Talk

Advanced search

Mumsnet has not checked the qualifications of anyone posting here. Free legal advice is available from a Citizen's Advice Bureau, and the Law Society can supply a list of local solicitors.

i'm emplyoed ........

(7 Posts)
blushingm Thu 24-Jul-08 10:12:16

and pay tax and ni via paye but i also do some courier work on a self emplyoed basis - what do i do about tax and ni on this? Do i decide how much petrol i've used and take it off and fill in a tax return - i really don't know please help

TIA x

temmy99 Thu 24-Jul-08 13:51:38

contact your nearest tax office but you may have to submit a self assessment return. There is a section where you complete your expenses incurred within the job. If Return is submitted, (I think) by the end of September, then they will calculate any tax owing otherwise if there is no tax owing they will still let you know.

ANTagony Thu 24-Jul-08 13:55:46

You also need to register as self employed and pay the weekly self employment NI contributions.

blushingm Thu 24-Jul-08 14:41:47

i only get about £60 per month from it - do i still need to do all this?

MrVibrating Thu 24-Jul-08 14:56:20

There is good news and bad news.

The bad news is you do have to register as self employed with HMRC. If you don't register within three months of starting self-employment there is a penalty of £100 per month so don't put off registering - they will catch up with you in the end.

There is lots of good news though:

1. It is easy to register - start here. You have to put the date you started self employment on the form - remember the three month penalty. You will be sent a tax return at the end of the year where you will have to fill in your income from self employment, your expenses (see below) and all your other income.

2. If you will earn less than £4,825 from self employment in the tax year (April 2008 to March 2009) you can apply for a small earnings certificate which means you won't have to pay NI on your self-employed earnings.

3. If you are earning more than that, Class 2 NIs are only £2.30 a week, but you will also have to pay Class 4 NIs at 8% on earnings over £5,435 in 2008/9.

4. You only have to pay NI at 1% on earnings above £40,040 in total (employed plus self employed). If this applies to you, particularly if you are earning more than that in your main job, you can apply to defer Class 2 (and Class 4) payments. If you end up overpaying (by more than a small amount), you can claim a refund anyway.

5. The best news is about expenses you can claim against your self employed earnings. Rather than the cost of petrol, you can claim at the Approved Mileage Rates which are supposed to cover insurance, road tax, wear and tear and depreciation etc. This is 40p a mile for a car (24p for a motorbike) for the first 10,000 miles in a year, so even at current prices, this is a lot more than the cost of petrol!

Whew - a long answer but I have been meaning to get all this in one place for a while to refer to.

MrVibrating Thu 24-Jul-08 15:08:38

Cross-posted, but yes you do have to do register and you can apply for the exemption certificate. This is because you will still have to pay tax on your earnings after expenses. I should have covered this in my original post, so amend 2. to

2. If you will earn less than £4,825 from self employment in the tax year (April 2008 to March 2009) you can apply for a small earnings certificate which means you won't have to pay NI on your self-employed earnings. You will have to pay tax though, which will be worked out from the tax return you send in after the end of the year. If you are earning a lot, you should work out how much this extra tax is likely to be and put money aside for it to avoid a nasty and perhaps unaffordable surprise. If you are in the higher rate tax band then you will end up with a bill in January 2010 for 40% of your net self-employed earnings in 2008-9, plus another 50% of this sum as payment on account for 2009-10.

blushingm Thu 24-Jul-08 20:32:32

wow mr vibrating (love the name grin) you know loads - i'll get registering asap thanks x

Join the discussion

Join the discussion

Registering is free, easy, and means you can join in the discussion, get discounts, win prizes and lots more.

Register now