Declaring self employed income

[JoylessNewMarriage]

I’ve recently started doing a bit of a sideline working from home as a bookkeeper. I earn about £150 a week at the moment so it’s going well. I also work four days a week as a housekeeper earning £20k. I pay PAYE on my main income and have looked up registering self employed for the bookkeeping.

I can only find info from HMRC on earnings last tax year. Do I wait until after next April to register my self employed income?

Sorry is this is a slightly daft question for a bookkeeper, clearly I don’t touch tax, I leave that to the accountant!

No, you call them now. There is no benefit and no drawback to waiting. They are very helpful. Call them and tell them what you're doing. You will be asked to complete a tax return ever year which is fairly straightforward as long as you keep accurate records.

You'll pay class 2 NI on your earnings, plus tax. Depending on your salary in your PAYE job that could be 20% or 40%. I'd advise putting that percentage aside right away for the tax bill when it comes.

You should call them the day you started as ni needs to be registered even if you haven't met the threshold. Your tax is due August of next year. You will pay 20% tax on your earnings as it's a second job so you may consider looking into setting up a company if your business grows, but it does concern me for your clients that you don't know these things if you are claiming to be a bookkeeper - this is what my clients pay me to advise on (anybody can put figures in an accounts package)

Thanks both, that’s helpful I’ll make the calls today.

I’m preparing invoices and reconciling bank statements I’m very clear that I don’t deal with tax. I’ve just started studying AAT level 2 after several years in an admin assistant role. Thanks for your concern for my clients but they’re fully aware.

Register as self employed as soon as you can, and do your tax return as soon after the April year-end as you can.

If you started this work in (say) June 2019, you will do your first tax return for the partial tax year June 2019-Mar 2020. The deadline for filling in your tax return for that tax year is 31st Jan 2021 but your tax payment is also due that day. If you file earlier, you will know what your bill will be, and can plan/save for it.

You can also offset business expenses against your tax liability. I work in an industry where most people are self- employed, and I can offset things like tools bought for work, office supplies, clothing etc.