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PAYE employment plus self employed...

(16 Posts)
Itsnotahoover Wed 09-Jan-13 23:30:25

I've been pointed in this direction from AIBU. I'm currently employed in one, well paid, job at weekends and another, badly paid, job for a few hours in he week which I hate! I've been offered a job dog walking for 10 hours a week, but this would mean gong self employed and I'm confused how this would work in relation to tax credits etc. I would have a contract for the hors I would do, which would be the same, unless I took on more clients, but how would I go on declaring this along with my other job?

Thanks in advance smile

MrAnchovy Thu 10-Jan-13 02:13:37

Self employed income needs to be declared for tax credits and reduces the amount you get the same as employed income does, based on an estimate of your earnings (this will probably change under Universal Credit some time in the future).

However as far as self employment goes the dog walking at that level is in a grey area between a business and what HMRC term "hobby income" so I suggest you call the HMRC newly self employed help line (unlike the general help line these people know what they are talking about, and are also more likely to answer the phone 3 weeks before tax returns are due. Make sure you give them all the detail, get the name of the person you spoke to and take notes of the key points and the time of the call. They may tell you to register as self employed, but they may say they can deal with it through your tax code.

You also need to call Tax Credits with the estimate of income.

But if you earn less than £109 in each of the other jobs, say so now because the advice will be different. This is particularly important if it is possible you may become pregnant.

anonymosity Thu 10-Jan-13 02:16:18

You cannot be both PAYE and self employed. You just need to inform HMwhathave you that you've taken on another job, at what price and they can add tax / adjust tax each year. I did this and actually ended up with rebates for several years (because I stopped the self-employed bit).
OR you could simply do the dog walking as cash in hand - isn't that how it works normal?

anonymosity Thu 10-Jan-13 02:16:58

oh heavens, I meant to say "how it works normally" I sound like a...

Tee2072 Thu 10-Jan-13 06:32:07

"You cannot be both PAYE and self employed."

Unless they've changed the rules in the last year, yes, you can.

TheFollyfootandtheivy Thu 10-Jan-13 06:56:33

You do pay tax separately through PAYE and self-employment as Tee says...

You arent telling the OP not to declare her earnings are you anonymosity? Daft advice if you are...

FiveGoMadInDorset Thu 10-Jan-13 07:01:22

Er yes you can, I am, I pay tax on both and also pay NIC contributions.

Itsnotahoover Thu 10-Jan-13 07:51:28

Thanks guys. I'd be shooting myself in the foot if I didn't declare anyway, as my weekend hours don't add up to enough to be able to claim working tax credits, and I believe at under 16 hours a week the job centre wold class me as technically unemployed, so I would be hounded to look for additional employment!

MrAnchovy Thu 10-Jan-13 10:18:46

"I believe at under 16 hours a week the job centre wold class me as technically unemployed, so I would be hounded to look for additional employment!"

Changes proposed under Universal Credit are likely to mean that you will still be hounded until you work full time.

MirandaWest Thu 10-Jan-13 10:23:34

I work both PAYE and self employed. You are taxed at source for the PAYE and then do a tax return. And pay lots of NI (although remember if you earn not much self employed you don't have to pay class 2 NI as you can get an exemption certificate. Can't remember what the limits are but it will say on the HMRC website.

MrAnchovy Thu 10-Jan-13 10:29:43

So if your other two jobs add up to less than 16 hours, are you getting more than £107pw (£109pw from April) in either of them? If not you are not getting credit towards the basic state pension: registering as self employed and paying Class 2 NI contributions will correct this, as well as entitling you to Maternity Allowance (if relevant) and certain other benefits.

Itsnotahoover Thu 10-Jan-13 10:32:18

Does it not make a difference how much you earn? My part time weekend job pays the equivalent of 25 hours a week at minumum wage.

VerlaineChasedRimbauds Thu 10-Jan-13 10:38:40

I am both employed and self-employed. it causes no problems at all. as MirandaWest says, you pay tax at source for the PAYE and then declare your self-employed earnings in your tax return. You can also deduct any business expenses from your self-employed earnings and you will only be taxed on the profit you make (business expenses for dog-walking might not amount to much, but every little helps so make sure you keep accounts and any receipts for expenses you incur during your self-employed business).

pluCaChange Thu 10-Jan-13 11:13:44

Not sure how it works with tax credits, but tax returns are designed for everyone in the country. There are probably bits of the tax return which only apply to the circumstances of one person (and if that person dies, it stays in the tax return, just in case!). So any amount of income can be "captured", whether hobby income or penny royalties from writing apps! The tax returns we're writing now, moreover, are for the year to April '12, so won't be affected by anything you started recently.

However, tax credits may be based on current income, so treat that question separately.

MrAnchovy Thu 10-Jan-13 14:02:18

"So any amount of income can be "captured", whether hobby income or penny royalties from writing apps!"

Yes this can be captured by a tax return, but for sundry income less than £2,500pa it is HMRC practice to manage this via PAYE.

pluCaChange Thu 10-Jan-13 17:27:13

Thanks, MrAnchovy. I just left my PAYE company out of things when doing my freelance work. 'Twas none of their business. grin

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