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  • FIRST POST
    • aj9648
    • By aj9648 8th Aug 18, 8:14 AM
    • 1,205Posts
    • 109Thanks
    aj9648
    Declaring additional income
    • #1
    • 8th Aug 18, 8:14 AM
    Declaring additional income 8th Aug 18 at 8:14 AM
    Hi

    I have a full time job earning about 60k per annum. Over the last few years I have been helping a few parents with tuition for their kids at the weekend....initially it was only a few kids and I did not think much of it.

    This year word has got around and have a lot of people through the door....which is great as I want to get back to teaching at some point in my life. The income is going to be around 10K-15K this year - it is mostly paid in cash when parents come to pick their kids up.


    I understand I have to pay tax on this, but how do I go about doing this? Do I need to do a SA or can I just call the HMRC and tell them? (Hopefully the latter)..
Page 1
    • BakingC
    • By BakingC 8th Aug 18, 8:39 AM
    • 42 Posts
    • 20 Thanks
    BakingC
    • #2
    • 8th Aug 18, 8:39 AM
    • #2
    • 8th Aug 18, 8:39 AM
    Notify HMRC of your self employed status, and each year you will have to do a SA tax return.

    Remember you can deduct expenses you have spent to come to your "profit" which is what you will pay tax / NI on e.g. Paper/Pens, Petrol if you go to students houses.

    It isn't only tax you will also be responsible for Class 2 / 4 NI.

    You can always increase your pension contributions aswell to decrease the amount of tax you will pay as you will be in the higher earners bracket.
    • ozaz
    • By ozaz 8th Aug 18, 5:52 PM
    • 179 Posts
    • 61 Thanks
    ozaz
    • #3
    • 8th Aug 18, 5:52 PM
    • #3
    • 8th Aug 18, 5:52 PM
    @aj9648 - I hope you don't mind me jumping on your thread, but I am in a very similar situation (although with much lower additional income to declare) and you may have a similar questions to me.

    @BakingC - I think I understand how to calculate my additional income tax liability. But I am confused by National Insurance. My full time employment leads to class 1 National Insurance taken care of via PAYE. My additional income is less than the Class 2 NI Threshold.
    https://www.gov.uk/self-employed-national-insurance-rates

    Does that mean I don't need to make an additional NI contribution beyond what I have contributed through PAYE or do I somehow need to combine the PAYE and additional portions of my income to calculate a new overall NI liability?
    Last edited by ozaz; 08-08-2018 at 5:54 PM.
    • 00ec25
    • By 00ec25 8th Aug 18, 6:44 PM
    • 7,073 Posts
    • 6,775 Thanks
    00ec25
    • #4
    • 8th Aug 18, 6:44 PM
    • #4
    • 8th Aug 18, 6:44 PM
    https://www.gov.uk/self-employed-national-insurance-rates

    Does that mean I don't need to make an additional NI contribution beyond what I have contributed through PAYE or do I somehow need to combine the PAYE and additional portions of my income to calculate a new overall NI liability?
    Originally posted by ozaz
    NI is assessed in isolation.

    so if your self employed profits are below the NI threshold you will not have to pay NI that additional income

    The calculation is part of your tax return. Only if you are above the respective thresholds will class 2 and class 4 NI be charged. If below it won't.
    Although there is an option to pay class 2 on a voluntary basis, in your case that is pointless if you already have your NI credits via your PAYE job, having paid NI on that income in isolation.
    • 00ec25
    • By 00ec25 8th Aug 18, 6:49 PM
    • 7,073 Posts
    • 6,775 Thanks
    00ec25
    • #5
    • 8th Aug 18, 6:49 PM
    • #5
    • 8th Aug 18, 6:49 PM
    Do I need to do a SA or can I just call the HMRC and tell them? (Hopefully the latter)..
    Originally posted by aj9648
    you hope wrong

    as an already higher rate taxpayer you must register for SA and declare your additional income on your tax return.

    Remember the tax return covers all forms of income, not just the self employment, so, as a higher rate taxpayer you may well find that you now face a tax bill on stuff you had not appreciated in the past was taxable. So unless you literally have 0 other income because all the interest on your savings is within an ISA for example, you will find you owe tax on things besides the self employment. Dividends from shares you hold for example.
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