full time job and freelance (home based) tax etc..

[level200]

Hi Guys

I was working full time as a freelance webdesigner when 2 years ago i got a full time job but still do the odd job for my clients part time from home. can anyone give me advice on NI as in because I pay through my full time job do I need to pay anything for the freelance part time business stuff.

Also I only earn less than £5000 pa through the part time freelance stuff, how do I handle tax. I have kept all my incomings and outgoings from the freelance stuff but have neglected to fill in and send out the self assessment forms as I have been too busy with the full time job.
I know this is very wrong and some of you will tell me off for not doing the forms straight away. I am now thinking of contacting an accountant to put the forms etc.. in order but becuse of the small ammount coming in from the freelance stuff, is it worth it and how much would they charge?

many thanks for any help.

 

[bwglaw]

Whilst I am not an accountant here are my comments. I think you need to register as self-employed as well as being employed and pay Class 4 NIC

The HMRC will then send you self-assessment forms for completing each year. Even if you are earning less than £4800 you will still need to declare the income and let HMRC confirm your tax liability each year.

It may be also worth checking your contract of employment that your employer allows you to do additional work outside your full-time employment because the 48-hour/week rule may/may not come into play

 

[level200]

Thanks for the reply.

I have registered as being self employed hence recieving the self assessment forms. I was paying national insurance through the business but stopped when I started the full time job as I was paying through that.

My employer is fine with me working freelance as I lecture in a college and the freelance business helps with industrial links within the college.

cheers

 

[bwglaw]

Thanks for the reply.

I have registered as being self employed hence recieving the self assessment forms. I was paying national insurance through the business but stopped when I started the full time job as I was paying through that.

My employer is fine with me working freelance as I lecture in a college and the freelance business helps with industrial links within the college.

cheers

"through the business"

You are a sole-trader I suspect so I think you still need to continue paying a small amount to NIC and I think it is about £10/month.

An accountant on here may be able to confirm whether you still need to pay NIC whilst in full-time employment and self-employed.

Jonathan

 

[KM-Tiger]

.... I am now thinking of contacting an accountant to put the forms etc.. in order but becuse of the small ammount coming in from the freelance stuff, is it worth it..........

It will be worth it. The freelance income will be taxed at your marginal rate, so the name of the game is to offset as much and as many expenses against this income as you can.

A good accountant should be able to save you more than their fee, by knowing how to deal with those expenses.

 

[Jean@wincom]

As you have registered as self employed you should be "invited" to pay Class 2 NICs (yes, about £10 a month) by direct debit. Or you can opt out of this if your income is small. Give your tax office a call - they can be quite helpful these days, especially if you'll be paying something in.

I've done this in the past and it seemed very unfair to have to pay 3 lots of NI!

But Class 4 NICs only kick in after you've earned enough income in a year and have to be paid with any tax due by the end of the following January.

 

[level200]

Thanks for the replys, they where all very useful.

I'am now in the process of getting my last few years incomings and outgoings in order and would like some suggestion of a good cheapish accountant that I could use.

 

[gj]

If you are only making £5k before deductions with a few deductions you may well be below the NI threshold anyway. There is no class 2 NI (the £10 per month referred to by others - £2.10 per week) if profits are under £4,465 pa. (2006/7)

You need to apply to defer making the monthly payment, then the Revenue will check against profits when your self assessment tax return goes in and charge you the full year if your profits exceed the limit.

Nor is there any Class 4 NI if your profits are less than £5,035 (2006/7).

My guess is that yours is a fairly simple business anyway.

Business Link could give you a reasonable indication of what you can claim as expenses of the business and the tax office would help you complete the tax return. Otherwise, see an accountant and be prepared to pay a fair fee - the fee is not lower just because you don't make much from the business - but you may find someone prepared to do it almost as a tax return only case, if you have pretty much put together your own profit and loss account.

If the business grows - think about talking to an accountant as a limited company may start to make sense quite quickly for a business run alongside a full time employment

Graham

 

[Theresa Mullins]

Hi Level2000

You must register your part time work as self employed and as you no doubt earn over the tax free threshold in your permanent job, therefore the whole of your part time earnings will be liable for tax! You will see on a self assessment form, that any money earned from PAYE will also have to be disclosed, so keep you P60 safe! Also, late returns, non returns, carry heavy penalty fines.

When calculating your self employed business expenses, now and in the future, make sure you keep ALL receipts, to lower your tax burden. As this work was carried out at home, you can also claim a % of your gas and electricity bill, for the time spent on the project, so do keep all these utility bills as well.

Depending on where you live, if you only want assistance with completing the self assessment form, this could cost you in the region of £50.00.

If you have any queries, please do contact me.