Forum

Paying tax on freelance while employed...?

4 March 2010 09:08

Hi there,

This is my first post on this forum (hi all :)) so be gentle.

I'm in full-time employment, and a former colleague of mine approached me to carry out some freelance copywriting work for her. But here's the catch: While I am a UK citizen, the company (office) offering the work is based in Switzerland.

As this is the first bit of freelance work that I have been asked to do outside of working for other departments in my company (so it is just added to my wages), how do I go about paying tax on the work?

Specifically I'm being asked for a VAT number but, as I'm employed, as far as I am aware, I'm not eligible for one am I?

I'm not sure what to do on this, and any help would be much appreciated.

Thanks

Kempas 5 March 2010 10:46

Nobody have any idea? :confused:

...back to the HMRC waiting list 😐
abkphoto 20 March 2010 13:46

I think so long as the work is carried out in the UK you are expected to declare your earnings. Presumably you live in the UK for most of the year. As for how to register with the Man, there is a guide on this website here Registering as self-employed: the basics :: Freelance UK which explains all.

I was a part-time freelancer for many years and simply declared to the HMRC that I was doing spare-time work. They sent me a tax return each year (which would now be a short tax return) automatically. I would declare my earnings (both employed and self-employed), any tax already paid through PAYE and any costs incurred.

As for the VAT issue (also explained in the guide), you wouldn't necessarily have a VAT number if you were freelancing full-time providing your taxable earnings are less than £68,000 per year.

You can voluntarily register for VAT, the main advantage of which is you get the VAT back you are charged on your costs (including equipment). But you then have to charge your clients VAT. Commercial clients who are VAT registered don't mind this because they can also claim this back.

If you are not VAT registered your clients will know the costs you are charging them (if any) may also include VAT which of course they can't claim back - but that should be the only negative from their standpoint.

Best policy is come clean about your status as a part-time freelancer from the start. When you are asked for a VAT number you simply write N/A or declare you are not VAT registered.

Good luck
Jane.Bordenave 22 March 2010 12:31

Re: Paying Tax on freelance while employed

Hi Kempas,

Nice to meet another newby :)

I agree with abkphoto, I'm more or less 100% certain that you have to declare self-employed earnings at the same time. It's like if you have a full time job and then work in a shop at the weekend - tax will be taken from both.

Hope this helps!

Jane