Pay tax through work or via tax return?

CollieGirlTheOriginal

Hi
I hope this is the correct section for this....
I currently am registered as Self Employed and pay voluntary NI but don't earn enough in total to pay tax.
I earn some of my money via a zero hour contract at a local school, exam invigilating - so some months I can earn quite a lot, some months nothing.  I don't pay tax through the school but get a payslip.  I declare what I earn on my Tax Return.
I earn other money through a couple of other self employed means, obviously also declared on my Tax Return.
My question is - am I better to carry on as I am, or am I better to pay tax through the school and then claim it back on my tax return?  And would this then mean that I don't have to pay voluntary NI?  I'm so confused!

Many thanks....

nick74

CollieGirlTheOriginal said:

My question is - am I better to carry on as I am, or am I better to pay tax through the school and then claim it back on my tax return?  And would this then mean that I don't have to pay voluntary NI?  I'm so confused!

Its entirely up to you, it makes no difference to your overall total tax liability for the year whether you have any tax deducted via PAYE or not, it all gets added together when you complete you tax return. Income tax has no effect on National Insurance, so it won't affect your ability to pay voluntary NI contributions either.

Dox

CollieGirlTheOriginal said:

Hi
I hope this is the correct section for this....
I currently am registered as Self Employed and pay voluntary NI but don't earn enough in total to pay tax.
I earn some of my money via a zero hour contract at a local school, exam invigilating - so some months I can earn quite a lot, some months nothing.  I don't pay tax through the school but get a payslip.  I declare what I earn on my Tax Return.
I earn other money through a couple of other self employed means, obviously also declared on my Tax Return.
My question is - am I better to carry on as I am, or am I better to pay tax through the school and then claim it back on my tax return?  And would this then mean that I don't have to pay voluntary NI?  I'm so confused!

Many thanks....

I'm not sure you have the options you think you have. If you get a payslip from the school, and are employed by them on a zero hours contract, you aren't self employed in respect of invigilating. If at any point you earned enough as an invigilator, the school is required to deduct tax under PAYE. Are you saying that you have reached that threshold (albeit only on an occasional basis, rather than regularly) but the school isn't deducting tax?

CollieGirlTheOriginal

Dox said:

CollieGirlTheOriginal said:

Hi
I hope this is the correct section for this....
I currently am registered as Self Employed and pay voluntary NI but don't earn enough in total to pay tax.
I earn some of my money via a zero hour contract at a local school, exam invigilating - so some months I can earn quite a lot, some months nothing.  I don't pay tax through the school but get a payslip.  I declare what I earn on my Tax Return.
I earn other money through a couple of other self employed means, obviously also declared on my Tax Return.
My question is - am I better to carry on as I am, or am I better to pay tax through the school and then claim it back on my tax return?  And would this then mean that I don't have to pay voluntary NI?  I'm so confused!

Many thanks....

I'm not sure you have the options you think you have. If you get a payslip from the school, and are employed by them on a zero hours contract, you aren't self employed in respect of invigilating. If at any point you earned enough as an invigilator, the school is required to deduct tax under PAYE. Are you saying that you have reached that threshold (albeit only on an occasional basis, rather than regularly) but the school isn't deducting tax?

Hi.  No, I don't earn very much at the school and never get anywhere near earning enough to pay tax in the year from any of my work.  Just not sure if I should be paying tax via the school and then reclaiming it on my tax return, or if it's okay to not pay tax via the school and just declare that I've earnt it on my tax return (hope that makes sense!). 

(I do get a payslip, still waiting for an actual contract but I have been working there a year...)

chrisbur

What is your tax code on your payslip?

CollieGirlTheOriginal

chrisbur said:

What is your tax code on your payslip?

500T

chrisbur

CollieGirlTheOriginal said:

chrisbur said:

What is your tax code on your payslip?

500T

Assuming that this code is on a cumulative basis (if it is not it will be followed by something like non-cumulative, X, 1,NC ) then if you earn less than aprox £5009 then no tax will be paid. If during the tax year your earnings go a bit higher than normal then some tax may be paid but this will be refunded to you by your employer if your average earnings then fall.  At the tax year end earn under aprox £5009 and no tax will be deducted, earn over tax will be deducted.  You do not really have any say in the matter so best not to worry about it.