Mrs B here after 3 times of being on hold I can't keep affording the calls so hoping someone can help.
We are about 18 months into IVA. I am a full time teacher (currently on mat leave but back soon) and I am thinking of becoming an avon rep which means i would be both employed and self employed. What do I have to do with regards to tax and NI for Avon, I expect to make a few hundred a year not thousands (doing it to meet people really not to make huge profit.
Below is my biggest concern,
Will working for Avon have any effect on my current salary or tax code as a teacher? I ask this because I can't afford for my regular salary to be affected because then I owuld rely on Avon. Would I have 2 tax codes, how would I pay the tax on the Avon earnings.
It goes without saying that I would declare all earnings to IVA company as well.
It has been suggested (as you take cash from the customers) that I don't bother to declare it and many people don't but I am not this sort of person. Please help me as I need to know if it is worth my while becfore doing (I don't expect to make much but certainly don't want to be worse off)
Who have you been trying to call Mrs B? Your IP firm or the help line at the forum?
You would need to register with HMRC as a self-employed person for your Avon earnings, and set aside a sum of money each month from any profits you make to cover your eventual tax bill. As your full personal allowance is presumable set against your primary salary, you will pay full tax and NIC on the Avon earnings - I usually advise clients to set aside around 25% of earned profits, as there are some allowances you may be able to deduct - such as the use of your home as an office, and of course your petrol and wear and tear to the car.
Your regulal salary will not be affected by your self-employed earnings.
Thank you so very much for such a quick reply, I have been trying to contact HMRC to find out what to do but I am constantly on hold and my phone bill will be huge at this rate (you can't email them with tax quesries I checked) so don't even know where to start.
My main concern was my salary being affected. Would I have in effect 2 tax codes then? And do people tend to have to pay tax and NI at the end of the tax year?
Hi Benny
There are two ways of dealing with this, dictated by how much money you expect to make with Avon. You could register as Self Employed and submit a tax return at the end of the year, this will include both your paye income and tax deducted, and then you would need to pay the tax on the Avon profits at 20% or 40% depending on your total income. It can be tedious doing tax returns, however you could also estimate Other Income(from Avon) and have this included in your tax code and deducted from your teachers job. It really does depend on how much you think you are likely to make, and if it is only a few hundred that is probably easier for you. Hope this helps
Thanks nepensioner - I wish for my current salary to be left how it is! I can fill in a tax return that is great, when would I need to do one? Also when do I make this choice, is it on a form somwehere. Can somebody please indicate where I should start i.e. how to register as self employed?
http://www.hmrc.gov.uk/sa/register.htm tells you how to register. and what info is needed. If you started after 6/4/2012 your return will be due after 5/4/2013 and you can do this online. You will need to wait for your P60 for 2012/2013 tax year to enable you to complete the return. You need to register as soon as possible
27 years tax experience. Avon is self employment and you need to register with HMRC, do it on-line. Set aside approx 33% of Avon income because you will be required to self assess each year. You'll get basic tax return with supplementary pages for employment incone (teaching salary) and self employment page for Avon income. Keep simple accounts, earnings, outlay etc. I say set aside approx 33% because your teaches salary is likely to use up all your personal allowance so additional earnings will be taxable at basic rate (20%) and then there's NI, you'll need to speak to Ni office an register there also and pay class 2 NI was £2 per week but go on-line it'll tell the rates for each class. Basically any tax and ni due from Avon income you pay by 31 jan following the year in which the income is earned. So, if you have self employment earnings in the financial year 6 April 2012 to 5 April 2013 you file your tax return and pay the tax ni no later than 31 jan 2014. If you dont register self employed within 3 months of setting up you're liable to a fine.
Your teaching salary will continue to be taxed ad normal. Simple rule is one tax allowance against all income, so at the tax return stage you add both incomes together deduct allowances and calculate the rax and NI, on-line system takes you through step by stepm Log onto www.hmrc.gov.uk loads of info on there
