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Do you need to register as self-employed?
1 September 2004
Many MPs' researchers also carry out freelance work as an extra source of income, but how does this affect their PAYE employment with the MP?
Should I register as self-employed?
If you have occasional earnings from a source other than your usual PAYE
employment then it would be advisable to register as self employed.
You can see further details on this on the Inland
Revenue Website.
Can't I just declare my additional earnings at
the end of the year?
No, you can't just declare it at the end of the year unless you register as
self-employed. You will have to complete a self-assessment return each
year, but it is fairly straightforward.
What do I do about income tax and national insurance
contributions?
That's where the self-assessment return comes in; it will help the
Inland Revenue to work out any additional contributions you may need to pay.
If I become self-employed, how will it affect my PAYE
employment?
The quick answer is that it won't. You can be both self-employed and
employed at the same time. Your employer will make the relevant deductions
as normal, and the deductions for your self-employment can either be paid by
direct debit on a monthly basis, or they can be invoiced to you on a
quarterly basis.
Is it easy to register as self-employed? Does it cost anything?
It's free to register, and very easy too. Simply ring the Inland
Revenue's Helpline for the Newly Self-Employed on 08459 15 45 15 and tell
them that you wish to register as self-employed as well as continuing with
your employment. The whole process takes approximately five minutes.
Make sure you have your National Insurance details to hand before you ring,
and also your payroll number, which can be found on your most recent pay
slip.
Would I be better off buying an off-the-shelf company
& registering for VAT?
Unless you are going to earn more than £58,000 through your sideline, it is
not worth registering as a Limited Company or for VAT.
Further reading:
