Employment + Self-employment

[Ports]

Hi,

Although I was made redundant in August, the company decided they still need my services but on an hourly basis (casual work), so I have been doing some consultancy work for since then. Looking at my payslips, they pay my tax and NIC (including Friends Provident that they were contributing to when I was a full time employee)

At the same time, I've become self-employed and do some work for some other company. I understand that part of the self-employemnt responsibilities, I need to pay my own national insurance contributions. However, bearing in mind that my old company still does it (as per the previous paragraph) do I have to do it or should I do it? Would it make any difference?

Thank you

[ladymuck]

The two types of work are entirely separate.

Your employer is only applying tax and NI deductions to the work you're doing for them.

You will need to register with HMRC as self employed (if you are earning more than £1k a year from SE work). You will then submit an annual tax return of all your income and expenses that relate to your SE work. On that return you also declare the income from employment.

You'll then get a tax bill that assesses your whole income, knocks off the tax and NI already paid, and tells you what extra you have to pay.

[eek]

I would suggest you need to do 2 things ASAP

1) You need to register with HMRC as being self employed
2) open a Mettle account as that gets you a freeagent account.

And each job is different so you may need to pay NI and you will need to pay tax on your self employment work but it's not difficult if you have an app that does half the work for you (and Freeagent will).

[oilboil]

Hi,

Although I was made redundant in August, the company decided they still need my services but on an hourly basis (casual work), so I have been doing some consultancy work for since then. Looking at my payslips, they pay my tax and NIC (including Friends Provident that they were contributing to when I was a full time employee)

At the same time, I've become self-employed and do some work for some other company. I understand that part of the self-employemnt responsibilities, I need to pay my own national insurance contributions. However, bearing in mind that my old company still does it (as per the previous paragraph) do I have to do it or should I do it? Would it make any difference?

Thank you

The interesting question here is did they make you redundent correctly? The fact they still need you suggests they haven't made the role redundant and that maybe they acted incorrectly in canning your permie contract when they did

Did you get a tax-free redundancy payment? If you did you probably want to consult a tax specialist because right now (as it sounds like you are still on their payroll just paid as and when) you probbaly owe HMRC the tax-free element since you haven't wholly been made redundant by the company

[Ports]

The two types of work are entirely separate.

Your employer is only applying tax and NI deductions to the work you're doing for them.

You will need to register with HMRC as self employed (if you are earning more than £1k a year from SE work). You will then submit an annual tax return of all your income and expenses that relate to your SE work. On that return you also declare the income from employment.

You'll then get a tax bill that assesses your whole income, knocks off the tax and NI already paid, and tells you what extra you have to pay.

Thanks. I have already registered with HMRC as self-employed. While I understand that different sources of income are taxed separately (I'm aware I need to do a tax return now and pay tax for my SE work), I didn't know that NI contributions are work/employment specific. Thanks for the clarification. I've got my UTR number. Will need to google how to pay my NIC now.

[Ports]

I would suggest you need to do 2 things ASAP

1) You need to register with HMRC as being self employed
2) open a Mettle account as that gets you a freeagent account.

And each job is different so you may need to pay NI and you will need to pay tax on your self employment work but it's not difficult if you have an app that does half the work for you (and Freeagent will).

Thanks.

1. Already done.
2. Will do. Thank you.

[Ports]

The interesting question here is did they make you redundent correctly? The fact they still need you suggests they haven't made the role redundant and that maybe they acted incorrectly in canning your permie contract when they did

Did you get a tax-free redundancy payment? If you did you probably want to consult a tax specialist because right now (as it sounds like you are still on their payroll just paid as and when) you probbaly owe HMRC the tax-free element since you haven't wholly been made redundant by the company

Thanks. That is a good question but yes, I believe it was done correctly. I didn't go into the details in my original post but there were a lot of discussions about this very issue before the redundancy. I didn't start hourly work straight away after being made redundant. Furhtermore, I'm performing a slightly different type work for them now. Basically, the company is closing down now and they need me to tie a few loose ends. They consulted it with HR and payroll before they asked me to do some additional work.

[MrButton]

Thanks. That is a good question but yes, I believe it was done correctly. I didn't go into the details in my original post but there were a lot of discussions about this very issue before the redundancy. I didn't start hourly work straight away after being made redundant. Furhtermore, I'm performing a slightly different type work for them now. Basically, the company is closing down now and they need me to tie a few loose ends. They consulted it with HR and payroll before they asked me to do some additional work.

I would most definitely be getting independent (external to your employer) legal advice on this.