2nd Income as a Consultant

andy768

Hi,
I have been recently offered the chance to do some consultancy work for a company which I would then invoice them for payment. I've no experience of this as I've always had PAYE wages. The total income for this work would be approx £2000 a year. Would it be possible to guide me in what I should do next, I really don't like the idea of setting up a small compnay etc, surely it is possible to receive the payments and declare them at the end of the year? If so, is there any special software people use to keep track of everything?
Many thanks.

fengirl_2

No need to run this under a company, you can just register as a sole trader. You need to inform HMRC within 3 months of starting that you are becoming slef employed, but you will claim small earnings exemption from Class 2 NIC - the class 1 which you pay in your normal job comes above everything else.
You will complete as elf assessment at the end of each year and pay the tax in two installments on 31 Jan and 31 July - HMRC will guide you.
I wouldnt bother with special software for an income of £2k a year. Just keep spreadsheets listing the income and expenditure and make sure you keep reciepts to back up all your expenditure.

Elaine_Wilson

fengirl wrote: »

You will complete as elf assessment at the end of each year.

Just like the Gnomes of Zurich?

But seriously, I agree with everything Fengirl has written.

Bibbleq

Hi,
I'm in a similar position doing some work for an American company for $800 (initially might lead to more work). If you register as self-employed with HMRC would that effect my main job which is PAYE? or can you register as self-employed for the second job without it upsetting the first one in anyway? In the past i have contracted under an umbrella company who dealt with my tax issues, would this be an easy way to manage the second consulting job?

Thanks

fengirl_2

No registering as self employed does not affect your main job and HMRC would never divulge other sources of your income to your employer. Am not in favour of umbrella companies as I think you can manage this small amount of extra incoem yourself for free.

LisaContractorUmbrella

I agree with Fengirl, unless you are going to be working as a contractor full time an umbrella company really is unnecessary

spanishfly15

untaxed income under £2500 per year can be included as a deduction in your paye tax code number. any tax due would be collected by more tax being deducted from your wages at source. you then declare the actual amount of untaxed income you received each year on form p810 once the tax year has closed. if your income exceeds £2500 then you will need to register as self employed within 3 months of the income commencing. your local tax office can advise you further.