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Tax as a freelancer
Thread poster: ClaireM85
ClaireM85
ClaireM85
United Kingdom
Local time: 13:53
Spanish to English
+ ...
Apr 29, 2011

I would like to start working as a freelancer in the UK and was wondering if anyone could give me some helpful advice about the tax side of things? I currently work as a language teacher under the PAYE system and will probably continue this part time. I heard that you can earn up to £6K a year without paying tax - is this still the case if I have another income? Would I just be taxed on my first income? Any advice is much appreciated.
 
Gillian Searl
Gillian Searl  Identity Verified
United Kingdom
Local time: 13:53
German to English
The threshold is higher: Apr 30, 2011

http://www.hmrc.gov.uk/rates/it.htm

Just under £7500.

Once you go self-employed you have to register with HMRC. You will pay tax on the self-employed income through a tax return. At that point you will get adjustments for tax y... See more
http://www.hmrc.gov.uk/rates/it.htm

Just under £7500.

Once you go self-employed you have to register with HMRC. You will pay tax on the self-employed income through a tax return. At that point you will get adjustments for tax you have paid under the PAYE scheme. http://www.hmrc.gov.uk/incometax/starting-work.htm#6

Gillian ▲ Collapse
 
Liz Dexter (was Broomfield)
Liz Dexter (was Broomfield)  Identity Verified
United Kingdom
English
Worth going on the HMRC becoming self-employed course May 1, 2011

Hi there,

I started my business while I was employed full-time, and I found it useful to go on the HMRC course "Becoming self-employed", which told me about all the things I needed to do, records I needed to keep, etc. They ran mine at my local city library in their business section. It was great, and really helpful.

Also, if you're planning to make less than £5000 profit, get a Certificate of Small Earnings as you are exempt from certain National Insurance then - a... See more
Hi there,

I started my business while I was employed full-time, and I found it useful to go on the HMRC course "Becoming self-employed", which told me about all the things I needed to do, records I needed to keep, etc. They ran mine at my local city library in their business section. It was great, and really helpful.

Also, if you're planning to make less than £5000 profit, get a Certificate of Small Earnings as you are exempt from certain National Insurance then - ask the HMRC to do that for you.

Good luck!

Liz ▲ Collapse
 
Samantha Payn
Samantha Payn  Identity Verified
United Kingdom
Local time: 13:53
Member (2008)
Russian to English
+ ...
Tax free allowance May 1, 2011

Everyone is allowed to earn a certain amount of money free of tax in the UK - that threshold is adjusted each year, as Gillian's link showed. The threshold applies to any and all of your earnings - i.e. your tax code on your teaching job gets you the tax free allowance on your teaching earnings (which it will do, if that is your only source of income and you are on PAYE). If you start freelance work as well then that will be taxed in full if your teaching earnings are more than the tax free allo... See more
Everyone is allowed to earn a certain amount of money free of tax in the UK - that threshold is adjusted each year, as Gillian's link showed. The threshold applies to any and all of your earnings - i.e. your tax code on your teaching job gets you the tax free allowance on your teaching earnings (which it will do, if that is your only source of income and you are on PAYE). If you start freelance work as well then that will be taxed in full if your teaching earnings are more than the tax free allowance.
I recommend that you speak to your local inland revenue office and see how, and how much of your domestic bills you can offset against your freelance income if you are working from home. ▲ Collapse
 
ClaireM85
ClaireM85
United Kingdom
Local time: 13:53
Spanish to English
+ ...
TOPIC STARTER
Hassle? Aug 23, 2011

Thanks a lot for the advice and apologies for the late response (I haven't visited the site in some time). I talked to some friends who freelance as well as work 'regular' jobs and they made it sound like all the paperwork is a massive amount of hassle. Would you say they were exaggerating? I suppose my main concern is somehow underpaying tax or making a mistake that will come back to haunt me later, but looking at the HMRC site, it seems that they do most of the work for you and work out what y... See more
Thanks a lot for the advice and apologies for the late response (I haven't visited the site in some time). I talked to some friends who freelance as well as work 'regular' jobs and they made it sound like all the paperwork is a massive amount of hassle. Would you say they were exaggerating? I suppose my main concern is somehow underpaying tax or making a mistake that will come back to haunt me later, but looking at the HMRC site, it seems that they do most of the work for you and work out what you need to pay? ▲ Collapse
 


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Tax as a freelancer






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