Freelancing work (alongside a FT job)

Yes you will need to do self assessment. You can register for it online on the HMRC website they will then send you a reference number and will write to you just after April to remind you to fill out the tax return - it's done online and reasonably simple.

You will pay tax at the main rate you pay on your employment probably 20%. If you are already paying 40% or 50% tax on your main employment you'll pay that same tax rate on any additional income.

Thanks RV, big help!

Bugger. just checked - i earn just on the threshold of the 20%/40% break. does that mean anything i earn from this freelance work (that would take me over £35k a year) i'd have to pay 40% on?! that is harsh!!

Have you taken your personal allowance into account?

You'll have £8,105 tax free which may be reduced if you have any benefits like medical cover. You'll get a tax coding each year with your personal allowance.

You'll then pay 20% on anything between £8,105 & £34,370. Anything over that is at 40%.

Don't like the taxman...

You can earn 42,475 before paying 40% tax (8105 personal allowance + 34370 basic rate band) there may also be class 4 national insurance on self employment earnings over 7605

I'm just sorting this out too and was looking online what I don't get is with the 20% and 40% tax. If I earn say £50k do I pay 40% tax on the whole of the £50k or just the bit over the 40% fresh hold.

Just on the bit over the threshold

You will be able to get a small warning exemption from class 2 and 4 NIC on the self employment as you will be paying full class 1 on your employment

Small earning not warning... Gah iPhone!

As others have said. You need to do the following :-

1. Register for SA tax return within 3 months of starting self employment

https://online.hmrc.gov.uk/registration/newbusiness/introduction

2. Apply for small earning exemption

https://www.gov.uk/self-employed-national-insurance-rates

This means that you don't have to pay Class II NIC, but you will have to pay Class IV NIC on your profits at 9%

I'm an accountant so feel free to ask any questions you have

Thanks everyone - very helpful (although i would have preferred the answer to be "nah, don't bother just enjoy the extra pocket money!") but i guess that would make me like jimmy carr!

Don't forget your deductions though, my accountant allows me £2 per week for use of home office, mileage for jobs, materials, advertising etc.