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Original poster

Do I need to register self employed?

19 replies

Rainbowstripes · 19/11/2021 02:58

Hi,
So I'm looking at doing 2 months work helping out a friends company on a self employed basis. I assumed I'd need to register self employed but looking into it it looks I might not if I'm earning less than £1000 over the year from self employed income? I was just wondering if anyone knows anything about this and if I'd still need to declare these earning anywhere as I do still also have a paye job so wouldn't want to be fined for trying to underpay on tax?
Thanks!

OP posts:
rrhuth · 19/11/2021 03:14

Have you read through these pages: www.gov.uk/working-for-yourself and
www.gov.uk/set-up-sole-trader

Are you certain you won't earn over 1k? Or is there a chance you might? If the latter, you may as well get your head round the process early on.

Original poster
Rainbowstripes · 19/11/2021 03:21

Thank you I'll have a look through them - I started to look into it when I came across the £1000 thing. I'm confident I won't be - I'm basically just going a day a week helping my friend out in the run up to Christmas and maybe a couple of weeks after but based on what we've talked about shouldn't earn more than £800 total

OP posts:
rrhuth · 19/11/2021 03:25

Why have you and your friend opted for the self-employed route? It sounds like a job!

funtimesahead100 · 19/11/2021 03:28

If you already have a PAYE job you most probably need to register as this will be additional income, especially if your already using your tax free allowance and pay tax

rrhuth · 19/11/2021 03:34

This might be useful as I don't think you are rightly self-employed, it sounds like employment.

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

Original poster
Rainbowstripes · 19/11/2021 03:44

@rrhuth

Why have you and your friend opted for the self-employed route? It sounds like a job!
I completely get how it looks like that and I don't want to say what the job is because it's quite a niche area and could be outting but it's standard for the industry it's in to be self employed - I could have my own clients as well if I wanted too (and did a few years ago when I did it full time) but in this case I'm only going back into it to help her out with her work load which is why I know I won't earn more than £1000 😊
OP posts:
Original poster
Rainbowstripes · 19/11/2021 03:47

@funtimesahead100

If you already have a PAYE job you most probably need to register as this will be additional income, especially if your already using your tax free allowance and pay tax
Great thank you that makes sense
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rrhuth · 19/11/2021 03:51

@Rainbowstripes The fact you are not having a direct relationship with the client is what makes it sound like employment.

It is not the industry that matters, it is the way you are contracted to do the work. You are working for your friend's business.

Original poster
Rainbowstripes · 19/11/2021 03:57

I am having direct contact with the client - I'm helping out with her workload in the run up to Christmas because she's suddenly had an influx of new clients so I'm helping out temporarily as we are trained in the same area (as I said I used to work in it full time with my own clients) sorry I don't mean to drip feed I shouldn't have made this post after a long day at work where my brain is a bit frazzled

OP posts:
funtimesahead100 · 19/11/2021 03:59

Actually having googled a bit more i think you don't need to register if your income is less than £1000 as per the article finmo.co.uk/im-employed-and-have-a-side-job-what-tax-do-i-owe/

rrhuth · 19/11/2021 04:01

I am having direct contact with the client

I said 'relationship' with the client as in contract relationship.

It doesn't sound like self-employment really, it sounds like you're working in her business.

rrhuth · 19/11/2021 04:08

If she is just passing a client to you then you are self-employed, but then you contract with the client. But if she is directing your work, you are working for her.

BarbaraofSeville · 19/11/2021 05:03

It's standard in lots of industries to be self employed, it doesn't mean it's legally correct. It's just a ruse to sidestep employment rights and NI and pension contributions.

Can't your friend employ you on a PAYE casual zero hours basis? If you're only doing a day a week, the NI will be low/minimal and I don't think she'll be obliged to pay into a pension for you as you won't be earning more than the (£10k I think) threshold.

Otherwise, you'll have to register as SE, do a tax return, and cruicially, tell HMRC that you are no longer SE afterwards, as you will be required to submit tax returns forever more unless you do this.

OnceUponAThread · 19/11/2021 10:16

So much mis-information on this thread.

If you'll earn less than £1K, you don't have to register. The government is crystal clear on this. That's still true even though you're employed on PAYE elsewhere.

So, as long as you don't earn more than £1K from self-employment by next April, you're absolutely fine.

As for whether the role counts as self-employed or not - that's a massive grey area. Technically not your problem. Your friend can get in trouble if she's flouting employment law to avoid paying pension contributions / living wage / NICs etc, but that's on them. Highly unlikely it would come up anyway.

Original poster
Rainbowstripes · 19/11/2021 18:13

@OnceUponAThread

So much mis-information on this thread.

If you'll earn less than £1K, you don't have to register. The government is crystal clear on this. That's still true even though you're employed on PAYE elsewhere.

So, as long as you don't earn more than £1K from self-employment by next April, you're absolutely fine.

As for whether the role counts as self-employed or not - that's a massive grey area. Technically not your problem. Your friend can get in trouble if she's flouting employment law to avoid paying pension contributions / living wage / NICs etc, but that's on them. Highly unlikely it would come up anyway.

Thank you I appreciate the straightforward answer!
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boringaccountant · 19/11/2021 18:15

OnceUponAThread is correct.
The only other point I'd make is that its £1k turnover, not profit. A few people get caught out by thinking they're under £1k after their costs, but it doesnt work like that.

OnceUponAThread · 19/11/2021 19:10

@boringaccountant

OnceUponAThread is correct. The only other point I'd make is that its £1k turnover, not profit. A few people get caught out by thinking they're under £1k after their costs, but it doesnt work like that.
Yes! Excellent point!
boringaccountant · 19/11/2021 19:28

Team work eh!

Original poster
Rainbowstripes · 19/11/2021 23:20

@boringaccountant

OnceUponAThread is correct. The only other point I'd make is that its £1k turnover, not profit. A few people get caught out by thinking they're under £1k after their costs, but it doesnt work like that.
That's good to know thank you!
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