Tax and NI with second job?

mcmog

I'm looking into a second job at the moment, ideally about 20 hours a week at round about minimum wage. This would be on top of my full-time (37hours) job which pays about £17k p.a..

If I were to work in the local WMC for £5.50 an hour how would that affect my tax and NI? would I just do a P46 and it would somehow assimilate into my "proper" job tax? Or would I have to pay double NI and higher rate tax?

And if I was self-employed in my second job (yes, I'm seriously considering the "adult" phonelines!) do I just declare it to the Rev? I understand that if you earn under a certain amount you apply for an exemption certificate?

Oof, it's complicated! I might just go sell pies at Elland Road :rolleyes:

OliveOyl_2

You have one tax allowance (amount of money you can earn before incurring tax) which you can divide between two jobs. Or you pay tax on every pound earned in a second job.

It makes a 2nd job at minimum wage look a lot less attractive?

mcmog

So effectively I'd be taxed twice, or I'd just be taxed on 22k a year rather than 17k? confuzzled!

therivierakid

And how does it affect NI contributions?

overdrawn30

Assuming you are paying NI on your employed wages at the correct rate (otherwise you could be jeopardising access to certain government services), and assuming you would be earning less than the current limit, you can apply for a Certificate of Small Earnings Exemption which, if granted by HMRC would eliminate you from paying additional Class 2 contributions on your self-employed income.

You would still be liable for Class 4 Contributions which are paid, calculated and collected at Self Assessment Tax Return time!!!!

McAzrael

I'm pretty sure that:

If you are employed then you will pay income tax as if you have one job paying the combined income. Your principle employer will be given a tax code to reflect your personal allowance and your secondary employer(s) will be given a zero tax code - no allowance.

You get an NI allowance each time you are paid (£100/week or £433ish/month) and for each job. Two jobs = two NI allowances. Irregular income = any unused allowance in each pay period is lost forever.

Trow

McAzrael is right - you will pay 22% tax on everything you earn at the second job (no point in splitting tax code, as you will use it up fully in your main job). You will pay NI at 11% (I think) on anything over the NI threshold.

The benefit of that, if you pay NI in both jobs, you are entitled to SSP or SMP from both as well if you are ever off sick/pregnant....

ginico

Previous posters are correct - any second employment will be taxable at the 22% and Niable over the threshold, but this is not to your disadvantage as people seem to feel.

If you worked those hours as overtime on your full time job, then you would pay 22% tax and NI on the whole amount. If you work it as a second employment, you only pay NI over the threshold, therefore you are actually better off working the hours for a second employer!

Hope this helps
ginico

(PS - I work in payroll, so although I have never posted before, I do know about tax/NI!)

kayak83

Hi, I tooo have a similar question to the OP. I work full time and also have had weekend/evening jobs in various hotels over the past year.
However, I have recently been offered work over weekends for an events company.
The problem that I have is that I will have to invoice the company and thus pay my own tax. How do I go about being self employed for a second job?

McAzrael

Your tax return will include your earnings and PAYE deductions from your regular job(s). So long as you get your return in by September 30th (this deadline may be changing next year) HMRC will tell you what you owe.

KPD1

All sounds somewhat complicated, this is probably why most people who do a second job only work for cash. Most tradesmen I know who do extra work, in addition to their full time job, will only ever accept cash. I'm not saying its right, but the complexities of our Tax system encourages people to do this, as well as the prospect of loosing 40% of their extra money in Tax.