• This is a stand-to for an incoming competition, one of our most expensive yet.
    Later this week we're going to be offering the opportunity to Win £270 Rab Neutrino Pro military down jacket
    Visit the thread at that link above and Watch it to be notified as soon as the competition goes live

Self employed Nat Ins and Income Tax payments

#1
I'm in receipt of my full pension every month, plus whatever I make through the Army Reserves. Both of which I am taxed and pay NI on respectively. I have been offered a casual driving job with a courier firm, where I can work 2/3 days a week to earn a bit of extra spends. They will take me on as a self-employed driver at £7.50ph, so I will have to declare the extra income myself.
How do I go about this every month? I don't want to get bummed with a big tax bill at the end of the financial year when I fill out my self assessment form (I also earn from my second house although it's less than what I pay out on it every month).
Many thanks
 
#3
My advice would be to get a good accountant.

They know all the tricks, and will start claiming back for your clothing, stationary etc. I only pay mine £250 a year and she saves me way more than that, and she's tax deductible!

If you want to do it yourself, an Excel spreadsheet with days/hours worked (X £7.50), less any deductibles, lunch, coffee, business meal, new shoes/work shirts etc.

But get an accountant!

Edit £7.50 PH sounds very low when not PAYE and you're doing your own books.
 
#4
I'm in receipt of my full pension every month, plus whatever I make through the Army Reserves. Both of which I am taxed and pay NI on respectively. I have been offered a casual driving job with a courier firm, where I can work 2/3 days a week to earn a bit of extra spends. They will take me on as a self-employed driver at £7.50ph, so I will have to declare the extra income myself.
How do I go about this every month? I don't want to get bummed with a big tax bill at the end of the financial year when I fill out my self assessment form (I also earn from my second house although it's less than what I pay out on it every month).
Many thanks
You just fill out a self assessment form and lodge it with HMRC by the end of January in that tax year.
You also work out your tax liablilty so you will know what it is when you have done the sums.

If you are already paying tax/ni on your existing earnings you are already above your personal allowance, there will be a tax liablity for this extra income. As far as I know this existing income would also have to be declared on the form.
Lettings income also has to be declared although if you have declared as a proper landlord and have the correct mortage ect permissions with a BTL mortgage you will be able to claim expenses against this income. If not keep it off the form but be aware you are in breach.

Tax you pay will be in 2 increments. Tax on that years earnings will be with the form by 31st Jan and half of next years estimated bill will fall due on 31st July. The following year you will balance the January payment and pay half again.

You need to sit down and do some sums to see if this little job is financially viable. May be more trouble than it's worth.

An accountant will do all this for you but of course comes with a cost which in itself is an expense which can be used to reduce your tax liablity.
 
#5
My advice would be to get a good accountant.

They know all the tricks, and will start claiming back for your clothing, stationary etc. I only pay mine £250 a year and she saves me way more than that, and she's tax deductible!

If you want to do it yourself, an Excel spreadsheet with days/hours worked (X £7.50), less any deductibles, lunch, coffee, business meal, new shoes/work shirts etc.

But get an accountant!

Edit £7.50 PH sounds very low when not PAYE and you're doing your own books.
If you don’t mind me asking, what’s your status, I have been told an accountant is not tax deductible, hence I file my own returns which I am sure I would pay less if I had an accountant.
 

BiscuitsAB

LE
Moderator
#6
My advice would be to get a good accountant.

They know all the tricks, and will start claiming back for your clothing, stationary etc. I only pay mine £250 a year and she saves me way more than that, and she's tax deductible!

If you want to do it yourself, an Excel spreadsheet with days/hours worked (X £7.50), less any deductibles, lunch, coffee, business meal, new shoes/work shirts etc.

But get an accountant!

Edit £7.50 PH sounds very low when not PAYE and you're doing your own books.
My advice get Charlie4 to give you his accountants details or I can give you mine. However remember they are only accountants and in the main are nothing more than gloryfied book keepers, they don't don't know all the tricks and often do nothing more than book keeping and then send you a bill at the end of the year. Good ones in this day and age are far and few between.

Given that you will be driving a lot, you'll probably end up with more deductables than your making and may even be able offset some of the income against the rental property that isn't covering its arse.
 
#7
....They will take me on as a self-employed driver at £7.50ph, so I will have to declare the extra income myself......
...Edit £7.50 PH sounds very low when not PAYE and you're doing your own books.
Minimum wage, they are just going to pay you the ‘full’ £7.50 and you have to do all the admin
Any deduction costs you take will reduce your wage to below minimum wage (which is ok for the second employed you don’t have a legal minimum wage)
 
#8
If you don’t mind me asking, what’s your status, I have been told an accountant is not tax deductible, hence I file my own returns which I am sure I would pay less if I had an accountant.
Accountancy is a business (self employed) expense. It is very much tax deductable.

Many self employer wouldn't have the nous to complete the forms so would automatically employ an accountant.

Minimum wage, they are just going to pay you the ‘full’ £7.50 and you have to do all the admin
Any deduction costs you take will reduce your wage to below minimum wage (which is ok for the second employed you don’t have a legal minimum wage)
A serious think by the OP is needed on this one. Exploitation and all that and this is what part of the Uber dispute is about.
 
#9
I'm in receipt of my full pension every month, plus whatever I make through the Army Reserves. Both of which I am taxed and pay NI on respectively. I have been offered a casual driving job with a courier firm, where I can work 2/3 days a week to earn a bit of extra spends. They will take me on as a self-employed driver at £7.50ph, so I will have to declare the extra income myself.
How do I go about this every month? I don't want to get bummed with a big tax bill at the end of the financial year when I fill out my self assessment form (I also earn from my second house although it's less than what I pay out on it every month).
Many thanks
Go PAYE on the new job,, BUT as you are getting, I assume a state pension, or a service pension, your state AND service pension will be classed as unearned income, and added to your gross wages and be taxed as a whole. been there, done it, which ever way you do it, you cannot get out of paying tax. the whole lot as far as they are concerned is taxable, over your allotted allowances. If in doubt consult an accountant, that specialises in the self employed.
 
#10
Alarm bells. Op should not be paying NI on pension. It's income so taxable, but not earnings so no NI. See an accountant for a one-off consultation, make a job decision after that. We don't know nothing, us.
 
#11
If you don’t mind me asking, what’s your status, I have been told an accountant is not tax deductible, hence I file my own returns which I am sure I would pay less if I had an accountant.
Self employed sole trader. As Geezer says "Accountants are very much tax deductible"


As are my expensive "business" meals once a month!
 
#12
All good advice above. I am self employed and a good accountant will pay for himself over time. One other thing to look at is, can you offload some of your new wages onto the wife. It doesn't work out for everyone and is dependant on both your incomes but a good accountant will advise you.
 

FORMER_FYRDMAN

LE
Book Reviewer
#13
I'm in receipt of my full pension every month, plus whatever I make through the Army Reserves. Both of which I am taxed and pay NI on respectively. I have been offered a casual driving job with a courier firm, where I can work 2/3 days a week to earn a bit of extra spends. They will take me on as a self-employed driver at £7.50ph, so I will have to declare the extra income myself.
How do I go about this every month? I don't want to get bummed with a big tax bill at the end of the financial year when I fill out my self assessment form (I also earn from my second house although it's less than what I pay out on it every month).
Many thanks
For the rest see an accountant but re the big bill bit. You should have a rough idea of what that big bill will be so put the money aside whilst reminding yourself that it's not your money. Big bill will then not be a problem.

P.S. Use the money set side for the big bill to buy premium bonds until the big bill becomes due.
 
#14
For the rest see an accountant but re the big bill bit. You should have a rough idea of what that big bill will be so put the money aside whilst reminding yourself that it's not your money. Big bill will then not be a problem.

P.S. Use the money set side for the big bill to buy premium bonds until the big bill becomes due.
Retireing last year after 30 years of self employment, on surrendering my books for their final audit, I got back a goodly amount from those sons of fun, the tax men. As previously stated, a good accountant will claim for you every thing that is legal including:- room in the house for an office, all tools and equipment, running your car, percentages depend on family car or van. out of pocket exercises. a secretary, possibly the wife! storage facilities (shed) his fee. and much much more, but you must keep receipts, and a book of money in, money out, to include a list of all invoices and bill of sales. Pay him his fee, you will get back more than you spend.
 
#15
Totally agree with the above comment(s). Self-employed but retired so don't pay NI and only pay Corporation tax. My accountant does not do tax evasion or avoidance, he calls it 'reducing my tax footprint' and boy, does he do a good job or else I have very small feet !!. Well worth the money I pay him for the money he saves me. Sadly i have to have my own Christmas party (tax deductable) but may buy myself some tax-deductable presents. Any spare cash goes into silver which i can pay my daughter when she does some work for me. Good long-term investment for both of us.
 

Issi

War Hero
#18
Definitely get an accountant, but phone a few first to get an idea of the fees they charge.
The fees can be wildly different for the same amount of work.
 
#19
I initially used Tax Assist UK. They have reasonably competitive fees but generally not all the staff are accountants. As soon as I switched to an independent accountant, they reduced my tax footprint by £500 thereby saving me half of my year's accountants fees. Worth it in the long run
 

Similar threads

Latest Threads

Top