Can I work for an employer on the p.a.y.e scheme and also do work where I use a cis4 card to declare and track
wish to do extra construction work as self employed as well as my day job on paye, can i do this if everything declared legally?
Answers:
The PAYE (Pay As You Earn) system means your National Insurance and Tax etc get deducted proportionatly to the hours you work. It gets taken out of your paycheck and paid straight to the Tax office. This is called Class 1 contributions.
Self employed etc pay the Inland Revenue direct for their work by paying class 2 contributions. At the end of each year, they complete a Self Assesment form to find out much they have to pay.
You can be self employed and pay class 2 at the same time as being employed and paying class 1. All you do is tell the Inland Revenue (Number in the phone book) that you will be doing it and they will sort it.
One more thing; You don't even need to tell your employer that you are working for yourself. He has no obligation to know unless there is a clause which says so in your employment contract.
Being self employed, wether also employed or not can be tricky. Do what I did and take any advice they give you as to what to do.
It is perfectly ok to have more than one job at the same time even if one is PAYE and the other(s) self-employed.
The CIS4 is merely a card issued by HM Revenue & Customs (Inland Revenue) which allows you to be paid if you work within the Construction Industry. Without it, no contractor is obliged to pay you. When they do pay you, they will deduct 18% income tax and provide you with a monthly certificate called a CIS25 on which will be stated how much you were paid, the value of any materials you supplied, and how much tax was stopped. This certificate must be kept as evidence of the tax deducted and will form part of your annual Self Assessment Tax Return.
There are penalties for not informing HMRC of self-employment in good time, so before you commence, go and see an accountant who will advise you on how best to keep records and will deal with HMRC on your behalf.
The Class 1 and Class 2 mentioned in the previous answer refers only to different types of National Insurance Contribution. If you do not make profits of more than £4,465 in this tax year (6/4/06 - 5/4/07) then you do not HAVE to pay Class 2 NIC. You will then need to apply for a Small Earnings Exception (SEE).
There is also Class 4 NIC of 8% which is applied to profits in excess of £5,035 up to £33,540. Anything over £33,540 is charged at 1%.
If you need to apply for the SEE, ask your tax office for Form CF10 or download a copy from http://www.hmrc.gov.uk/forms/cf10.pdf. although they still have the 2005-06 version posted on their website. At least it will give you information you need.
Final words of wisdom. Get an accountant. If you don't know any, then ask friends, family and other construction workers for recommendations.
Good luck.
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Answers:
The PAYE (Pay As You Earn) system means your National Insurance and Tax etc get deducted proportionatly to the hours you work. It gets taken out of your paycheck and paid straight to the Tax office. This is called Class 1 contributions.
Self employed etc pay the Inland Revenue direct for their work by paying class 2 contributions. At the end of each year, they complete a Self Assesment form to find out much they have to pay.
You can be self employed and pay class 2 at the same time as being employed and paying class 1. All you do is tell the Inland Revenue (Number in the phone book) that you will be doing it and they will sort it.
One more thing; You don't even need to tell your employer that you are working for yourself. He has no obligation to know unless there is a clause which says so in your employment contract.
Being self employed, wether also employed or not can be tricky. Do what I did and take any advice they give you as to what to do.
It is perfectly ok to have more than one job at the same time even if one is PAYE and the other(s) self-employed.
The CIS4 is merely a card issued by HM Revenue & Customs (Inland Revenue) which allows you to be paid if you work within the Construction Industry. Without it, no contractor is obliged to pay you. When they do pay you, they will deduct 18% income tax and provide you with a monthly certificate called a CIS25 on which will be stated how much you were paid, the value of any materials you supplied, and how much tax was stopped. This certificate must be kept as evidence of the tax deducted and will form part of your annual Self Assessment Tax Return.
There are penalties for not informing HMRC of self-employment in good time, so before you commence, go and see an accountant who will advise you on how best to keep records and will deal with HMRC on your behalf.
The Class 1 and Class 2 mentioned in the previous answer refers only to different types of National Insurance Contribution. If you do not make profits of more than £4,465 in this tax year (6/4/06 - 5/4/07) then you do not HAVE to pay Class 2 NIC. You will then need to apply for a Small Earnings Exception (SEE).
There is also Class 4 NIC of 8% which is applied to profits in excess of £5,035 up to £33,540. Anything over £33,540 is charged at 1%.
If you need to apply for the SEE, ask your tax office for Form CF10 or download a copy from http://www.hmrc.gov.uk/forms/cf10.pdf. although they still have the 2005-06 version posted on their website. At least it will give you information you need.
Final words of wisdom. Get an accountant. If you don't know any, then ask friends, family and other construction workers for recommendations.
Good luck.
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