dual Employment/Self-Employment advice

paddycm

Hi, I own/run/manage a small business as a sole trader in Scotland, but live and also am employed in England, earning a salary.

The business pulls in around 12k profit annually and my salary is pretty average. I have employees on payroll, which I can manage, but the income from the business simply lands in my bank account and I only report it as a lump sum of income when I do my annual tax returns. Meanwhile my salary comes monthly with the (salary-only) tax paid on it already by my employers.

I only recently started having a job alongside running the business, and so I'm just not sure how this affects me.

So my concerns are about these things:
 - earning income in two different tax regions
 - earning income across two different sources
 - how to know how much of the 12k I can actually spend and consider 'take home'

Is there anything I need to be aware of? Anything I need to be declaring/doing to make sure I'm not over or underpaying tax? Is there anything I can take advantage of? I'm sure this isn't a unique situation but I have no idea where to go for guidance, so would really appreciate any advice! 

Jeremy535897

If you live in Scotland, you pay tax on income at Scottish rates, even if the job is in England. See https://www.gov.uk/scottish-income-tax/who-pays

Rates are here: https://www.gov.uk/scottish-income-tax

Your tax and NIC on self employment, assuming the employment covers all your personal allowances and starter rate, is 29% in 2021/22. On £12,000 profit, assume tax and NIC of £3,640 (29% plus class 2 NIC) unless you are paying higher rate tax.

[Deleted User]

Jeremy535897 said:

If you live in Scotland, you pay tax on income at Scottish rates, even if the job is in England. See https://www.gov.uk/scottish-income-tax/who-pays

Rates are here: https://www.gov.uk/scottish-income-tax

Your tax and NIC on self employment, assuming the employment covers all your personal allowances and starter rate, is 29% in 2021/22. On £12,000 profit, assume tax and NIC of £3,640 (29% plus class 2 NIC) unless you are paying higher rate tax.

Would the op not just pay Class 4 NIC on profits over 9568? 

Jeremy535897

[Deleted User] said:

Jeremy535897 said:

If you live in Scotland, you pay tax on income at Scottish rates, even if the job is in England. See https://www.gov.uk/scottish-income-tax/who-pays

Rates are here: https://www.gov.uk/scottish-income-tax

Your tax and NIC on self employment, assuming the employment covers all your personal allowances and starter rate, is 29% in 2021/22. On £12,000 profit, assume tax and NIC of £3,640 (29% plus class 2 NIC) unless you are paying higher rate tax.

Would the op not just pay Class 4 NIC on profits over 9568? 

Yes, good point.

sheramber

The OP says he lives in England.

Where have you lived for most of the tax year?

If you move to or from Scotland

You pay Scottish Income Tax if you move to Scotland and live there for a longer period than anywhere else in the UK during a tax year (6 April to 5 April the following year).

You must tell HMRC of your new address if you move to or from Scotland. You may pay tax at the wrong rate if you do not.

SO, if you have lived in England for most of the tax year you will pay tax in England.