Self employed to employed again tax???

[passthepotatoes]

Posting for traffic if poss.

DP has been self employed for 11years but is going to have to go back to employment in another job. He seems to think when he does this he will get heavily taxed ....

I don't understand it all anyone in the know?

Thank you

The current years tax allowance is £11500. He will pay tax on anything he earns over and above that.

He should get a tax code of 1150L for the current year. This is because it will be his first and only job for the year. Self employment does not count as employment for tax code purposes. A lot of people make a mistake and say that they have another job, and then they are put on the emergency tax code. He needs to sign a Starter Checklist and tick box A.

So he will get the same tax allowance as everybody else. If his total earnings to 5 April 2018 goes over £11500 he will pay any tax that is due on that, plus Class 4 NIC on any self employed earnings over £8060.

He can also be both employed and self employed at the same time

Thanks so much!
He wouldn't be both just employed.
So he would use a certain tax code to avoid emergency tax. Brill that was what was concerning him.

I think the only thing that would flag up for me is that as self employed, you have to pay an estimate of tax for the next tax year. So my dh is self employed, and he pays half of the estimate of the following years tax each January, based off earnings for the previous year. What he owes at the end of the tax year then has this amount deducted from it, if that makes sense? You would of course get this back I imagine if you report that you have ended your self employment, but I don't know how long that would take, perhaps until the end of the following tax year? Otherwise, the actual tax rates are, of course, the same assuming earnings are the same, though I did pay more in NI tax when employed than self-employed.

Yes he should have a 1150L tax code. They might do it on a week 1 basis but he wouldn’t lose a huge amount of tax and it would be sorted in his tax return and he would have a normal code from April

If any tax has been paid in account and a refund is due it can be refunded as soon as the return is filed, so file it ASAP after 5 April and you would get it back quickly

Thanks both I'll how him this thread it will make more sense to him