Income tax question - contract from previous employer
#1
Income tax question - contract from previous employer
I wonder if anyone can offer me an explanation as to how I can do this with the minimum amout of fuss and hassle.
I left my previous employer of 12 years last March to work for another organisation. A piece of work has come up back in the old place and they have asked me if I would like to take it on as a 'consultant' or contractor.
My current contract of employment does not prevent me from taking on additional work or running my own business, my concern is with the tax man.
My current earnings are just outside the 40p tax bracket. I reckon the piece of work will be completed in around three months (only working the odd evening and weekend on it) - how do I go about declaring the addional earnings during this period?
As the work is for a government department I doubt they will be able to pay the tax 'at source' on my behalf.
Any advice appreciated.
TT
I left my previous employer of 12 years last March to work for another organisation. A piece of work has come up back in the old place and they have asked me if I would like to take it on as a 'consultant' or contractor.
My current contract of employment does not prevent me from taking on additional work or running my own business, my concern is with the tax man.
My current earnings are just outside the 40p tax bracket. I reckon the piece of work will be completed in around three months (only working the odd evening and weekend on it) - how do I go about declaring the addional earnings during this period?
As the work is for a government department I doubt they will be able to pay the tax 'at source' on my behalf.
Any advice appreciated.
TT
#2
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Originally Posted by tarmac terror
As the work is for a government department I doubt they will be able to pay the tax 'at source' on my behalf.
TT
TT
Thats odd...... i would have thought they'd be more than willing to take the tax at source......
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You should either be able to work via some contract agency and do PAYE with them (would be the simplest option, they obviously take some charge or fee by providing the PAYE service) or join an "umbrella company". The umbrella company takes care of the billing, tax and NI etc for a fee. But the advantage include the ability to claim expenses before tax (so mileage costs, stationary, phone calls etc) plus you may be able to receive the bulk of the payments via dividends, thereby saving some NI and putting more money in your pocket. This would probably mean you have to complete a tax return annually for the next few years, but could be worth the hassle.
Do some research (Google is your friend) and talk to a contract agency or two. I am sure they will be more than happy to help you as you will be bringing business to them
Do some research (Google is your friend) and talk to a contract agency or two. I am sure they will be more than happy to help you as you will be bringing business to them
#6
Or just throw together an invoice and send it to them, DO NOT INCLUDE VAT as you are not likely to be VAT registered. They will pay and they you decide whether to declare it.....There is no need to be a Ltd company to do work as a consultant. Its an advantage over a longer period but not in the short term.
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