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Sole trader with full time job. How to do it?


julzt 15 181 England
12 Feb 2008 10:42AM

Quote:Quote:If you are registered as self employed AND emlpoyed, you will have to pay two lots of national insurance... don't get caught out... its a killer...If your earnings from self-employment are going to be under the relevant threshold, which is 4635 for the 2007/08 tax year, you can apply for a certificate of excpetion.

the tax threshold has nothing to do with national insurance contributions... you still have to pay them - i think if you are self employed and emplyed you have to pay level 2 AND 4 (think thats correct)
I have a part time picture editing job and my emplyers are fine to have me employed on a freelance basis - which means i avoid paying doule NI contributions.

Edit - also be aware that you need to build up a number of clients to show the taxman you are truly self employed - they are quite quick to pick up on people claiming they are self employed when in fact they only have 3 clients...
celyn 15 88 Wales
12 Feb 2008 10:56AM
If your earnings are less than 4635 in the year 07/08 then you can claim a small earning exemption for class 2 contributions using form cf10
http://www.hmrc.gov.uk/forms/cf10.pdf
Dont think the number of clients is relevant. I think the IR would still be interested if you only had 1 client who paid 10000 a year !
digicammad 17 22.0k 40 United Kingdom
12 Feb 2008 11:00AM

Quote:also be aware that you need to build up a number of clients to show the taxman you are truly self employed - they are quite quick to pick up on people claiming they are self employed when in fact they only have 3 clients...


Number of clients has nothing to do with it really. If you register as self employed they will expect you to provide a tax return, which will also include any PAYE earnings. They would expect your year on year earnings to increase but are sensible enough to realise that any new business takes a while to get going, particularly if it is only part time.

On the NI contributions, if you are expecting to earn less than 4635 you simply apply for an exemption. As soon as you start earning more you just call them and they will arrange a direct debit to take the basic amount. The rest will be taken as part of your tax payment at the end of the fax year and based upon your earnings.

Ian
emmaS 14 41 United Kingdom
21 Feb 2008 9:33AM
You're right, number of clients is irrelevant but taxman will look for evidence that you are actually trading - active marketing, real sales that sort of thing.

Otherwise there would be nothing to stop all us amateurs speculatively setting up a website, registering as self-employed and trying to claim the tax back to fund our hobbies. If only...!

Emma (who's proper job is still a tax accountant unfortunately!)

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