Part Time Freelancing - National Insurance Exemption

Question

I have created an app that I want to sell on the Google play store. I have created free apps before, but for selling one you need a merchant account; for that I need to register as a sole trader.

I am not planning on making a large amount of money off the app, probably less than £500 a year (I work full time and plan on doing this and a bit of freelancing on the side). I understand I must pay tax on all my profits, however as my income from freelancing will be less than the National Insurance Class 2 threshold of £5,965 will I have to pay national insurance on it?

Answer 1

Your National Insurance contributions is calculated on total taxable income. The source of the taxable income is irrelevant - thus I suspect its likely you'll have to contribute more National Insurance, though I also suspect its so small that its not worth worrying about.

Call your local tax office and ask them - I've had a UK Limited Company in the UK for 20+ years and have had to call on them over the years (meaning they are human and not out to trick you).

Alternatively, the UK Government website calculator might help: https://www.gov.uk/government/collections/how-to-manually-check-your-payroll-calculations

Best of luck...

Answer 2

Disclaimer, I am not an accountant

Yes you will have to. The reason for this is that your self assessment will also take into account your wages from your full time position. I have found this website

http://www.brighton-accountants.com/blog/tax-self-employment-still-employed/

"Your tax-free Personal Allowance usually gets allocated to your employment, so the tax on your self-employment will be at your own highest tax rate. If your total income is below £41,865, the tax on your self-employed income will be 20%, but any income over £41,865 will be taxed at the higher rate of 40% (income above £150,000 may be taxed at 45%)."