Question
self employed - Tax and NI question?
Hi I have got a job as a leaflet distributor, this is only temporary for 3 months. I am a bit confused as to whether i will have to pay tax and NI as i have estimated that during this time i will earn approx £2,600. I feel a bit clueless as to how it works. Do i still have to register as self-employed and will i pay tax and NI?
1 month ago - 4 answers
Best Answer
Chosen by Asker
You should check with people hiring you as to what basis you are being taken on. It could be either status for this type of work. If you are employed, you may find they want to deduct a straight 20% deduction (code BR). You can stop that by asking employer for a form P46. Whether or not you are liable to tax depends on what you are doing for the rest of the tax year, 6th April to 5th April, but NI gets deducted on each pay packet in isolation. All UK citizens are entitled to a personal tax-free allowance of £6475 a year. If you are self-employed, you can register on www ... . That will be for Class 2 NI only, but you could come under the small incomes exception. You will not be liable for tax if this is your only income for the year, and you would not be liable for Class 4 NI.
Source(s)
Retired tax office employee, who used to deal with PAYE.
by steffi
1 month ago
Asker's Rating: 
Other Answers
If you are self-employed, you need to tell HMRC. You can do this on line. www ... Tell them that you expect to earn less than £6,000 in the current tax year and you won't have to pay National Insurance contributions. At the end of the tax year (5th April 2010) they will ask you to complete a self-assessment return. Provided your total income for the year is less than £6,000, there will be no tax or NI to pay.
by old know all- 1 month ago
Don't you apply for an exception from NI from small earnings (company) which lasts 3 years. However you can pay NI voluntarily if you want to retain your validity to the benefits. I think it is class2 (about £4per month)
by raysor- 1 month ago
Firstly you will not have to pay any tax if your annual income is less than £6,475. Secondly you need to find out if your are self employed or not. Do you have a contract of employment with anyone? How do you get paid? If you are genuinely self employed you need to inform HMRC and pay NI but the amount is going to be very small, if not NIL for the scenario you describe. If you are employed it is up to your employer to operate a PAYE scheme and deduct the correct amount of tax. If they deduct too much you can claim it back from HMRC. As mentioned above you should not pay any tax on the sum you mention, but bear in mind, do you have any other income? The sum of £2,600 will have to be added to other income, such as pensions, interest etc. I hope this helps. Don't be afraid of asking the local tax office for help. Look at their website - it is very easy to use.
by Peace- 1 month ago