sole trader while working

[GaryVincent]

Hi i'm wanting to start a small sideline business from home as a sole trader while i'm still employed in my current job. Is this legal ? Also how do i go about paying my Tax and NI ?

Thank You in advance

 

[StevensOnln1]

What does your employment contract say about doing other work outside your employment? When you start trading you register as self employed with HMRC who will then issue a tax return which you will need to file each year to declare your income/expenses and profits. This gets added to your employment income to calculate how much income tax is due (less the income tax already deducted by your employer). You pay Class 2 NI (currently £2.75 per week and you can claim exemption if your profit is less than £5,885) and Class 4 NI on self employment profits above £7,956, which is paid alongside your income tax calculated on your tax return.

 

[GaryVincent]

So what ever money the business earns is then added to my yearly wage and then i'm taxed accordingly ? So for example if i only make £1000 i will be taxed for that £1000 and my employment wage ?

If i then pay £2.75pw that will cover NI ?

If i buy business materials will i be able to claim anything back?

Thank You

 

[StevensOnln1]

Your business profits (income less expenses) are added to your employment income. There is nothing to claim back as such on business purchases, it just reduces your profit and therefore the amount of tax you pay.

 

[Scalloway]

More information on business expenses here

https://www.gov.uk/self-employed-records/business-expenses

 

[GaryVincent]

Thank you all for your help and guidance .