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Original poster

Small earning exception - worth getting?

13 replies

Alva · 01/12/2006 22:12

I've just registered as self-employed and will qualify for a certificate of small earnings. Should I get one, or are there major disadvantages? Very new to all this, and your thoughts are welcome!

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Original poster
Alva · 04/12/2006 19:32

I'm guessing that most freelancers earn well over the threshold so don't apply for one of these - but if anyone does know something about them it would be great to hear your thoughts. Just don't want to apply, and regret it later...

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carolcoles · 04/12/2006 19:35

I just spoke to the tax office about doing mobile hairdressing about £20-£30 a week but no one mentioned a certificate of small earnings???? What is it?

Original poster
Alva · 04/12/2006 20:02

As far as I can tell, it basically lets you off paying Class 2 National Insurance contributions, i.e. £2.10 per week. Not sure what the consequences would be, tho, hence the post... but you hardly ever get owt for nowt!
It's available for self-employed people who will earn less that £4,465 this tax year - that will prob include me, because I only started doing this a short time ago and don't have huge amounts of work yet.
I think you can only get it if that's your only job, i.e. it's not available if you are freelancing alongside a regular job.

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carolcoles · 04/12/2006 20:04

I have to ring the tax people when I start working so I'll have to ask them about it. Can't imagine what the down sides would be but as you say theres never "owt for nowt"

Original poster
Alva · 04/12/2006 20:15

Good luck with the business!

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carolcoles · 04/12/2006 20:41

Cheers, sounds a bit grand calling moseying roung trimming hair a business but every penny counts. It'll be nice to earn a bit of money again. What will you be doing?

Original poster
Alva · 04/12/2006 20:47

Just a bit of editorial work - but I agree, does feel good to be earning again!

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carolcoles · 04/12/2006 20:57

That sounds a bit more "business" like. Was that your career before babies?

I always had a big thing about earning my own money and being financialy independent and I've really struggled to get my head around being reliant on DH for money.

Even £20/30 a week would be great but feeling a bit apprehensive about whether it will be successful.

Original poster
Alva · 04/12/2006 23:08

I know what you mean about feeling apprehensive, but it's nice to get a chance to use those pre-baby skills - even if it's just a question of stealing a few hours to do a bit of "work" work, it does keep your hand in. And the cash is certainly handy!

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Brandybuttershott · 05/12/2006 11:21

I'm not sure there is a downside to be honest - if you have the small earnings exemption, it guarantees your pension rights, benefits etc in exactly the same way as if you were paying Class 2 NI contributions. I guess the only thing would be if you're not sure how much you'll be earning, then it might be best to pay the £10 a month or whatever in Class 2s straight away, rather than be chased for them once your earnings go over the limit, and have to pay a chunk.

Original poster
Alva · 05/12/2006 22:19

Really helpful - thanks Brandybuttershott.

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AlienEarsUnderSantasHat · 05/12/2006 22:23

You can use it if you are doing a regular job too - I am both employed and (very occasionally) freelance and do not pay Class 2 NI on my self-employed earning.

Original poster
Alva · 06/12/2006 11:48

Even better - I wasn't sure what would happen if I got a regular job. That's very good to know. Better get my form filled in...

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