Freelance 2nd income from abroad?

Question

I have been offered the opportunity of working from home for a foreign employer in the US on a freelance infrequent basis and paid via Paypal. I'm guessing this would involve 10-20 hours per month on average.

As this is a foreign employer, would I need to declare this to the inland revenue (I already work full-time in the uk), and if so, would it be taxed at basic rate 22% - my total income from both jobs is unlikely to exceed the £33,000 mark required for highr rate.

Thanks

Answer 1

Of course you will have to declare it. Your tax is calculated on the total income you receive no matter what source.

As you are already working your employer will have already used up your tax free allowance (for 2007 -2008 £5225.00) and your 10% band and as the higher tax band does not kick in until you exceed £34,600 for 2007 -2008 (not £33,000.00) the earnings you get from the US would be charged at 22%.

There is also a legal requirment for you to register this second income with the Revenue, contact your local tax office. Do it now because if you don't and the Revenue find out later on its going to cost you a lot more than you might think.

Answer 2

Of course it's taxable, but you would be able to deduct any expenses, just like any other business. You would be liable at 22% on the profit.

Answer 3

What do you think ?

We have a "Rule of Brown" in UK = "If it can be Taxed, it will be Taxed" ...