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Employed & Self Employed

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 Fozzy 31 Jul 2020

I’ve got the opportunity to take on some extra work alongside my normal job (not a lot, maybe an extra £1000 a year). I’m guessing I’d have to be registered as self employed whilst also being employed for this? 
Has anybody got any experience of this & how complicated it is in practice? I’m bloody awful with maths, and what I’ve tried to read about allowances and dates to submit assessments etc. has confused the hell out of me. 

Post edited at 20:54
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 Irk the Purist 31 Jul 2020
In reply to Fozzy:

I used to tutor alongside my full time job. I did self assessment for a year or two and then discovered you can just ring HMRC and they can adjust your tax code for small amounts.

Just keep a good record of your earnings and expenses.

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 La benya 31 Jul 2020
In reply to Fozzy:

If its a cash gig don't bother. If you're itching to pay your £200 tax then you can do a self assessment at the end of the year. 

If its PAYE you'll need to nominate your primary job/ stop them from allocating any of your tax free allowance to the new job as the HRMC has a habit of stupidly adjusting the tax code when something changes and messing it up across the board. Especially annoying if your second gig is sporadic and you earn £1000 on mnth and then nothing for most of the other months as they assume from the larger month you will be earning £12k annually. 

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 Fozzy 31 Jul 2020
In reply to La benya:

> If its a cash gig don't bother. If you're itching to pay your £200 tax then you can do a self assessment at the end of the year. 

Unfortunately it’ll be payment via cheque & all through the farm’s books, so keeping quiet would be a bit of a risk. 
 

And Irk, thanks, I’ll look into that. Cheers. 

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In reply to Fozzy:

Once you get to a human, HMRC are very helpful about this sport of thing on the phone.

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In reply to MG:

> Once you get to a human, HMRC are very helpful about this sport of thing on the phone.

Not in my experience. I rang the HMRC advice line because my company was working for a civil engineering company on a construction site and there was something about withholding 20% of the money unless I was registered with some scheme. The website was as clear as mud so I rang the advice line. The lady on the phone refused to give any advice, do you want to sign up or not? I don't know I need advice, that's not my job, I just sign you up or not, err this is the advice line, I don't give advice I just sign you up or I don't. Who do I speak to about advice, it's all on the website read it there, I did and I don't understand it, it says if you don't understand it to ring this number to get further advice, I don't give advice, do you want to sign up or not. 

I gave up and left it to my accountant to sort out. 

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 DancingOnRock 01 Aug 2020
In reply to Fozzy:

Assuming the farm is doing everything above board you fill in a Starters Checklist. Ask them for one. Think you tick box C and you then get a different type of tax code for the farm job.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/873648/Starter_checklist_English.pdf
 

If it’s cash type of job and the farm aren’t sorting your extra tax and NI but paying you as a contractor. Then you need to register for self assessment as not-self employed. At the end of the year you put in values online from your P60 from your main job, and any cash you’ve been given for your second job. If you owe tax at a reasonably low amount you can pay it back thorough next years tax code. Or just pay them the cash you owe immediately.
 

https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-not-self-employed

But talk to the Farm first, they probably do it a lot with seasonal workers.

Post edited at 14:41
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 SouthernSteve 01 Aug 2020
In reply to Fozzy:

If you can, do this as an employee. Avoid the tax return that will undoubtedly be requested for some years even if you change your mind about doing such work in future years. If you see this as a growing part of your income then it might be different. Things are changing moving forward so that many people considered contractors will need to be employed from April 2021

https://www.gov.uk/government/publications/off-payroll-working-rules-communication-resources/know-the-facts-for-contractors-off-payroll-working-rules-ir35

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 Alyson30 01 Aug 2020
In reply to Fozzy:

In my case this has caused HMRC to actually tax me on two separate accounts, which meant they thought I had paid too much tax.

As a result one day I received a 15k cheque from HMRC...  completely wrong of course.

So my advice would be to make sure they don’t create duplicate accounts otherwise you end up in a bit of an administrative mess.

Post edited at 17:40
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 Becky E 01 Aug 2020
In reply to Fozzy:

I've done something similar to this for about 15 years. If your self-employed income is low, filling in the tax return is actually quite simple (the hard part is getting registered to do it online: start that process EARLY!).  If your self-employed turn over is less than a few thousand, you don't have to fill in all the numbers: just state your income, profit and costs.

The online tax return does all the maths for you, so you just have to fill in the numbers.

if you expect the following year's self-employed income to be significantly less than this year's, then choose the option to NOT have the tax included in your tax code.

Theres also an exemption available from National Insurance contributions if your self-employed income is less than a few thousand - make sure you get that.  I can never remember which NICs it is though!

Hope that helps!

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 marsbar 01 Aug 2020
In reply to Dax H:

I think the humans for individuals are more helpful than the humans for companies.  

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 Fozzy 01 Aug 2020
In reply to DancingOnRock:

> If it’s cash type of job and the farm aren’t sorting your extra tax and NI but paying you as a contractor. Then you need to register for self assessment as not-self employed. At the end of the year you put in values online from your P60 from your main job, and any cash you’ve been given for your second job. If you owe tax at a reasonably low amount you can pay it back thorough next years tax code. Or just pay them the cash you owe immediately.

That’s the set-up; I’ll do bits around the farm, billing them at an hourly rate, with a cheque handed to me at the end of the week & the onus on me to sort out my own tax etc. 
When you say ‘at the end of the year’, would that be everything I earned between April 2019 -April 2020 (hypothetically at the mo), but submitted online in October 2020? 

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 Becky E 01 Aug 2020
In reply to Fozzy:

> When you say ‘at the end of the year’, would that be everything I earned between April 2019 -April 2020 (hypothetically at the mo), but submitted online in October 2020? 

Yes.

You actually have until 31st January 2021 to fill in your tax return for the April 2019-April 2020 tax year.

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 RedFive 01 Aug 2020
In reply to Fozzy:

There is a trading allowance available to everyone where earnings of up to £1000 per tax year do not have to be declared and thus are not taxed. 

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income#trade

Was brought in to specifically help gig or side hustle workers in positions like yours. 
 

no need to register or speak to anyone but keep records of what you earn. 
 

Tax year is 6th April to 5th April. 

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 steve taylor 02 Aug 2020
In reply to Fozzy:

When I was in this situation, I just completed a self assessment every year.

I declared my PAYE earnings and tax paid on that. Declared any taxable benefits (health care) and also filled out the self-employed section. That section allows to you to declare anything extra you have earned outside PAYE, plus any expenses incurred as a result of the extra earnings (travel, accommodation, capital expenditure etc). Quite easy once you have done it for one year. 

As someone earlier said, keep good records (I had an annual spreadsheet for this purpose).

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 Fozzy 02 Aug 2020
In reply to RedFive:

Is that still applicable if I’ve got a salary from a full time job? If so, I’ll be going down that route & making sure it’s less than £1,000 a year. Cheers. 

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 Danbow73 02 Aug 2020
In reply to Fozzy:

Yes I registered as self employed but as I learnt less that £1000 a year from my self employed work I was advised I didnt need to do the self assessment.

I also have a full time job so exactly the same situation as yours

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 RedFive 02 Aug 2020
In reply to Fozzy:

No problem and yes employed (PAYE) earnings + < £1k self employed income is exactly what it is aimed at.

No need to register for self assessment.

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 DancingOnRock 02 Aug 2020
In reply to RedFive:

As a semi-pro musician earning £50-£80 tops a gig, by the time fuel, practice rooms and equipment is paid out I technically make a loss. Certainly not as much as £1k. 
 

Many of my friends have tried to run that model as a business but the IR aren’t interested and you have to run a business with ‘objective of turning a profit’ or some such wording, otherwise they start wondering if you’re running it at loss for questionable reasons. 
 

When you look at how much tax you’re paying and how much effort it takes to process that payment it makes it uneconomical all round to be filling in forms and chasing up people. 
 

I keep simple records of how much and when I get paid and when we practice. 

Post edited at 18:24
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 Becky E 02 Aug 2020
In reply to RedFive:

> There is a trading allowance available to everyone where earnings of up to £1000 per tax year do not have to be declared and thus are not taxed. 

Thanks for posting that link: I'll take a look. It may mean I don't need to fill in a tax return any more. 

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In reply to DancingOnRock:

>  Many of my friends have tried to run that model as a business but the IR aren’t interested and you have to run a business with ‘objective of turning a profit’ or some such wording, otherwise they start wondering if you’re running it at loss for questionable reasons. 

^this.  When I fished commercially from my boat at weekends I was advised to record everything but don't bother declaring it as the tax authorities weren't generally bothered about small volume business. Had I been investigated I would have been able to prove whatever was necessary.

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 e.ms355 14:48 Tue
In reply to Fozzy:

You can earn up to £1000 undeclared so if you don't think you'll be over this, no point registering you're self employed until you go over that. HMRC confirmed it to me when i tried to file taxes for the first few months of being self employed but hadn't actually earned that much so was told i didn't need to even be registered at that point.

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