Being employed and self employed

Jbrown93

Hi there, 

I’m looking for some advice regarding being employed and self employed at the same time. I’m currently employed by a supermarket earning £5000 per year on a part time basis. But I’d like to turn my hobby of arts and crafts into a business, alongside my supermarket job.  And was unsure of the tax implications of two jobs. And whether I would get tax relief as I would have to purchase equipment in my first year. 

Thanks in advance Jack 

NSG666

Have a good look on the HMRC website for lots of useful info on self employment, when you do or don't need to register and various articles on tax and allowable business expenses Browse: Business and self-employed - GOV.UK (www.gov.uk)

Equipment is tax deductible but you might not be in a position to pay tax anyway. Others may come along and advise you how to benefit in this situation.

One bit of advice I'd give is to make sure you keep records of all of your business activities such as sales and purchase invoices.

I just created my own Excel spreadsheet for this and put my receipts etc in a folder (although I think you can store them electronically). Month by month I logged my revenue and expenses so come year end I could fill in my self assessment fairly painlessly.

Good luck

chrisbur

Do you expect to earn more than £1000 a year to start with?  If not you can use the trading allowance details here....
https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income
You do not have to do anything until your business makes more than the £1000 a year allowance then you need to register as self employed but on the details given here (total taxable income £5000 per year) you will need to make over £7000 profit (ie income less expenses) before any tax is due.

Dazed_and_C0nfused

And was unsure of the tax implications of two jobs. And whether I would get tax relief as I would have to purchase equipment in my first year. 

Do you mean you are also getting a second job?  Or are you referring to running your own business as a "job"??

You may be entitled to some tax relief however that depends on what your turnover is likely to be.

If you actually only have one job, earning £5k, turnover another £5k through your self employment and have no other income then you won't be due to pay any tax so there wouldn't be any immediate tax reduction from any business purchases as you cannot pay less than £0 tax.

The expenses may save tax in future years but if so you are getting into areas where  advice of a local accountant would be sensible (ideally one recommended by trusted friends or relatives).

Savvy_Sue

Check your contract to make sure you're OK to do another job alongside your current one, although to begin with it's hard to see how it could be distinguished from a hobby to begin with.

Check your insurance and tenancy / mortgage agreement. You may need to get permission there.

Other comments cover the tax situation perfectly. 

Jbrown93

Thanks for the replies all. Just to clarify I would only have a permanent supermarket job and the second job I was referring would be running a business, working for myself. 

I’m doubtful I would earn over £1000 in profit in the first year. 

chrisbur

Jbrown93 said:

I’m doubtful I would earn over £1000 in profit in the first year. 

The £1000 in the trading allowance refers to income not profit.