Working as self employed and employee. Is it too complicate?

[Vixxxen]

I am self employed but there is maybe a chance I can become a employee in the mornings and run my business in the afternoon.

How is it going to pan out tax wise? Will I pay to much?
Will HMRC mess up with me?

I plan to close my business in January, then be a full time employee.

Have similar issue, though other way round, in that currently an employee. I think it all works itself out over time, though class 2 ni I am getting confused with.

In your case you would be stopping paying class 2 ni once no longer self employed. form ca8480 has a box on it to say you are no longer self employed. It is a form to claim back over paid NI. So I wonder if you use that, once you have become totally an employee.

Hi, currently you fill out the self employment page in your self assessment tax return and once you become an employee, you will also fill out an employment page in your self assessment tax return in the relevant tax year that this change happened.

Your employer will deduct Class 1 NI for you and also apply your full personal allowance to your employment.

While your self employment is continuing, you will still pay Class 2 NI and Class 4 NI and yes Cindy34 you will stop paying both of those NI contributions once your self employment business has ceased to exist.

It does all wash out when you fill out your self assessment tax return - depending on what you earn as an employee and your self employment earnings, you may find yourself underpaying tax but your unlikely to be overpaying as a result of employment.

The CA8480 form does allow you to get a refund for NI you have overpaid - so if you have not given adequte notice that your self employment will cease in January, your class 2 NI contributions will continue to be debited and then you would use that form to get them refunded back to the date your business ceased.

Hope that helps?

My dh used to do this and ended up paying tax twice, so he set up a LTD company, now all income goes through here and he has a wage. Far easier and even the accountant is tax deductible .
It also helped with companies who were employing him trying to get him to be self employed for the work, it is illegal but lots of people do it.

every situation is different...not sure why morethanpotateprints your dh paid tax twice as in Vixeens situation there is no reason why she should pay tax twice...limited companies are very expensive and complicated...the accountant is also tax deductible under self employment to and if Vixxxen you are planning to cease your self employment then there would be no benefit for you setting up a limited company

as for the illegality - those lots of people run the risk of getting caught so each to their own

I am both employed and self-employed. I don't earn a huge amount as a self-employed worker. I find it very straightforward and do a self-assessment tax return each year - filling the PAYE and self-employed sections as required.

Working through your own company isn;t "illegal" - I assume you're talking about IR 35 which (paraphrasing) says it it walks like a duck and quacks llike a duck then its probably a duck and we will tax you like you're a duck (duck = employed rather than an independent contracter).
So you run the risk if you're to all intents and purposes an employee pretending to be a company and avoiding NI then you wil get (if HMRC deem it so) taxed for both employers and employees NI on the relevant income.

I'm not sure how you get taxed twice on something unless you inadvertantly fill it in twice on your tax return - they look at your total personal income and allowances before calculating your tax.

I'm employed & self employed.

I work 3 days a week in an office for which I'm paid on PAYE. I run a business at the weekend providing children's classes. At the end ofcthe year I do my accounts & pay any tax due on that.

I am a company director, self employed and have three jobs
I never pay tax twice

Kewcumber.

My dh was employed by a school with a contract, they wanted him to be self employed and HMRC told him it was illegal and the school had to stop doing it. They had a whole department working like this.
He didn't have the company then he was self employed and employed by this school.
He ended up paying tax twice. It became difficult years later irrespective of the school, he had left this by then. So he started his own company iyswim

Talkin

Perhaps we should employ you as our accountant

I still don't entirely understand how you can pay tax more than once on the same income. But my head hurts at doing too much accounting this month so I could be wrong!

Talkinpeace - you obviously work too hard...

Morethan I have a policy of not taking on clients from the internet - even though I've known some of my 'imaginary friends' for ten years

Kewcumber not many hours at each one, but lots and lots of NI allowances