| Freelance people |
 Chris123643 |
Hi, I know we have some freelance people here I was wondering whether you could answer a quick question...
Whats the deal with tax? If I accept a small job on a site such as "http://www.peopleperhour.com/" Do I need to sort any taxing out myself? From the little I've read I got the impression I only need to worry about it if I sell more than £73,000 worth in a year. I'm currently employed full time and would be doing any freelance in my spare time.
read 232 times
2/2/2012 7:22:31 PM (last edit: 2/2/2012 7:22:31 PM)
|
| ScotlandDave |
You have to pay tax on your earnings yeh, Income Tax rate of 20% for standard earnings. The 73 grand threshold is if you earn more than that you have to become VAT registered, although it`s optional/voluntary if you`re under that threshold..
Bout it really.
[edit] Afaik you`ll have to take into account your total earnings for job and freelance to work out your income tax rate..
[edit] Also bear in mind you can offset your tax with `business purchases` such as the cost of your workstation etc, if you`re registered as a sole trader or whatever..
GOT SICK OF OLD SIG HAVE AT THIS NEW ONE
read 218 times
2/2/2012 7:46:15 PM (last edit: 2/2/2012 7:48:38 PM)
|
| Jock |
At the end of the year you'll fill in your self assesment tax form, in which you'll declare the earnings from your full time work and then in another section, the money you earn from your freelancing.
At the end it will tell you what you owe or what youre owed.
Thats of course if you are wanting to do everything correctly.
read 207 times
2/2/2012 8:12:58 PM (last edit: 2/2/2012 8:13:54 PM)
|
| soontekk |
|
you can't run from the taxmonster :o
/ FOS4 / FO2 / iStockphoto / Twitter / Facebook / Vimeo /
read 201 times
2/2/2012 8:22:55 PM (last edit: 2/2/2012 8:22:55 PM)
|
| STRAT |
Chris, im in the same position, fully employed, and doing the odd extra freelance job in my own time.
It's a fekka, but you must legally pay tax on all your extra freelance stuff. even if it's a small picky job bringing you in a measly £100. you have to pay tax on it.
Ring up the tax man, tell him your exact situation, and he'll arrange an extra tax code for you to take these extra small earnings into account when you fill out your online tax return at the end of each year.
And yes, you'll automatically be expected to fill one out, even if your 'extra' earnings are zero. but dont worry, it's easy and straight forward. and your employer wont be privvy to this extra info.
I personally set aside around a 25% sum from each extra job i do especially for the tax when i need to pay it.
As an extra, which again is a must, you also need to pay extra National Insurance contributions if you're freelancing on the side. No way around it. But it's minimal. I'm paying an extra £10 per month. This can also be set up and arranged by the tax man. If you get several blank months of no extra work you can claim it back easily, but it's prudent setting up the direct debit anyway.
dont worry about the 75K VAT bracket. if you're doing that much then tell me your secret you rich fekka!
SJLEWORTHY.COM
read 158 times
2/3/2012 9:23:05 AM (last edit: 2/3/2012 9:28:58 AM)
|
| Chris123643 |
"and your employer wont be privvy to this extra info."
This was going to be my next question, would my employer find out about my extra work on the side? ... not 100% sure how that would go down with them, I'd imagine they wouldn't be thrilled.
read 147 times
2/3/2012 9:33:19 AM (last edit: 2/3/2012 9:33:19 AM)
|
| STRAT |
Nope. thats between you and the tax man i assure you. and tell him that. and besides, if for whatever reason he did catch on to the fact your tzx code is changed or extended, then there's numerous reasons, not of his business, that this might happen to someone without thinking "hold on a minute, my employee here is doing quiet extra work on the side"
it's none of his business and he'd respect that
SJLEWORTHY.COM
read 145 times
2/3/2012 9:34:15 AM (last edit: 2/3/2012 9:36:33 AM)
|
| ScotlandDave |
I was talking to a business adviser yesterday who was saying, don`t be afraid to contact client`s you`ve did work for previously for other companies. And i said `isnt there a name for that` :) But what she said was that although a lot of companies put in their contracts really stringent bans on any sort of competition after leaving the company, there isn`t a lot of legal basis for that and often doesn`t stand up in court. I wouldn`t want to go beyond basic ethical common-sense on that one but i think it`s interesting to know.. I think similar may apply if still working for said company..
GOT SICK OF OLD SIG HAVE AT THIS NEW ONE
read 123 times
2/3/2012 10:33:43 AM (last edit: 2/3/2012 10:33:43 AM)
|
| STRAT |
yup.
when i worked in my last big architecture firm, peeps often got up and left to start their own businesses. the company bosses always issued them with a document stating they cant use past or existing clients for a good 12 months.
legally, this is pretty hollow. wouldnt stand up in court as you say.
but, whatever, it's best to be wise and diplomatic. no need to piss anyone off if you can avoid it.
SJLEWORTHY.COM
read 123 times
2/3/2012 10:47:54 AM (last edit: 2/3/2012 10:55:23 AM)
|
| reeves1984 |
If you start a company, you'd basically be wanting those clients to come and work with YOU because while they worked with your previous client they probably worked with YOU so it's less you stealing them, more that they want you where ever you are :)
--
Simon Reeves
www.LemonGood.tv
www.simonreeves.com - freelance artist
twitter
read 109 times
2/3/2012 11:40:52 AM (last edit: 2/3/2012 11:40:52 AM)
|
| Chris123643 |
thanks for the info guys... great to have this resource with knowledgeable people giving striaght forward answers.
read 102 times
2/3/2012 12:02:38 PM (last edit: 2/3/2012 12:02:38 PM)
|
| reeves1984 |
FYI I save 30% and move it into a separate account as soon as I get paid - I think my tax has been over 25% or very close in years gone by taking into account NI and student loan repayments - if you save too much, cashback
--
Simon Reeves
www.LemonGood.tv
www.simonreeves.com - freelance artist
twitter
read 99 times
2/3/2012 12:06:52 PM (last edit: 2/3/2012 12:06:52 PM)
|