If you work part-time or on a casual or temporary basis you must pay Income Tax and National Insurance contributions if you earn more than £6,475 per annum. This applies whether you are employed or self-employed.
If you're employed on a casual, temporary or part-time basis by law your employer must:
It's illegal for your employer to pay you cash in hand without deducting tax and National Insurance contributions from your wages.
If you accept money in this way, you risk losing your employment rights and the right to some benefits, such as:
In addition you could end up having to pay the tax and National Insurance contributions yourself.
If you suspect your employer of not paying tax or National Insurance contributions on your wages you can report them in confidence using the Tax Evasion Hotline on 0800 788 887.
If you work for more than one employer, you'll get a special tax code to take this into account.
Your tax allowances will normally be given against the pay from your main job. Your other job(s) will be taxed at the basic or higher rate, depending on your total income.
All employees have rights, whether they are full or part-time, casual or temporary, including:
If you're concerned about your rights, you can ask a union for help or get free advice from your local Citizens Advice Bureau.
If you're a student, you still pay tax on your income unless all of the following apply:
Ask your employer for form P38S Student Employees - and tax won't be deducted from your earnings. National Insurance will still be deducted if you earn more than £110 a week.
If you're self-employed on a temporary or part-time basis you must register with HMRC as self-employed within three months of when you first start work. You'll have to complete a Self Assessment tax return and are responsible for paying your own tax and National Insurance contributions on the income you earn.
Even if you don't think you'll earn enough to need to pay tax, you still need to complete a tax return.
You can accept cash payments for work you do, but it's illegal for you not to declare this on a Self Assessment tax return, and pay Income Tax and National Insurance contributions if these are due. This will depend on your overall taxable income in the tax year.
It's important to understand the difference between being employed and self-employed, as this affects how you pay tax and National Insurance contributions.
Everyone gets a personal tax-free allowance (£6,475 in 2009-2010). You don't pay tax on anything you earn below this amount.
The National Insurance you pay also depends on your earnings. You don't pay any National Insurance if you earn less than £110 a week.