Income Tax When Working Full Time And Freelancing

[Dom]

Afternoon all,

I've got a question about income tax. I'm employed full time, and as such, I pay tax automatically with the usual PAYE system.

But if I find some odd jobs outside of my full time job (I'm a web developer) then how does that affect my income tax? Presumably I'd need to declare it to the tax man somehow, but how would I do this? And just so I have an idea about how much of my extra income I might lose to tax, how would I calculate the tax?

Also, what are the repercussions if I didn't declare my extra income?

Thanks in advance for your help.

[Jack Hackett]

If you are earning an income from your web development business then you are self employed and need to notify the IR within three months of starting trading, although I'm not absolutely certain whether this means from the start of business or from your first amount of money earned - I'm sure someone will be along to clarify)

Your self employed tax liability is totally separate from your PAYE so don't worry about that. If you contact your local tax office they will advise you on what to do next.

Not declaring income can be a bit risky and not recommended if you want to sleep easy at night

[Dom]

Thanks for the reply.

It's good to know that my self-employed tax liability doesn't affect my PAYE. The main thing really was that I wondered whether having a full time job, and earning money on the side, would make me employed or self-employed (or both).

I guess contacting the tax guys and letting them know the situation would probably be the best thing to do.

[Jack Hackett]

Originally Posted by Dom

I wondered whether having a full time job, and earning money on the side, would make me employed or self-employed (or both).

Both. It may be wise to look for a good accountant. Although there will be costs involved in using one, what they can save you in tax usually makes it very worthwhile.