How to make it so im (self) employed legitimately?

[MsSoozieSheep]

I'm not going to go into too much detail but for context, I'm a single parent to toddler DD, whose dad isn't exactly accomodating when it comes to having her at times it would make finding work easier for me. I'm also a student and receive universal credit. Plus this isn't exactly an aibu.. but anyway...

I've just started a new job, I do one shift a week and depending on how long it is, I typically earn £36 to £54 a week. This is all through "the books" and completely legit. Unfortunately I can't pick up anymore shifts here as I have DD and I can't get childcare (bar work and evening shifts).

A few months a go an acquaintance asked if I could could cover the odd shift at her business, and this was just paid cash at the end of a shift (yes I know this isn't exactly right but it was only supposed to be a couple of shifts here and there and not a long term thing). The issue is that the acquaintance is asking if I would like to work a regular shift a week, which I would, but is also paying me into my bank for the occasional shifts. She also wants me to be self employed, I suspect so she doesn't have to bother with tax and NI or holiday tbh.

How can I make this second job legit? I don't really know much about going self employed as I've never done it before. Would it be worth it for such a small amount each week or would it be better to decline the job?

Both jobs would total considerably less than the tax allowance each year, I think I can split this so I wouldn't pay tax but I'm not sure how to do that? How would NI work? Would i be complicated with universal credit explaining 2 different incomes? I've had issues in the past and I'm hardly loaded and rely on the extra money from UC each month.

Thanks

Self employment is a question of fact rather than choice. Have a look at the HMRC site to determine whether your work qualifies.

www.gov.uk/guidance/check-employment-status-for-tax

Register as a sole trader, providing 'freelance services'.

Do your tax return online each year.

Easy, just do it all online on the gov.uk site.

I have no idea how it then works if you are also being paid PAYE as an employee.. thats likely the complicated bit.

You would register as self employed through government gateway, and file a tax return at the end of each year. This asks you about income from employment and from your self employment and then works out how much tax you owe (or none if the total is under the threshold)

However you aren't self employed, you're working for a friend in her business and really she should be registering you as an employee so that you get the relevant perks.

It's easy. I earn part cash and part straight into my account and have a couple of jobs. All you do is fill in a tax return before it's due and declare what you earn. If it falls well below the tax threshold you won't have to pay any! Just take the money and stop worrying

For the new, regular shift it sounds like ‘false’ self employment’, for both tax and employment rights purposes.

If you’re OK with taking financial risks, would just continue ‘cash in hand’ for job 2.

Your 2nd job isn’t really self employed and you are facilitating your friends tax avoidance and other illegal activities (non payment of NI for example)
Not sure how you are going to legitimise that, or why you would want to even.

I already know I should be employed, but the acquaintance isn't going to make that official, I'm the one receiving the money into my bank and if UC look into that I'm committing fraud right?

I'm already struggling for work and these 2 shifts are basically perfect, but they do take me about what I'm allowed to earn before it effects UC so I don't want to end up in trouble at all.

it isn't fraud if you declare it on your tax form!

Have a look on YouTube there are good videos on there explaining this. If you invoice no more than £1000 per tax year for self employed work you won’t have to register or pay any tax, which sounds like it would apply. If you go over that you need to register and pay tax (if any) on your earnings. You’d need to invoice or give receipts and keep track of the income. Either way, you should declare it for your UC claim which I know may mess it up. If your friend is claiming you are self employed when you aren’t it’s probably not saving her any money, just a bit of admin. She can easily get a payroll service to stick you on payroll. It’s more likely to cause her hassle than it is you.

It will be fraud because UC is reduced based on what's earned in a month ( via HMRC) so it's undeclared earnings. Benefit fraud.

Stop receiving money immediately from this person and get to legit employ you. Not worth the field day HMRC would have with you if they decide to check your accounts.

Back when I was on UC I did get asked to provide 6 months bank statements to prove I wasn't earning anything extra ( I wasn't) and questioned every incoming payment on my bank statement

If your second job is under a certain amount every month (I think it’s around £200) they can pay you cash and you have to deal with it. As in, you declare it on HMRC online. You can go onto the gov website and see if any info helps you there. Either way, as long as you have declared it then you are completely safe tax wise it doesn’t matter if your friend has done it wrong that’s their problem.

But what about the “friend”?
They are behaving illegally by not paying NI etc.
I appreciate that’s not OPs responsibility but they are facilitating it

The other issue is that if the UC people get wind of this even if OP isn’t claiming fraudulently they could stop her UC while they investigate and it sounds like that would be an issue
I sympathise OP but this person is doing you no favours and could bring you a lot of trouble. They are behaving very unethically and you could well get caught up in that.

@Hoppinggreen

The other issue is that if the UC people get wind of this even if OP isn’t claiming fraudulently they could stop her UC while they investigate and it sounds like that would be an issue I sympathise OP but this person is doing you no favours and could bring you a lot of trouble. They are behaving very unethically and you could well get caught up in that.

Yes, this is a real risk - one of the (many) others is that you wouldn't be covered by any employer insurance whilst working for her. So if you were injured in any way you would have no cover and would be unable to work for anyone. And it would be hard to claim any benefit without disclosing how you came by the injury ....