Tax advice - Consulting on side of PAYE job

RD42

Hi All,

I am taking a consulting job for £1,000 a month for 12 months.This will be in addition to my regular PAYE job.

Am I right to assume that when I put this into my tax return I will end up paying tax at might highest rate (40%), but nothing more (no NI etc.)? 

Thanks.

Jeremy535897

Is this consulting job not paid under deduction of PAYE?

RD42

Jeremy535897 said:

Is this consulting job not paid under deduction of PAYE?

I assume I will invoice them as an individual.

Grumpy_chap

RD42 said:

Jeremy535897 said:

Is this consulting job not paid under deduction of PAYE?

I assume I will invoice them as an individual.

Then you need to register as sole trader and keep business accounts.
Of the £1k monthly, genuine business expenses may be deducted and the balance remaining becomes your 'drawings' (salary) subject to tax at the appropriate marginal rate.
Probably worth opening a separate business bank account and engaging an Accountant.

Jeremy535897

Assuming you start your new business by 5 April 2022, you will need to register as self employed by 5 October 2022 (unless you already have a self employed business). See
https://www.litrg.org.uk/tax-guides/self-employment/how-do-i-register-tax-and-national-insurance

Re NIC, see:

https://www.litrg.org.uk/tax-guides/self-employment/what-national-insurance-do-i-pay-if-i-am-self-employed

RD42

Thank you both, more paperwork than I was expecting, but I can now see what I need to do.

DoctorStrange

Will your consultancy operate under sole trader rules?

If not, are you aware of the IR35 / off payroll rules?

Pennywise

RD42 said:

Jeremy535897 said:

Is this consulting job not paid under deduction of PAYE?

I assume I will invoice them as an individual.

That's a big assumption.  Lots of people get caught out by masking that assumption and then discover they're being paid via an agency/umrella or have to form their own limited company.  You need to check how you'll be paid, the formalities etc.  Should be clear in the contract.