Freelancer new to tax, where do I start?

Phirefly · 16 January 2008 at 12:59PM

I'm currently working full-time for an employer with an annual salary of £26000.

I undertake freelance work for another company who pay me via an agency on the agencies payroll, and they make the deductions. I earn up to £400 a week from this employment, but on average its about £260 a week before deductions.

My combined annual salary from these two employers is around £39k (but I've not yet completed a year so this is extrapolated)

I've just won another freelance contract which will pay at a very similar rate to my other freelance employer. In this instance though, I will be invoicing them and they will be paying me directly, so I will have to deal with tax and NI implications of this income, and I'm confused as to what this entails.

I hope someone can explain what I need to do, thanks.

Phirefly · 17 January 2008 at 12:12PM

anyone??!!

fengirl_2 · 17 January 2008 at 12:42PM

You will be treated as self employed at this 3rd job. You need to register with HMRC within 3 months of starting and the necessary form is at www.hmrc.gov.uk. You will pay class 3 NIC by DD (I thinki ts about £2.10 a month now).
You need to keep records of all the income from this source as well as all your expenses. After 5 April HMRC will issue a self assessment return on which you show your two jobs and the income and expenditure from the self employed job. If you need help with any of these forms, your local tax office will guide you, but you do need to have proper records of your income and expenditure ans they can't make up figures for you.
If you submit the return by 30 Sept, HMRC will calculate the tax for you and it is payable on 31 Jan and 31 July every year - more indepth info from HMRC - its far too long to repeat everything here!