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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4973
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I currently have two part time jobs: One is PAYE and the other

Resolved Question:

I currently have two part time jobs: One is PAYE and the other I complete on a self employed basis. I have been offered the chance to go PAYE (but on a zero hours contract so no access to hol pay etc.) on the second job but am unsure as to which will be the most beneficial financially for me. I would say I am just about up to the £9k or so limit on self employed role, and pay my NI by direct debit every month.
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

If your second job does not pay you holiday pay/sick pay etc then factors to be considered in the final decision are

As self employed -
You already pay Class 2 NI contributions £140.40 pa- these would cease and in its place you would pay Class 1 NI.

Additionally, you pay Class 4 NI based on profits in excess of £7,755 from self employment. If your profits are say £9,000 then Class 4 NI would be 1,245 x 9% = £112.05.

There would be savings on NI contribution if you were an employee.

I am not sure what expenses you have been able to deduct from your self employed income in arriving at profits but the scope for expenses is limited when you are an employee.

On the whole, there is little to choose between the two based on level of earnings etc.

You have to decide which option offers more security and continuity of regular second income.

I hope this is helpful and answers your question.


If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 3 years ago.

Hi

 

Thank you for replying.

 

Sorry, I re-read my question and realised that I omitted to mention that the income figure I mention is purely payments I have been made thus far, and not profit. By my calculations, I will have been paid £12000 in total by 5th April. I am a sports coach in a school, so my expenses are limited to fuel and laptop as far as I can see - unless you can advise me otherwise (given the limited information I've given)? My employed role is also as a sports coach, but for a sports club who did not want to pay me on a self employed basis.

 

I have been purely self-employed for the past 6 years but this was as a Carpenter and I was under the CIS scheme, which was obviously a different situation, so this is my first year under my new arrangements having made the career change.

 

Thanks

Expert:  taxadvisor.uk replied 3 years ago.
Thank you for your reply and clarification.

It would appear you will be performing your duties at one place most of the time and therefore your travel costs from home to your main place of work would not be deductible for tax purposes.

Other expenses you could claim for would also be limited as your job is labour only ( some allowance for special work related clothes etc).

It would appear there is little to choose between the two options. You may be better off being employed and on their payroll for your second job.

I hope this is helpful and answers your question.
Customer: replied 3 years ago.

Thank you for your further reply.



So, if from the month of February I become and employee at the school, and my income from this role being self employed is £9,000 in total will I pay no tax on this given that it is under the threshold? Also, going forward would I pay less tax on one of my jobs if I am employed in both?


 


Kind regards

Expert:  taxadvisor.uk replied 3 years ago.
You get one lot of personal allowance in a year and not one for each typr of income. You offset against your total income in the tax year from all sources.

So if you have already got £9,000 as self employed and then earn say £1,500 between Feb and Mar .. the two will be added to your earnings as employed coach for a sports club and you will get one personal allowance of £9,440 against total income and the rest will be chargeable to income tax.

I hope this is helpful
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 3 years ago.
I thank you for accepting my answer.

Good luck.

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