How and what should I be paying on my second income

Probably a daft question.

I'm in full time employment, and so pay tax, NI contributions, pension etc and I do occasional freelance work on the odd weekend.

In what way am I supposed to declare the additional income?
Should I set up a seperate bank account, and do an end of year tax form for it?
And what level does my full time job salary affect my second income. I earn 23,000 a year?

Don't want to ring the NI just yet!!

thanx

 

Part time weekend working will mean registering with the Inland Revenue I'm afraid, and you need to do this within 3 months of starting trading, otherwise you will get a £100 penalty. You can register here:

HM Revenue & Customs: Register as self employed

You then need to fill in a Self Assessment return declaring your income - you will reeive one every year around April 5th. This needs to be completed and filed by 31st January the following year.

You'll be taxed at 22%, plus possibly some more National Insurance (Class 4) depending on your level of part time work. You can earn £14,000 a year on top of your £25,000 salary before incurring any Higher Rate tax (40%)

 

Hi,

I am in a similar predicament... I have started doing some occaisional weekend work to, worth about £2000 a year, paid as cash. My primary income is £26,720

Would the tax come off my primary income then?

I guess as I started in early May I need to declare soon!

 

No, you'd need to pay tax on the second income (the £2000 a year). There would be tax due of 22% on this - ie £440. You'll pay this be declaring the income on your 2007 Tax Return. The tax (and the tax return) will be due on31st Jan 2008.

 

Thanks for the information...

Turns out I'm not going to carry on doing this 2nd job after all. I have earner around £350 doing the job to date but will not be continuing with it (hey I like my weekends to much!)

I have yet to pay tax on that £350 though, as was paid cash in hand (although had to sign for it). I guess i'd better give my tax office a call...?

 

Are they looking for someone else to do it?? I can. Drop Me a line.

 

lol, you don't even know what the job is yet!?!