jibspark

Hi,

As you may have read from some of my other posts, im thinking of doing some private work now im qualified.

Im 26 years old and i work full time, it seems a waste not to use my qualifications for some extra income, the only thing putting me of doing some private work at weekends is that i dont know how to do it legally.

i understand that alot of you may be thinking "dont be so soft and just do it for cash" but im really worried about shooting myself in the foot.

Could some one tell me a bit more about being employed and self employed at the same time? What do i need to do, how much money will i lose? will it end up costing me money if i dont earn over a particular amount in my private work, etc etc.

Any help on this would be great!!!!


Thankyou

Neil

EasyFox

Well first thing todo is make sure your employer has no problem with you setting up as SE for weekend work.
Then think of a company name, trot down to the tax office get the forms & register your company, you only get 3 months to do this from date of your first invoice to a customer after that you'll start racking up fines.
Decide when you are going to run your financial year from (mines 4th April), keep a accounts book of outgoing & incomming payments, keep all receipts & invoice copies.
At end of my financial year I tot up the columbs in the accounts book deduct outgoings from incommings ( hope a profit has been made ) put totals into the online self assessment form submit it, Get a reply showing how much tax is due thats it job done. You then get notification in the post of how much & when by you need to pay.

The end of year tax you have to pay as SE can (if it's not a huge ammount) be paid by having your fulltime employment tax code changed. You request this when you do the self assessment form (I do mine on line) & the tax office then notify your fulltime employer of this code change & you see it on your next payslip.

Some useful links:
http://www.hmrc.gov.uk/leaflets/se1.pdf

HM Revenue & Customs:Self Assessment

Starting up | Business Link

Well first thing todo is make sure your employer has no problem with you setting up as SE for weekend work.
Then think of a company name, trot down to the tax office get the forms & register your company, you only get 3 months to do this from date of your first invoice to a customer after that you'll start racking up fines.
Decide when you are going to run your financial year from (mines 4th April), keep a accounts book of outgoing & incomming payments, keep all receipts & invoice copies.
At end of my financial year I tot up the columbs in the accounts book deduct outgoings from incommings ( hope a profit has been made ) put totals into the online self assessment form submit it, Get a reply showing how much tax is due thats it job done. You then get notification in the post of how much & when by you need to pay.

The end of year tax you have to pay as SE can (if it's not a huge ammount) be paid by having your fulltime employment tax code changed. You request this when you do the self assessment form (I do mine on line) & the tax office then notify your fulltime employer of this code change & you see it on your next payslip.

Some useful links:
http://www.hmrc.gov.uk/leaflets/se1.pdf

HM Revenue & Customs:Self Assessment

Starting up | Business Link

jibspark

thanks again easyfox, so i cant be se without having a company name?
that all sounds rather easy. would you reccomend having a business account too?
is there a particular percentage of tax i should expect to pay on the profit i earn?
when you say about have your main tax code changed, do they take the tax in one lump sum or spread it out over the year?

sorry for all the questions!

thank you!

Neil

Girlyspark

You don’t have to register as a company - in fact, if you do you will have to file accounts, minutes etc with Companies House. You can just be plain ‘Neil Bloggs’ and a ‘sole trader’.

Easy Fox’s advice is good and the Inland Revenue website is very helpful. Filing your return online is easy.

Make sure you keep your pay slips and P60 from your employment, as you will have to put this detail on your return.

Tax paid at same rate as your employed tax. Ie basic rate of 20%.