m currently employed and I’m wanting to set up as a sole trader in my spare time to earn some extra income. As I already earn over £11500 a year in my daily job, I understand that all my extra income will be taxed. What I’m not sure of though is the NI contributions. The info I’ve found tells me I will pay Class 4 NI at 9% if my profits are £8,164 or more a year...are these profits solely on my earnings as a sole trader or does it class what I’ve earned in my daily job as profits too?

agrinnall

You seem to have ignored Class 2 NI, which starts from profits of £6025. Your earnings from employment have no impact on your SE profits.

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

TheCyclingProgrammer

National insurance is calculated on a per employment basis and that also includes self employment so you only need to consider your self employed profits when calculating class 2 and 4 NIC.

shamilt1

Thanks guys for clearing that up. I ignored class 2 because I read it’s going to be abolished in April 2018....I hear that measure is now going to be delayed until 2019. Thanks again.