full time job, and doing small self employed jobs at weekend...? tax etc

[joko]

how does that work?

my mate works all week then occasionally at weekends does one off self employed jobs...these are not often though

do you have to be self employed in this instance? - can you be both? or do you just pay tax as an when you get a job?

he doesnt get enough work to go properly self employed, so how does it work?

also it is possible he is due to be laid off soon, so what would happen if he was signing on and doing occasional 1 or 2 day jobs at the weekends?
would he just declare them to the job centre and sort the tax that way? wouldnt they just take the cash back from him, so it would be pointless doing them for a while?

(i ask because I may soon find myself in a similar situation)

thanks

[CheekyChops]

You don#t say what kind of work he does but are you sure he isn't just doing 'foreigners' for cash in hand? I know lots of builders/plasterss/painters etc who do this - I know its wrong but they all do it!

[joko]

im not sure really what he does...but even so...what is the right thing for him to do?

how do you pay tax on what are kind of self emplyed earnings - if you are not SE and dont want to be permanently?

because i could not really do foreigners myself as a lot of it would be through the council and official companies i suppose..

thanks

[Buenchico]

HMRC will regard your friend as having two jobs, with one being as an employee and one as self-employed. He's legally obliged to register his business with HMRC. (That has to be done within 3 months of commencing self-employment, otherwise there's a £100 penalty). Since his full annual tax allowance will be used up within his employed work, he'll have to pay tax (at 20% unless he's earning enough to take him into the upper tax bracket) on every single penny he earns.

If your friend was signing on, he'd need to be aware of his 'signing weeks'. For example, he might need to 'sign on' on alternate Thursdays. That would mean that each 'signing week' would run from Friday to Thursday. If, during any such period, he worked for 16 hours or more, he'd be obliged to 'sign off' (for the relevant period) and then 'sign on' again, with the subsequent loss of benefit.

If your friend was 'signing on' but working for less than £16 hours per week, he'd lose benefit at a rate of £5 less than his earnings. For example, if he earned £40 in a week he'd lose £35 in benefit.

Chris

[twix123]

As Buenchico points out, HMRC will class your friend as Self Employed and will charge tax at his marginal rate, be it either 20% or 40%, but they will also charge both Class 2 and Class 4 National Insurance contributions. Class 2 contributions are currently charged at £ 2.40 per week and Class 4 at 8% of earnings. There is an exemption from payment if the earnings are low, for the current tax year the limit is £5075. Form CF10 available from the local Jobcentre Plus offices give full details of this exemption.

[Marktheharp]

You can be both employed and self-employed. If you are making a loss on your self employment you may even get a tax refund! However it has to be a serious business you're running for them to consider anything like that.