Solitary chicken - need advice

[Lewis]

Omleteers always know the answer so wondered if anyone could help me...

 

Have recently graduated from Uni so while I look for a proper full time job I've been offered a small job (less than 10 hours a week) by a theatre company I've known for years.

I need to become self employed and invoice them for the time so they can pay me and they want me to register as self employed so I can pay tax, NI etc, which is fine.

Apparently I'll also need to keep a record of the miles I do for them as will be driving round arranging things.

 

BUT I'll also be looking for a full-time job (they know this) and I was wondering if when I get one, as its a second job will I have to pay 20% tax on that job?

 

I tried to ring HMRC earlier to check but after 15 mins of being on hold I got bored of wasting my minutes and gave up!

 

Thanks in advance

[Charlottechicken]

The personal tax allowance (the amount you can earn before you pay any tax) is £9440 for 2013/2014, so even if you have two jobs you will not pay anything until you reach that amount per year. Similar rules apply for National Insurance, but I believe the rates are lower, somewhere around £5k. However, that is if you are employed, I don't think self employed will be much different.

 

This linky might be of some use HMRC

 

Hopefully, someone who is self employed will be along shortly to offer more detailed advice!

[The Dogmother]

I agree with Claire, Lewis. As you know, I work a 48 hour week and have two other ad hoc jobs. I invoice them for the agreed amount and keep a record of it on a spreadsheet, I also keep a record of the miles I accrue getting to one of these jobs as I can claim that back.

 

Hope this helps

[welovemarmite]

ok. If you get another job. your tax code will automatically be used on that income if it is normal employment. Then, you will declare your self employed income in your annual tax return. from that you will deduct any unused tax code and pay tax on the rest. You will be able to reduce the self employed income by deducting your expenses such as mileage. THe hmrc website will be able to tell you how much you can claim per mile.

[The Dogmother]

............THe hmrc website will be able to tell you how much you can claim per mile.

 

They told me 45p/mile

[welovemarmite]

that sounds about right. it can change year on year.

[sjp]

registering as self employed is the easy bit you do that on line but it's a bit long winded as you have to set up a gateway account first then wait until to get the password and login details through the post then you can register as self employed/sole trader just remember to get receipts for everything you buy for work including repairs, fuel car tax etc. if your signing on ask the job centre about the New Enterprise Allowance scheme it might be of help it's how I got started

[sadietoo]

Lewis you need to register as self-employed either on the gateway as has been mentioned or by downloading and completing a CWF1 from the Revenue's website. As a self employed person you are liable for Class 2 NIC but if your self employed earnings are likely to be less than the threshold then you can apply for an exemption...the form and current threshold will be on the website, check www.hmrc.gov.uk/forms. Otherwise you need to arrange to pay £2.70 per week.

 

Because you are going to be self-employed you will also be taken into Self Assessment, and will be asked to complete a Tax Return form. The first return you will complete will be for the year ended 5 April 2014, and the filing deadlines are paper 31 October 2014, or online 31 January 2015. Any tax due on your self employed earnings for 2013/14 will be payable on 31 January 2015. If the tax you owe is more than £1000, or if less than 80% of the tax you are due to pay is deducted at source, you will also have to make payments on account for the following tax year. These will be based on the agreed tax for 2013/14 and are payable in two equal instalments on 31 January and 31 July 2015 . So if, for example, your tax bill was £1500 for 2013/14, you would also be asked to pay £750 in January and July 2015 towards your next tax bill.(Making the total due in January £2250 in this example - are you still with me?).

 

As others have said there are more things you can claim for as a self employed person but there are two ways of claiming for your car expenses. One is a flat 45p a mile for every business mile you travel (keep a mileage log of either business use or private use of your car. Don't forget to jot down the odometer reading at the beginning and end!) and the other is by claiming the business use proportion of all of your motoring expenses (including repairs insurance road tax etc) as well as capital allowances (depreciation) on the car itself If your business mileage isn't great you might find it easier to claim the straight 45p a mile. Either way keep a mileage log (did I already say that! following a recent tax case the Revenue are asking for these more and more)> You can also claim for business use of your mobile phone, laptop/tablet/computer and broad band connection if applicable.

 

With regard to running a PAYE job alongside your self-employment this shouldn't be a problem. But bear in mind that although the tax allowance is 9445 this is split monthly over the tax year. As you won't have a P45 to hand in when you start work you will need to complete a form P46 to get the benefit of your unused allowances in the period to starting work, or you will go on a month 1 code (so you'll pay the right amount each month but it won't be retrospective to the beginning of the tax year).

 

Oh..and don't forget student loan repayments if you have them will be calculated on your total income for the year, including your self employed profit, and so that January tax bill may well include these too.

 

Sorry for the essay

This is the simplified tax system!

 

Good luck!

[Lewis]

That's amazingly helpful, thank you!

 

Have registered with HMRC, was mainly worried about implications it might have if I get a full-time job but I guess if that happens I can sort it out later!

 

Won't complicate it claiming for broadband and phone but we're doing an arts expo in a couple weeks so am getting 5000 leaflets printed so will add those to my expenses!

Think it will be easier to stick to the 45p/mile for mileage. Do I just need to write down how many miles travelled or the odometer reading from my car? And do I have to keel fuel receipts?

Sorry for all the questions!

[The Dogmother]

Yes, start up a spreadsheet, note the mileage and keep all receipts too. Mine shows earnings, details of the project, and any expenditure involved such as mileage.

[sjp]

with phone calls I only use my mobile for business calls so every time I top up I get a receipt for it

with your mileage the way we had to do at the last place I worked at was record the van mileage at the start of each day and then at the end of the day in your case it'll be for each work related journey. don't forget to get a VAT receipt for the printing you won't claim the VAT but company you work for might be able to

[sadietoo]

Hi Lewis,

 

If you are claiming 45p a mile, you just need to record your business mileage and you don't need to keep any fuel receipts. If you were claiming on the actual method, you'd have to keep all your car related receipts. as well as record your total mileage and business (or private) mileage to work out the business use proportion. As others have already said, keep your receipts for any specific expenses you wish to claim. If you have any questions now or nearer to tax return completion time please feel free to pm me.