My tax is getting a bit complicated

MankyVegSoup

I've been registered self employed since 2002 and have run various businesses. Always as a sole trader and was pretty on the the ball with tax etc. However things have now got complicated.

When covid hit, my clients all shut down (most in wedding industry). I claimed the first 3 SEISS payments but eventually I decided to "retire" as I was not far off my 60th birthday when I planned to retired anyway.

I remain registered as self employed and have a small side "business" which due to covid and injury has generated less than £1,000 revenue last tax year.

I've now passed 60 and will receive a small LGPS pension plus will start drawing down from a personal pension pot. Total pension income around £10,500 before tax. I also have a buy to let property bringing in around £2,500 profit a year.

Unexpectedly one of my old clients has come back to me and asked me to help out again. The injury means my retirement travelling plans are on hold so I've agreed. However, for various reasons (no insurance or business bank account, IR35), I have been added to the payroll rather than being self-employed. I'm only working a few hours a week and expect to earn around £6,000 this tax year (but could be more).

This is where tax and NI get complicated. I still need a few more year's NI contributions for full state pension. None of my income streams are large enough to be taxed individually but I will be over the personal tax allowance. And will I still be able to make class 2 NI contributions? I'm not expecting the side business to bring in much this year either.

Any advice? 

Dazed_and_C0nfused

You may accrue some weekly credits via your new employment and providing you are registered as self employed with HMRC and complete a Self Assessment return there should be no reason why you couldn't pay voluntary Class 2 NI (as part of your Self Assessment liability,).

You can also expect new tax codes at some point after you start the job and pensions so you will be paying some tax during the year.

A lot probably depends on what order HMRC are notified of the PAYE sources but it could be something like

LGPS 700L
New job 557T
Personal pension BR (basic rate)

But once everything is up and running you can generally sort the tax codes to what suits you best.  Although having LGPS as your main code is likely to be sensible as that will presumably be forever and a relatively stable amount.

MankyVegSoup

Thanks. That makes sense.

It's probably only this tax year that will be so complex. Hoping I can embrace proper retirement next year!