Tax and NI on 2 Jobs

Yuzo

My current setup is simple enough. I get paid £25,000 though a company, everything is worked out for me.

I am going to be changing my hours to part time in the company and doing self employed work on the side, how will tax and NI be worked out?

Here is an estimate of my salaries:

Job 1 (PAYE) - £6,760
Job 2 (Self Employed) - £20,000 (£16,000 after expenses).

So using my full tax free personal allowance on Job 2 makes sense. Then do i pay the full 20% tax on the remainder of the 2 salaries combined at the end of this tax year?

How will I pay NI on both these salaries?

How and when should I transition my tax free amount from Job 1 to Job 2?

Thanks for your help 

Dazed_and_C0nfused

It's not a job.

You will fill in a Self Assessment return.

Yuzo

Dazed_and_C0nfused said:

It's not a job.

You will fill in a Self Assessment return.

Yes i know. I am just wondering how my Tax and NI will be split across both earnings.

Jeremy535897

You will pay class 2 and class 4 NIC on your self employed profits. Class 2 is £3.15 a week, but paid annually through self assessment. Class 4 is 9% above £11,909 (it reduces at profits over £50,270). Your "salary" you take from your self employment is irrelevant.

Yuzo

So the new NI threshold that has come in (£12,570) I will only pay NI on anything over that figure on my highest self employed earnings.

And I wont pay any NI on my salaried job (Job 1) because its under that threshold?

Thanks.

Dazed_and_C0nfused

Yuzo said:

So the new NI threshold that has come in (£12,570) I will only pay NI on anything over that figure on my highest self employed earnings.

And I wont pay any NI on my salaried job (Job 1) because its under that threshold?

Thanks.

That's the amount from July for employees.

It's slightly less for Class 4 NI.

https://www.litrg.org.uk/tax-guides/self-employment/what-national-insurance-do-i-pay-if-i-am-self-employed#toc-so-how-much-class-4-nic-do-i-pay-

Jeremy535897

Dazed_and_C0nfused said:

Yuzo said:

So the new NI threshold that has come in (£12,570) I will only pay NI on anything over that figure on my highest self employed earnings.

And I wont pay any NI on my salaried job (Job 1) because its under that threshold?

Thanks.

That's the amount from July for employees.

It's slightly less for Class 4 NI.

https://www.litrg.org.uk/tax-guides/self-employment/what-national-insurance-do-i-pay-if-i-am-self-employed#toc-so-how-much-class-4-nic-do-i-pay-

£11,909, as I said.

Yuzo

Dazed_and_C0nfused said:

Yuzo said:

So the new NI threshold that has come in (£12,570) I will only pay NI on anything over that figure on my highest self employed earnings.

And I wont pay any NI on my salaried job (Job 1) because its under that threshold?

Thanks.

That's the amount from July for employees.

It's slightly less for Class 4 NI.

https://www.litrg.org.uk/tax-guides/self-employment/what-national-insurance-do-i-pay-if-i-am-self-employed#toc-so-how-much-class-4-nic-do-i-pay-

Thank you that link is very helpful. All makes sense now.

So I have 2 sets of thresholds for NI:

Class 2 & 4 on my self employed (anything over £11,908)
Class 1 on my salaried Job (anything over £12,570)

Tax:

20% on anything over £12,570 for both jobs combined.

Is this correct?

Dazed_and_C0nfused

molerat said:

Class 2 is on profits over £6725 at £3.15 pw then class 4 on profits over £11908 at 10.25%

But I don't think Class 2 needs to be paid when profits are in the range £6725 - £11908,

https://www.google.com/url?sa=t&source=web&rct=j&url=https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1063315/Personal_Tax_factsheet_FINAL.pdf&ved=2ahUKEwjZ3K6YtP34AhVOY8AKHYMWDjkQFnoECDUQAQ&usg=AOvVaw0IsdIBAB6tnsCGswroc_2T

molerat

Oops, yes, new for 22-23.  In my defence your honour I did consult the .gov page before posting https://www.gov.uk/self-employed-national-insurance-rates

With any luck this will see the phasing out of class 2 - increase class 4 to class 1 rates and make a single voluntary rate at class 3.

Dazed_and_C0nfused

The late change has certainly made things more complicated this year!