Self Employed Tax Whilst Still Employed

[krsdav]

I have recently started working as self employed but am still also employed. When it comes to tax, i pay NI and PAYE with my employer. With my self employed income - do i need to retain 20% of everything I earn for tax from £0 or do I have a tax free allowance as for my employed income?

 

[Davek0974]

You only have one allowance, once thats used up, as mine is with my main employment, all profits are taxed.

I am making less than 5k in self employment so I am exempt from class2 NI payments too.

Smart accounting can help reduce your tax bill

 

[Arithmo]

If you have not already done so you need to inform HMRC that you have started in self employment, if you do not do this then you could be fined. You can get more details at http://www.hmrc.gov.uk/leaflets/se1.pdf. Probably worth you looking for an accountant as well.

Thanks

 

[MyAccountantOnline]

I have recently started working as self employed but am still also employed. When it comes to tax, i pay NI and PAYE with my employer. With my self employed income - do i need to retain 20% of everything I earn for tax from £0 or do I have a tax free allowance as for my employed income?

Its a very good idea to set aside funds for tax - as has been said you dont get two personal tax allowances so if your allowance is already being used against your earnings from employment you dont get a second one.

It may be worthwhile you looking at a limited company depending on your levels of income etc it may be a way to save tax. Have a chat with an accountant.

 

[DeanCo]

I have recently started working as self employed but am still also employed. When it comes to tax, i pay NI and PAYE with my employer. With my self employed income - do i need to retain 20% of everything I earn for tax from £0 or do I have a tax free allowance as for my employed income?

As already stated you have to pay tax on all earnings, whether from employment or self employment over your personal allowance (currently £7475). However, depending upon your circumstances there maybe other ways of saving tax. See How to Avoid Paying Tax

 

[phinatic]

i`m was i the same situation a year ago when i started my part time self employment business while working 30 hours a week in employment.

what i did was i kept back in a seperate account 30% of all my income from my partime business . Now i have just returned my self assessment forms and i have a tax bill of £237 while i had retained £835 (30% of my income) so i have effectively given myself almost a £500 bonus at the end of the year !!!!

thats how i have done it in my 1st year and its worked out nicely IMHO lol