Q: Hi. My wife is full-time employed and has been for all her working life. Therefore, she has had no need to think about Self-Assessment Tax Returns until recently. However, she’s begun to take on a small amount of freelance work in addition to her day job in the last year. Are there different rules or options for people in her position in terms of submitting a tax return and paying the tax she owes on that freelance work?
A: There are many people in your wife’s shoes who are working for an employer whilst also earning money carrying out another job as a freelancer or sole trader. Whilst anyone in this situation still needs to declare their income and do a tax return, there is another way to go about paying HMRC for those who are both self-employed and employed.
The same applies for those who are employed but have income from rental properties that needs to be declared on a Self-Assessment Tax Return. For those who have a tax liability up to £3,000, you can get it collected through your tax code. That means the amount you owe will get deducted on a monthly basis through your salary, via your employer’s PAYE process, rather than having to pay one large lump sum to the tax man.
However, to get that benefit of spreading out the payments you must act quickly. To be eligible, you have to submit your online tax return by 30 December.