Are You Dual Employed? The Job Market and Tax Implications

Find out how working two jobs affect your financial year-end.

13:22 26 March 2013

If you run your own business and work as an employee, you are both self-employed and an employee. You will need to file with HM Revenue & Customs as a self-employed individual.

 

If you are working two jobs, such as running a business and working as an employee somewhere else, you do not want to earn over £150,000 a year as an individual. Why? You will fall into the 50per cent tax rate instead of the 40per cent, or the basic rate.

 

Even if you do not fall into the 50per cent category, working two jobs will affect your taxes in several different ways. Listed below are the ways it affects your taxes if you are working two jobs:

 

• Very likely that your second job will be completely taxed because your first job would use up your allowances.

 

• You will have to pay more into the National Insurance contributions.

 

• You still only have one personal allowance no matter what.

 

• The allowance this year is £8,105 for individuals.

 

• Can effect student loan payments.

 

Ways to work two jobs and not pay a tax rate:  Please note this is not cheating the government, and it is not illegal as long as you make sure that you do it correctly.  The government says you can earn less than the personal allowance from both jobs combined to avoid having to pay taxes on your tax return.

 

In order to do use this legal scheme correctly, make sure you tell the government to use your personal allowance against the second and first job as well.  This works for any amount of money you earn up to the allowance.

 

Consider whether it is better for you to keep working two jobs as you normally would, or to try this particular scheme.