Self Employed and starting PAYE

Gigibelle

Hello,


I am self-employed and have signed up to a temping agency that needs to put me on PAYE.


I don't know what box to fill on the HMRC Starter Decleration:


Please select one of the following statements:

1. A- This is my first job since last 6 April and I have not been receiving taxable Jobseeker's Allowance, Employment and Support Allowance, taxable Incapacity Benefit, State or Occupational Pension.
2. B - This is now my only job but since last 6 April I have had another job, or received taxable Jobseeker's Allowance, Employment and Support Allowance or taxable Incapacity Benefit. I do not receive a State or Occupational Pension.
3. C - As well as my new job, I have another job or receive a State or Occupational Pension.

I will continue to be self-employed whilst also hopefully getting cover work through the agency.

Samsung_Note2

Only you know the Answer to A..B OR C.

You can do both..just declare it on self assessment next April.

Gigibelle

Sorry I wasn't very clear - I suppose I'm asking if self-employed work counts as another job in this situation, or if it means this is my first PAYE job in which case it's A or if I do count my ongoing self-employed work as another job and therefore choose C...

System

You need to put down A because you've not had any previous PAYE income that generated a P45, nor do you get any taxable benefits. Your personal allowance will then be applied wholly to the agency income. That won't cause any issues because when you fill in your SA you'll do a section for employment where you'll put down what you've earned from the agency which will be added to your trading profit/loss and any tax you've paid via PAYE will be offset against the total income. If you make a loss on the self employment you would have overpaid via PAYE as your gross taxable income would be less than the gross income from employment so will get a refund if you've paid tax via PAYE.

Hope that makes some sense.

Gigibelle

THANK YOU for your concise yet thorough explanation - that is very helpful!

Dazed_and_confused

What Tarambor says is perfectly ok but you don't need to do that if you don't want.

You could opt for B. Your employer would use the exact same tax code as they would for A but it would only apply from now on so each time you earned more than £988/month (or weekly equivalent) you would pay some tax.

This helps mimise the tax you would ultimately have to pay through Self Assessment but it isn't something you have to do.

Option A is just as valid.