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Slight NI/tax confusion

4 replies

2to3 · 01/07/2012 10:38

I freelanced for many years as self employed and paid my own tax/NI. Over a year ago I was employed 21 hrs a week and still am. I asked the HRMC helpline if I should still pay my NI, and the man said it was best to. So I still do. Is this right?
Also, does anyone know how much tax i'll have to pay on freelance work done on top of regular paid employment? I made peanuts last year, but am assuming I'll still have to pay 30% or so of it in January since I'm already above the minimum taxable limit from my regular job? Any help much appreciated.

OP posts:
fireice · 01/07/2012 10:46

Do you need to pay your own NI? I thought the limit was around £6k?
I think that tax is taken at the same rate it would be as if you were earning it in your job - so whatever the tax rate you normally pay is?

AgentProvocateur · 01/07/2012 10:55

I'm in the same boat and talked to HMRC last week. If you earn less that 5k (or similar - cant remember exact figures) through self employment, you can fill in a form for NI exemption. Otherwise, you pay through PAYE. And Class 2. Not sure about tax, but imagine you will get taxed on all your self employed earnings.

I'm deciding whether to give up the freelance work altogether.

TalkinPeace2 · 01/07/2012 13:10

Tax is cumulative on all your income streams - add them up for the whole year and work it out.
NI is applied to each income stream separately.
PAYE jobs are Class 1 at 13% ish
Self employed you pay the £2 a week of Class 2 and then class 4 at 9% on earnings over the limit.
If earning under the limit, you do not need to pay class 2 either.
so NI bills can be very low if you have lots of jobs and not much free range work.

limits and rates are here www.hmrc.gov.uk/rates/taxes-ni.htm

2to3 · 02/07/2012 22:57

Thanks v much - very helpful.

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