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I currently live in the UK. I work full time (37.5 hours a week) at an agency. I get paid a fixed salary for this.

I've been approached by someone in New Zealand to hire me by working remotely, I will be working around 15 hours a week for them and get paid by the hour.

My current employment has an accountant who does all my National Insurance and Income tax. I'm not sure what I need to do when I start having a second income, do I need to tell my accountant about this? Will I have to work out my own taxes if my second job does not have an accountant?

I'm a little stuck on knowing what to do next - what will be the best approach for me to do?

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First of all, make sure whether your current employer may fire you if you work for another employer. Not sure about the UK, but in Germany, you always have to file it with your employer, who may object to the side job of a full-time employee for various reasons. (E.g. you have to be fit when you work for your "main" employer, so you may not work for another employer in your "recreational time" without his approval.) Also make sure that you don't break any employee protection laws (maximum hours per day/week, minimum pause, working on Sunday/Holidays).

Second, check whether the "side job" is you being "self-employed" or whether you are legally a normal employee of the NZ company. If the first, make sure you don't break self-employment laws in the UK (which you may, by having only one client); if the second, make sure that you don't break employment/tax laws in NZ (which you may, not having a NZ work visa and/or paying taxes in the UK only).

If you got there successfully, you will then be on your own with your taxes. Your company accountant will do the (pre)tax as before, but you have to make sure that you declare everything you earn and pay everything you owe. Visit a tax adviser specialized in taxation of international work contracts; I would also recommend to contact a NZ-based tax adviser as well.

  • do you have a source for "break[ing] self-employment laws in the UK […] by only having one client"? – marktristan May 13 '16 at 11:20
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    There is no UK laws that prohibit you from working weekends or more than set amount of hours. Only remotely close thing that exists is that employee must give a written consent if he agrees to work more than 40 hours/week for a single company. And there is absolutely no need for some tax specialist in simple case like that, you just have to send out invoices and then pay taxes on income from them accordingly. – Tymoteusz Paul May 13 '16 at 11:38
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    @TymoteuszPaul The Working Time Directive says no more than 48/hours week (not 40 if you're over 18), averaged over 17 weeks, across all employment - but, importantly, there's no "for a single company" limit, so (eg) working 30 hours/week for two different employers would definitely trigger this. You're correct that you can choose to opt out with a written consent, though. – Andrew May 13 '16 at 12:00
  • @Andrew I stand corrected then, and admittedly did not check that with proper diligence due to the opt-out option. – Tymoteusz Paul May 13 '16 at 12:01
  • @marktristan Only this Workplace.SE link – Alexander May 13 '16 at 12:20
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You will need to create some form of legal entity through which you will account this job. If this is as simple as you describe - just working for someone else in different country then sole trader seems like the appropriate choice for you. It will also make running the accounts relatively straightforward. But you will have to do the accounts and pay taxes on the income yourself.

I would also re-read your existing contract whether you are allowed to take side jobs (it may be either prohibiting you from moonlighting altogether or there may be no-compete clause). If there is nothing there that prohibits you from working elsewhere then your time is for you to use in any way you please. With that in mind, I see no reason to hide it from your current boss, he may even offer to buy those hours from you at some reasonable rate.

  • Thanks for your comments. I am contracted to work with a company in New Zealand that is a registered limited company. Is the sole trader the correct choice to go for as it says about working for myself when I'm working for another company? I guess keeping track of all income and filing a self assessment tax soon before the 2017-2018 tax year would be the best bet? – MacMac May 16 '16 at 7:30
  • @MacMac when you are a sole trader (or any other entity really) it makes little difference for who you are working. From your end all you do is send them an invoice and then tax the income accordingly to entity of your choosing. Sole trader is by far the easiest option as far as legalities go, as all you have to do is register as self employed and then just pay tax on what you make. It's pretty well explained for example here: bytestart.co.uk/sole-trader-tax-guide.html or on gov websites. – Tymoteusz Paul May 16 '16 at 8:47
  • I see. I will be getting paid by the hour from the NZ company every calendar month, do I have to work out the taxes after every pay or wait until I file self-assessment tax return and my taxes will be paid from there? – MacMac May 16 '16 at 9:18
  • @MacMac taxes paid via self assesment are done twice a year: by january and july. On both occasion you pay half of the tax owed. Subsequently with your yearly tax-return you will either have to make a top up payment (the less common scenario) or apply for a refund if you've overpaid (for example due to business expenses). As I said before all this information is available online and you will have to read up on it as there is a bit more to that. Alternatively you can hire an accountant to do your fillings every year, which is not a very expensive service. – Tymoteusz Paul May 16 '16 at 9:24

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