Setting up as sole trader

[abstibus]

My apologies if this question has been asked and answered before.
I am in full-time employment (PAYE) and am soon to retire.
I have been offered work on a consultancy basis after I retire (not with the same employer).
The company where I will be doing the initial consultancy work need my details to put me on the payroll - these are, of course, 'in full-time employment, etc.
Can I set up as a sole trader in the meantime, or do I have to wait until I retire to do this?
Who do I contact?
Any help would be greatly appreciated.

[boxtops]

There is a distinction to be made with being a sole trader/sself employed and being on the payroll. If you are on the payroll then the company you are consulting for will be responsible for deducting your tax and NI (and bear in mind that if you are retiring and drawing your state pension, you may still be liable for tax). However if you are self-employed then you have to pay your own tax and account for yourself. I apologise that I am probably telling you something you already know, but it leads into the way it works in my part of the NHS. If we contract with someone who is self-employed but not part of a company, we have to pay them via Payroll but in order NOT to pay tax, they have to produce a certificate of self-employment which the organisation checks with HRMC - if they invoice through a company then we treat them just like any other supplier and pay them via our payments system. Others will know better than I do but it would seem to me that you can become a sole trader whilst also working with a PAYE employer, but you will have to sort the tax implications out carefully at the end of 2011-12 to make sure you haven't overpaid or paid twice. I have occasional extramural income from others on top of my paid salary from my employer and BR is always taken off those payments as my employed salary fully covers my tax allowance. I'm sorry if this is a bit rambling, I am sure someone else will give you a more concise reply.

[abstibus]

Thank you, Boxtops
Can I register as a sole trader now before I retire, in addition to being employed?
TIA

[twix123]

There is no reason why you cannot set up in advance, it's just that you'll have no Self employed income until you start working for yourself, but if you go on the payroll of the compay employing you as a consultant, you'll be classed as an employee, and as Boxtops says, they will be liable to account for Tax and NI deductions, although if you're over retirement age there won't be any NI deducted from your salary only Employers NI.

I found the best way was to set up as Self Employed and account for Tax and NI under Self Assessment, invoicing the companies I consult for on a monthly basis. This way my pension from my previous employers uses up all my Tax Allowance and I pay tax and NI at the correct rates on my consultancy earnings, after deductng allowable expenses.

See the following link regarding Self Employment:

http://www.hmrc.gov.uk/startingup/index.htm

[Skyline D]

The answer to the question is "YES". You can be both a self employed sole trader and employed at the same time.

I'm in full time employment. I am also registered as self employed running a book-keeping service for a small number of clients in my own time. Nothing wrong with that.

[abstibus]

Thank you all for your help. I now know what I have to do, so wish me luck!