Full Time Job + Extra Income

Soldato
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I work 40 hours a week full time, PAYE etc.

However I'm also starting to get some freelance work which I complete in my evenings (web stuff).

How do I declare these earnings and what tax will I be paying? ie is it added to my full time salary or is there a special "it's a second job so pay 40%" policy? I've heard conflicting things.

Anyone care to shed some light on this? Can't find what I'm after on Google.
 
I looked into this a little, and basically you'll likely walk away with half of what you get paid due to tax/nat insurance etc. I am in exactly the same position and it sucks. On the plus side you may be able to claim some back at the end of the year.

You can also set yourself up as a director and get paid dividends I believe, or use an umbrella company.
 
It depends on your total earnings.

If your combined earnings (full time + freelance) is under the higher rate tax bracket then its probably better to set your self up as a sole trader or ltd company.

Both have their pros and cons but a ltd company is a lot more difficult to keep right, I currently pay an accountant to sort mine but my situation is different to yours.

KaHn
 
I used to be self employed, so I get the ins and outs of ltd company, what I can claim back etc. The thing is I don't know how it relates when I am employed, as I don't think you can be employed full-time and registered as self employed (though I could be wrong!)
 
If you are self employed, you must inform the taxman within three months of starting work this way, and then submit tax returns at he end of each jan.
If you are liable to pay tax then you must.
It wont be at fourty percent, unless your paye status already puts you into that bracket.
You need to invetsigate ni contributions also, as type b and d might apply, one is direct debit monthy, the other is incorportaed into your self assessment.
Within the self asessment hey will expect you to include your p60 end of year details also, so hey incorporate your paye status as part of your tax return.

Just how much of this work are you going to be doing?
Just how much will the amount increase?
 
I used to be self employed, so I get the ins and outs of ltd company, what I can claim back etc. The thing is I don't know how it relates when I am employed, as I don't think you can be employed full-time and registered as self employed (though I could be wrong!)

You can as a sole trader, would be interesting as a limited company, as in that case you would be an employee of your own company which might prove interesting when you start trying to dodge the tax while also being fully employed as an employee elsewhere.
 
Just how much of this work are you going to be doing?
Just how much will the amount increase?

I earn £32k at the mo. When and if the jobs come in I could earn another £400 a week in theory, though in likelihood this won't be the case. Basically I have a job offer at the moment (freelance) just don't want to bugger about too much as I've just gone full time (as of Nov) having been self employed for 3 years prior.
 
Just phone your local tax office and speak to them. They will most likely put you on self assessment and you can then say you earned A from your employment and paid B in PAYE tax, and you earned X from your self-employment and they will calculate how much you owe. As has been stated above, whether this puts you in the 40% category depends on how much you've earned.
 
I looked into this a little, and basically you'll likely walk away with half of what you get paid due to tax/nat insurance etc. I am in exactly the same position and it sucks. On the plus side you may be able to claim some back at the end of the year.

You can also set yourself up as a director and get paid dividends I believe, or use an umbrella company.

not anymore theres laws about all that it's a dodgy area these days.
 
Just phone your local tax office and speak to them. They will most likely put you on self assessment and you can then say you earned A from your employment and paid B in PAYE tax, and you earned X from your self-employment and they will calculate how much you owe. As has been stated above, whether this puts you in the 40% category depends on how much you've earned.

This is what I thought, I wonder if I'd still be able to claim expenses as a result (working from home, domain name costs etc)?
 
I can't see any reason why HMRC would care if you set yourself up as your own company. Your other employers on the other hand could have an issue with it.
 
I can't see any reason why HMRC would care if you set yourself up as your own company. Your other employers on the other hand could have an issue with it.

Indeed, your current employer probably has strict laws about working outside of your full time employment with them, especially if the work is somewhat related you will run into all sorts of IP issues etc.
 
not anymore theres laws about all that it's a dodgy area these days.

well there are rules about disguised employment and Ltd companies (IR35) - given the OP will be providing services probably from his home to multiple clients he shouldnt fall into that. So I would say Ltd could be an option if the overheads of maintaining a Ltd company if something worth while

Otherwise - Self Assessment is the answer

Fill in the form at the end of the year then in the extra income part add in the extra money and the tax will be calculated on the extra portion. Given you earn £32k the next threshold is over £40k so you should remain in the same tax band as you are now. Plenty of calculators on the net if you want to check how much you will be liable for
 
Indeed, your current employer probably has strict laws about working outside of your full time employment with them, especially if the work is somewhat related you will run into all sorts of IP issues etc.

I've not signed anything... yet... I really should remind them to get that contract to me. It's in my best interests too. Off to write an email!

Thanks for all the help guys!
 
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