Employed & self employed

[Userrrr346]

This might be a silly question but I’m thinking of starting up a business but I am currently employed. If I did start a business how would this work in terms of tax and national insurance? I want to keep my current job for a minimum of a year whilst trying to build on the business just to ensure I get enough income from it. I currently earn around £27k a year

You register with HMRC for the self employed part (probably as a sole trader from what you say). You then keep accounts in the usual way and when you fill in your tax return, you give your PAYE job details and HMRC will calculate the 'extra' tax you owe based on your self-employed earnings.

You may also need to let your employer know. I was both employed and self employed last year and my employer wanted to know how many hours a week I was doing on my self employed job and to ensure that it didn’t interfere with my employed work.

As PP has said, you just have to add your employed details to your self assessment tax return when you file it and they’ll work out whether you owe them anything on top of your PAYE.

Thank you both, and in terms of tax is it that I’d be taxed 20% on anything I earn from the self employed job?

Depends on how much profit you make or salary you take out of the business

Thank you @Hoppinggreen
I can’t get my head around whether it’s worth me setting up a cleaning business alongside my employed job. I’m coming to the end of maternity leave and on my day off I would like to try and clean at least 2 houses but I need to work out the tax implications and spending along with how much profit I’d make. Determined to be able to drop down to three days At work this year instead of the 4 I currently do.

Look at all the costs involved including travel and childcare (if needed), these may be tax deductible but need to be considered.
Work out how much it would actually cost you to fulfil a job and then see what’s left once you charge for it. Then deduct around 20% and decide if you are happy to work for that amount.
So if all costs would be £5 and you can charge £15 you will get £10. Then take 20% off (may be less but assume that) and decide if it’s worth £8 to do it.
Its a bit of an over simplification but can give you a guide as to whether it’s worth setting yourself up as a SE cleaner or not