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Tax when employed and self employed

(8 Posts)
CrackedActress Thu 03-Nov-16 20:28:36

Hello, just a question for anyone good with this stuff!

I'm in full time employment and taking on some freelance work too.

I am an employee full time and freelance will be self employed.

I've read conflicting things about tax so just wondering :

I earn £33668 in my full time job before tax
Will earn about £500 a month freelance hopefully

How do I calculate tax? I'm guessing my freelance will be 20% tax as my personal allowance is used up?

Thanks in advance!

caroldecker Thu 03-Nov-16 20:47:50

Tax will be at 20% up to first £9,332 of freelance, then 40% over this as total income will be above higher rate band, depending on pension contributions. Hitting the higher rate band will also mean any child benefit needs to start being repaid
There are reductions you can make for the freelance work for costs associated with the job, but you may need some advice on the detail.
You will also need register with HMRC and pay class 2 and class 4 NI on the freelance income (around 9%).

This is all done via a tax return on-line.

I would always but about 33% of freelance earnings in a separate bank account for the tax bill - this should cover everything and leave a bit of a safety net. It probably is not a complex situation, but I would also pay for a one-off meeting with an accountant/tax specialist at the beginning to understand timing of filing, deductible expenses for your work etc. I would not bother paying them to do the tax returns, but possibly an hourly update every few years to understand changes to tax rules.

weveallkissedafrogor2 Mon 07-Nov-16 13:48:43

can I ask you a sort of related question...... in your full time employment ( obviously it will differ slightly) if you earn around £33 before tax what do you take home (ish) please? I have been offered a job with this wage but am wondering what the TAX will kill me on!!!

caroldecker Mon 07-Nov-16 19:30:08


Broadly speaking:

12% NI on over c£8k is £25k at 12% is £3k
20% tax over £10.6k is £22.6k at 20% is £4,520

Tax and NI is £7,520, take home is £25,480 or c£2,120 a month.

itlypocerka Mon 07-Nov-16 19:34:55

You don't have to do a tax return if this other earnings is the only thing that is complicated about your tax affairs.

You can write to the tax office and ask them to adjust your tax code due to £X of "other emoluments". They will adjust your paye code and you will pay the tax through paye and you won't have to think about it.

caroldecker Mon 07-Nov-16 21:41:13

itly That works if it is a fixed amount on income. Most freelance work is variable, so just changing the tax code won't work. Completing a tax return in this scenario takes about 30 mins once a year.

weveallkissedafrogor2 Mon 07-Nov-16 22:23:34

Thank you

CotswoldStrife Mon 07-Nov-16 22:27:35

I would also recommend letting the tax office know early, as you can then register to do your tax return online (which works the figures out for you) but you need to get a reference number (I can't remember the correct name for it) but you need to do it in advance!

Might want to check the NI position as well.

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