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Discuss Employed but doing private work. Tax Q's in the Business Related area at ElectriciansForums.net

J

jibspark

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Hi,

As you may have read from some of my other posts, im thinking of doing some private work now im qualified.

Im 26 years old and i work full time, it seems a waste not to use my qualifications for some extra income, the only thing putting me of doing some private work at weekends is that i dont know how to do it legally.

i understand that alot of you may be thinking "dont be so soft and just do it for cash" but im really worried about shooting myself in the foot.

Could some one tell me a bit more about being employed and self employed at the same time? What do i need to do, how much money will i lose? will it end up costing me money if i dont earn over a particular amount in my private work, etc etc.

Any help on this would be great!!!!


Thankyou

Neil
 
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E

EasyFox

  • Thread Starter Thread Starter
  • #2
Well first thing todo is make sure your employer has no problem with you setting up as SE for weekend work.
Then think of a company name, trot down to the tax office get the forms & register your company, you only get 3 months to do this from date of your first invoice to a customer after that you'll start racking up fines.
Decide when you are going to run your financial year from (mines 4th April), keep a accounts book of outgoing & incomming payments, keep all receipts & invoice copies.
At end of my financial year I tot up the columbs in the accounts book deduct outgoings from incommings ( hope a profit has been made :D) put totals into the online self assessment form submit it, Get a reply showing how much tax is due thats it job done. You then get notification in the post of how much & when by you need to pay.

The end of year tax you have to pay as SE can (if it's not a huge ammount) be paid by having your fulltime employment tax code changed. You request this when you do the self assessment form (I do mine on line) & the tax office then notify your fulltime employer of this code change & you see it on your next payslip.

Some useful links:
http://www.hmrc.gov.uk/leaflets/se1.pdf

HM Revenue & Customs:Self Assessment

Starting up | Business Link

Well first thing todo is make sure your employer has no problem with you setting up as SE for weekend work.
Then think of a company name, trot down to the tax office get the forms & register your company, you only get 3 months to do this from date of your first invoice to a customer after that you'll start racking up fines.
Decide when you are going to run your financial year from (mines 4th April), keep a accounts book of outgoing & incomming payments, keep all receipts & invoice copies.
At end of my financial year I tot up the columbs in the accounts book deduct outgoings from incommings ( hope a profit has been made :D) put totals into the online self assessment form submit it, Get a reply showing how much tax is due thats it job done. You then get notification in the post of how much & when by you need to pay.

The end of year tax you have to pay as SE can (if it's not a huge ammount) be paid by having your fulltime employment tax code changed. You request this when you do the self assessment form (I do mine on line) & the tax office then notify your fulltime employer of this code change & you see it on your next payslip.

Some useful links:
http://www.hmrc.gov.uk/leaflets/se1.pdf

HM Revenue & Customs:Self Assessment

Starting up | Business Link
 
Last edited by a moderator:
J

jibspark

  • Thread Starter Thread Starter
  • #3
thanks again easyfox, so i cant be se without having a company name?
that all sounds rather easy. would you reccomend having a business account too?
is there a particular percentage of tax i should expect to pay on the profit i earn?
when you say about have your main tax code changed, do they take the tax in one lump sum or spread it out over the year?

sorry for all the questions!

thank you!

Neil
 
G

Girlyspark

  • Thread Starter Thread Starter
  • #4
You don’t have to register as a company - in fact, if you do you will have to file accounts, minutes etc with Companies House. You can just be plain ‘Neil Bloggs’ and a ‘sole trader’.

Easy Fox’s advice is good and the Inland Revenue website is very helpful. Filing your return online is easy.

Make sure you keep your pay slips and P60 from your employment, as you will have to put this detail on your return.

Tax paid at same rate as your employed tax. Ie basic rate of 20%.
 
S

shagg

  • Thread Starter Thread Starter
  • #5
Hi jibspark just wanted to know if you did set up on your own at weekends? and if so how are you doing? cuz i'm thinking of doing the same thing.
 
G

GT1

  • Thread Starter Thread Starter
  • #6
shagg..

not sure if jibspark is out there, but this caught my eye as im going through it all right now myself too. All the advise ive seen here is pretty much on the nail compared to what ive been advised elsewhere.

The only thing i would add is that yu may want to consider engaging an accountant to help with the tax / book keeping side of things. The one i went to is a big company, and deals with multinational companies, but was more than willing to advise me. I got a 45 min consult free, full of usefull advise. Their charges were forecast at anything from 200 quid upto 4 or 5 hundred quid, per year depending on what they did for me. But of course accountants fees are deductable from income tax, and they would be dealing with that too. So if you earning enough through the business to be paying income tax, is pretty much worth doing.

Like the original poster, I'm fully employed, but have a little "hobby" business of my own doing small scale electrical work (and im fully qualified part p, 2382, 2391 etc etc) so the tax aspect was important to get right. Plus i dont have too much time to keep books or do tax returns...

Keep it simple to start with... sole trader.. keep receipts for everything business related and including mileage used in your own vehicle for the business, and invoice yourself @ 40pence per mile..!!
good luck
 
W

wattsup

  • Thread Starter Thread Starter
  • #7
just do what some government officials do
just claim it's your sisters house you are rewiring for free -;)
 
S

shagg

  • Thread Starter Thread Starter
  • #8
GT1...

I'm on the understanding that if you don't earn over 5k in the year, that you won't have to pay extra nic? But what i'd like to know is with it being a "hobby business" apart from the insurance cost's which is payed yearly, say if you didn't do much business you would't really be out of pocket because the tax is a percentage of the profits or is their some hidden cost which means you would be? Any replys is welcomed
 
S

Spudnik

  • Thread Starter Thread Starter
  • #9
So with these little 'sideline' businesses that you operate, do you main employers know?

Surely some must get a little twitchy about you maybe poaching their customers?
 
S

shagg

  • Thread Starter Thread Starter
  • #10
I would't poach my employers coustomers cuz i'm only lookin at doing small domestic work
 

bcm_spark

-
Arms
I once worked for a firm and during the induction they stated that we must NOT do any work on the side otherwise it's down the road and if you left the company you was not allowed to set-up on your own within 3 months of leaving and in a 10 mile radius to the companies office. This was all written in to the contract of employment too.

What are you fellas doing about Part P then?
 
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