National Insurance while employed and self employed

[APC]

I'm currently employed full time elsewhere but I've recently started doing a bit of work for a friend and called inland revenue to let them know. The amount of money I'll earn will be negligible, perhaps £1,000 over the year. I'm keeping records of what I earn and am invoicing my mate for what I do.

 

I understand I need to keep some money aside to settle income tax when the time comes. After talking with the inland revenue person, I'm a little confused about NI contributions. Do I pay a % of my earnings or do I pay £2.40 a week no matter whether I earn £100 or £1000? Someone told me I might pay enough on my other job to not warrant paying NI on the private work?

 

Thank you for your help.

[Rupe]

Are you full time employed in tree work and doing tree work for your friend?

[andrew]

Normally self employed people pay Class 2 and class 4 National insurance.

If you are only doing it as a sideline, you probably don't need to pay class 2, which is the fixed amount per week bit, but you need to fill in a form and get a "small earnings exemption certificate". Might also want to check doing this doesn't affect benefits / pension, but think it is ok.

 

Class 4, the % bit, will come out in the wash with your income tax, but budget a bit extra for this!

 

some info here: HM Revenue & Customs: Class 2 National Insurance contributions

[ecolojim]

Ive been looking into this myself. What I really want to know is, are your two tax streams considered together or seperately when you inevitably have to fill in the self assessment form? and as such, can you offset tax paid PAYE through your employed income stream, with capital purchases to help invest in your self employed income stream... if that makes sense

[APC]

@Rupe: Employed as a ranger for local authority, work for mate too but am not his employee as such, but I bill him for my time, if that makes sense.

[Rupe]

Yeah makes sense, just hoping you werent't setting your self up with conficts of interest. You now, the tree surgeon who works for another at the weekend then finds himself sacked! That kind of thing.

[APC]

Yeah makes sense, just hoping you werent't setting your self up with conficts of interest. You now, the tree surgeon who works for another at the weekend then finds himself sacked! That kind of thing.

 

No conflict of interest so all happy