Self-employed + employee?

lukasz001 · Mar 29, 2010

I am a full time employee. On 5th March I worked as a self-employed for a different company.
1. When should I complete the tax return and pay the income tax?
2. If I am paid after 5th April, will this mean that I had no income in the year 2009/2010? What is the decisive factor? Is it the date on the invoice?
3. Do I have to pay NI Class 4?
3. I am going to use my personal bank account for business purposes. Can this be questioned in any way by HMRC?

Thanks for your help
Lukas

Logistika · Mar 29, 2010

you need to ask yourself if this income will be repetitive, or a one off.

If a one off, shut your mouth, and forget it. (officially yes it should be disclosed as other income in an income tax return), but you will get no thanks for being honest.

Class Iv Nic is only payable if there is a badge if trade, which in your case is unproven if its a one off. If it is repetitive you can ask HMRC to exempt you Class IV provided earnings are going to be less than around 6 grand.

Re personal account, if a one off, its irrelevant, but if recurring in nature, yes, you would need a business account to claim fees and overdraft intewrest, but under self assessment, if you claim small amounts HMRC will not look at it.

Bottom line in your circumstances are whether or not you FEEL self employed on a recurring basis. If the answer is YES, go see an accountant

businessowner350 · Mar 30, 2010

I am a full time employee. On 5th March I worked as a self-employed for a different company.
1. When should I complete the tax return and pay the income tax?

The tax year end is in a few days (5th April), that is when you should do it (You have until January).

2. If I am paid after 5th April, will this mean that I had no income in the year 2009/2010? What is the decisive factor? Is it the date on the invoice?

I am assuming you are talking about your self employment. IMO, It all depends what date is on the invoice, but that's a good question for the accountants here.

3. Do I have to pay NI Class 4?

Depends how much you earn between 6th April 2009 and 5th April 2010. Figure for 2009/2010 is £5, 715

3. I am going to use my personal bank account for business purposes. Can this be questioned in any way by HMRC?

HMRC won't care if you store your money on the moon, as long as you declare it. Now, your bank may not be happy you doing this. I'm with Abbey/Santander - free business banking for life; I love them

My advice, is that if you feel that self-employment is enjoyable, and you'd like to do it again in the future, start off on the right foot, and register for self employment (You need to do this ASAP btw, as you can get fined for not registering in a timely manner) and fill out your tax return. I started (on my own) when I was 17, and if I can do it, it must be easy

HTH

lukasz001 · Mar 30, 2010

So, bringing it all together:
1. I have to file a tax return till the end of Jan 2011 for the year 2009/2010
2. I don't have to pay Class 4 NI for the year 2009/2010 because my revenue was less than £5,715. However, I have to start paying Class 4 for the year 2010/11 because my estimated revenue would exceed this figure
3. I have to open a separate bank account if my bank advises me to do so
4. I have to register for self-employment within 90 days of 5th March

I don't want to hire an accountant because I assume I am smart enough to do this stuff myself

businessowner350 · Mar 30, 2010

Sounds about right to me

That's how I started off

Jenni384 · Mar 30, 2010

lukasz001 said:
So, bringing it all together:
1. I have to file a tax return till the end of Jan 2011 for the year 2009/2010
2. I don't have to pay Class 4 NI for the year 2009/2010 because my revenue was less than £5,715. However, I have to start paying Class 4 for the year 2010/11 because my estimated revenue would exceed this figure
3. I have to open a separate bank account if my bank advises me to do so
4. I have to register for self-employment within 90 days of 5th March

1. Yes.
2. Yes to the first bit. No to the second. Class 4 is calculated on profits over 5715. Class 2 is the £2.40 a week that all self employed persons have to pay unless your profit is under 5075 - then you can apply for a small earnings exception. It's not based on revenue (turnover).
3. Yes and no. Yes if you want to bank with them. There's nothing stopping you opening a personal current account with a different bank. It's good practice to separate business and personal finances as far as possible. With free business bank accounts like Santander, there's no real need to operate a personal account as a business account these days.
4. Yes.

I don't want to hire an accountant because I assume I am smart enough to do this stuff myself

It's not a question of being smart enough.

It is possible to do self assessment yourself. If things are very simple then there's a high likelihood you will get it right and not overpay tax.

Things can get complicated quite easily and the saying goes, your accountant should save you more money in tax than s/he charges in fees. If it takes us years to qualify, do you really want to spend lots of time learning the same skills when you could be running your business or having leisure time?

At the very least most accountants offer a free first meeting so you can get some valuable info and potentially find someone you really feel you can work with. Check out the "How to find a good accountant" thread, stickied at the top of this forum.

Good luck with your self employment.
Jenni

lukasz001 · Mar 30, 2010

I have a personal bank account with HSBC. I've checked that they offer a business account for free, i.e. without the maintenance fee. I really need just a basic service (account, debit card and free UK transfers). I think it has all of it. Is it a good choice?

lukasz001 · Mar 30, 2010

Oh, and one more thing. To calculate the income tax I will have to add the income from employment and self-employment. However, to calculate the NI Class 4 I will have to take only self-employment income into account. Is that right?

Jenni384 · Mar 30, 2010

If the bank account does what you want it to for the right price, then its likely fine. Run a search on business bank accounts, there have been plenty of discussions on here about them.

Income tax, yes, will be calculated on total pay from employment + self employed profit.

Yes, national Insurance is always dealt with separately:
Class 1 - employment
Class 2 - weekly self employment
Class 3 - voluntary (for those who can't pay classes 1,2 or 4)
Class 4 - profit based self employment

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Self-employed + employee?

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