I'm very interested in running an one the side freelance webdesign service

 

I work fulltime for a design company already and don't think I'll take on more than 2-3 jobs freelance jobs a year.

 

Is there any kind of method which that anyone knows of where I can pay the tax on a particular job as and when I get it .

 

I.E Quote customer, build site, recieve pay and then pay the tax on that amount there and then.

 

Or will I have to signup for self assessment and do it yearly ?

 

 

I hope you all have some friendly advice and what I should do .

 

Thanks

 

Luke

Or will I have to signup for self assessment and do it yearly ?

 

That one.

Bit of a shame. Thanks for the advice

On some occasions I think you can opt to have any extra tax owed paid through PAYE via your employer (you'll need to double check that), but really if you're doing "on the side" work it's best/easiest to just fill in a tax return every year.

you could try using an umbrella company who will handle all the tax and nic issues for you but that'll be another piece of the money you earn out of your pocket but most charge a fixed fee so no matter how much you earn you'll still get charged the same amount for the service, it's worth looking into if you intend to make quite a decent amount off your contracts

Open a bank account and deposit your tax money in it after you complete each job, then at the end of the year use this money to pay your tax bill (either part or full).

 

The big bonus is that you'd earn a bit of interest on the money - probably not a lot but should cover a pizza or two

Get professional advice and think about VAT registration

Hi Luke,

 

I may be able to help you here as I used to work freelance.

 

I was paid through an umbrella company, but Gordon Brown soon put a stop to that.

 

I therefore set up my own Limited company. I was paid gross based on an hourly wage. Out of that amount I paid myself any expenses (which was only petrol @ 40p a mile), £100 per week salary, and a dividend payment. At £100 a week I wasn't liable for NI. Over the year, my salary was therefore £5,200 which was below the limit to pay income tax. Any dividends over approx. £36k will be charged at 32.5%. Dividends carry a 10% tax credit, so the tax payable is 22.5%.

 

Ensure to keep back 20% of your profits (i.e. turnover minus expenses (salary, petrol etc.) for corporation tax.

 

Your salary will be added to the salary you earn at your current job so may take you over the higher rate tax level (if not already!).

 

I'm not quite sure how to pay yourself a salary/dividend if you're not getting a regular flow of money into your company account.

 

Your other option I guess could be to set up as a sole trader. I'm not sure how that differs so you'd have to get advice.

 

Either way, you should probably get advice, but I didn't. However, I was working in construction and this way of setting up a ltd company is very common. I used an accountant but he was useless and I didn't end up paying him - don't trust them to get your accounts filed on time - you have to pester them.

 

Hope that helps a little. Sorry if it doesn't.