£12,500 taxed at 0%
£27,500 taxed at 20%: £5,500
No Class 1 NI on your first £8,632
Class 1 NI at 12% on your next £31,368: £3,764
£10,000 taxed at 20%: £2,000
£18,000 taxed at 40%: £7,200
Class 2 NI: £156
Class 4 NI at 9% on your next £10,000: £900
Class 4 NI at 2% on your next £18,000: £360
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As a PAYE your employer will calculate and deduct both Income Tax and National Insurance contributions for you.
Because you’ve earned over £1,000 from self-employment, you need to submit a Self Assessment tax return and pay Income Tax and National Insurance on this income.
These are all deducted from your salary by your employer every month.
You pay no Income Tax on the first £12,500 that you make.
You pay £5,500 (20%) on your salary between £12,500 and £40,000.
You pay no NI contributions on the first £8,632 that you make.
You pay£3,764 (12%) on your salary between £8,632 and £31,368
That’s not all. Your employer is also required to pay separate NI contributions, but these won’t come out of your wages. In your case they would need to pay an extra £4,329 – you should see these on your payslip.
You will need to submit a Self Assessment tax return and pay these taxes and contributions yourself. The deadline is January 31st of the following year.
You pay £2,000 (20%) on your self-employment income between £0 and £10,000.
You pay £7,200 (40%) on your self-employment income between £10,000 and £28,000.
You will need to pay Class 2 NI worth £156.
You will also have to pay £900 (9%) on £10,000 of your self-employment income.
You will have to pay an additional £360 (2%) on another £18,000 of your self-employment income.
Most people in full-time jobs who only have PAYE income never have to bother with tax returns.
The only times when you need to submit a Self Assessment tax return are:
If you’re not sure which one applies to you, read our guide to who needs to file a tax return here – it’s a long list
If you don’t tell HMRC that you’re no longer self-employed, they’ll still expect you to file a Self Assessment tax return.
You’ll be fined if you don’t – even if you owe no tax at all.
The way you tell HMRC that you stopped being self-employed is by filing a tax return and specifying that it’s your last one.
Your UTR number is a Unique Taxpayer Reference that you get when you register for Self Assessment.
It consists of 10 digits (sometimes with a letter K at the end) and is issued to you by HMRC.
Check out our guide to getting a UTR.
Depending on your situation, you may be entitled to claim different expenses back on your Self Assessment.
If you’re self-employed you can claim expenses individually (full list here) or claim the £1,000 Trading Allowance.
If you’re a landlord, you can claim certain replacement items, renovations and if you live in the property (full list here) or claim the £1,000 Property Income Allowance.
Other general allowances can be found here for investors, high-earners and other taxpayers.
The tax code is just a series of numbers and letters that tells HMRC how much tax you should be paying.
The numbers in your tax code tell your employer or pension provider how much tax-free income you are entitled to in that tax year.
The most common one for 2019/20 will be 1250L:
If you take a second job, then you don’t get a personal allowance for this one, so you need to make sure that the job that pays you the most is the one with “L” and not “BR”.
Figuring out how much tax you owe if you’re both employed and self-employed is hard.
Correctly filing a personal tax return is even harder.
At TaxScouts, we do it for you online, fast, and for just £119, all in.
And we mean a few. After a couple of minutes of answering questions online we’ll have everything we need to start working on your tax return.
That’s right, you’ll be matched with a real accountant who is best suited to prepare your return. Plus, they’re on hand for questions whenever you need.
Once you’ve signed off your return, your TaxScouts accountant will file your return online with HMRC. That’s it! We told you it was simple.