Employed but with freelance work as well

[loobyloo78]

I am employed full time but have recently been offered some additional work for around 20 hours a month on a self-employed basis.

Does anyone know how I go about paying tax and NI on this additional income? Do I need to register myself as self-employed?

Thanks
Lucie

[Piper-AK]

You will need to fill in a self-assessment form with additional pages for the PAYE employment you do and the self-employed work you do. Just write to your normal Inland Revenue office (your payroll can tell you who they are) and tell them what you're doing - they'll set a record up for you and issue you with forms at the right time.

You also need to register with National Insurance Contributions Office (if it's still called that - everything seems to be merging these days in the Revenue world) - self employed people pay class 2 and class 4 contribions normally. As you already pay contributions in your PAYE job, and depending on your self-employed income, you may be able to apply for a small-earnings exemption certificate - they'll send you the appropriate bumph.

[kags]

You also need to be aware that it may be some time before you pay the tax and Class 4 National Insurance Contributions (the Class 2 contributions are payable weekly or monthly, but as mentioned above you may qualify for exemption or deferment of these). If you start work now, you will normally make your first payment on 31 January 2007, at which point you may also need to start making payments on account for the next tax year. All this depends on the amounts involved, if they are small the Revenue may collect them through your tax code instead. But make sure you put enough money aside!

Piper-AK is right about all the various contributions and tax offices merging, these days you only need contact your Revenue and Customs office (HMRC) to sort out both tax and National Insurance.