How do self assessment years work? and what to tell child tax credit agencies?

[PavlovtheCat]

I am thinking of becoming self employed, alongside my current day job. This is in preparation for potentially not having a day job within the next year or two, due to government privatising it. I have ideas of what I will be doing working for myself but it will take time to build up and so i will be working on this over the coming years. If i lose my day job, then I am in a good place to become self employed solely, if I keep my job I will perhaps be in a position to split my hours and earn a little more money.

I am not expecting the first year or two to earn more than £1000-2000 in my self employed role so it won't have a huge impact on tax etc, but will have to pay some.

So my questions are:

1. Is it really complicated to be self employed and PAYE at the same time?
2. how does the self employed years work - is it april -april like the normal financial year? or is it Jan-Jan? When I complete a self assessment say in Jan 2014, what year is that for?
3. what/how do I declare to child tax credit agencies? I currently get some tax credits, not a huge amount, and it might, or might not affect my credits - I am not worried about that, as the quicker I can stop being reliant on government support and their ever moving goalposts the better - but I don't know what to tell them in terms of do I tell them when I become self employed? or when I start earning money? Normally I tell them about last years income - so does this mean I don't have to tell them yet if I start earning right now?

thank you in advance!

You can call the tax office and ask all these questions for free - they are v good and not bad queues at this time of year.

Yes April to April - jan 2014 is the deadline for the tax year ending April 2013. You can do a tax return far earlier than that - may 2013 if you like!

When you start up you need to tell tax office asap and they issue you codes etc which will match up with your job tax codes do it should all work together.

Don't know about the other credits

oh do they? that's really useful. So, if I call them and register as self employed, they will address my tax code? does it change my taxable limits? ie, if I don't earn any money for a while, it won't affect the tax that I pay now in my day job will it?

If you earning small amount it won't change your code - it will only change if it pushes you into a higher bracket (50k?)

Do say on the phone - say no idea if I'll earn anything but maybe 2k a year

newgirl i wish! I hope that at some point in the future it can be successful enough to be my sole income, but even then it will most likely be enough to swap salaries. I can't see that I will be richer in monetary terms for this in the long term - the benefits will be largely family and lifestyle related, and give me some security when my career is not stable. I love the idea of being self employed, have wanted to do it for a while, and now it seems possible.

I actually feel quite excited! Especially as I am not having to make a 'decision' to change jobs, I can see how this works out before leaving my job/taking redundancy if it's offered.

Pavlov I'm so glad you started this thread as I'm also thinking of starting off an SE business while still in paid employment. I'm worried about the implications of tax credits etc., as I'm a single parent so don't have income from another person to rely on if the TC's are reduced. Think I'll ring HMRC next week for some further advice.

What kind of business are you thinking of starting?

Do get expert advice, but off the top of my head:

1. Is it really complicated to be self employed and PAYE at the same time?

No. There is a section of the self assessment that asks you about PAYE and you just plug in the numbers

1. how does the self employed years work - is it april -april like the normal financial year? or is it Jan-Jan? When I complete a self assessment say in Jan 2014, what year is that for?

You can do any dates you want, but it's probably easiest to go April to April. You pay tax the January after the end of your year. So I just ended FY April 2013 and will do my assessment January 2014.

1. what/how do I declare to child tax credit agencies? I currently get some tax credits, not a huge amount, and it might, or might not affect my credits - I am not worried about that, as the quicker I can stop being reliant on government support and their ever moving goalposts the better - but I don't know what to tell them in terms of do I tell them when I become self employed? or when I start earning money? Normally I tell them about last years income - so does this mean I don't have to tell them yet if I start earning right now?

Just like you do now. You give them a figure and they can check it against your self assessment. There's a question about it on TC form, I am pretty sure, asking if you are self employed.

I am not an accountant. Just SE!!!