If someone is working for an employer, on a fully employed PAYE basis, then they set their own business up, working on their spare time, how would they work their income tax?
Could the employer make them stay on PAYE, or could the employee insist on receiving their full pay before tax, and accounting for all the tax themselves?
An amature answer:
They would register as Self Employed within 3 months.
The Inland Revenue would send them a tax return. They would fill in separate sections for their employment and self-employment.
They may be able to have the owed tax collected through the next year's PAYE.
The IR may also change a tax code to collect extra tax during the year that it is being earned outside of employment.
In short, the employed income tax will be collected by PAYE. The Self Emploeyed income may be collected by PAYE in arrears or in future years, in advance of the tax return.
Employment NI will be collected by PAYE. Self Employment NI, if applicable, will be collected by monthly DD or quarterly bill, and via the Tax Return.
No, the Inland Revenue will, which amounts to the same thing.
No chance. In an employer/employee relationship, the employer is always required to make the statutory deductions, even if one is only contracted for a week.
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