In this section:
- Tax for the employed
- Tax for the self-employed
- Work out if you're employed or self-employed
- Starting your first job: what to do about tax
- Tax on casual, part-time or temporary work
- PAYE forms: P45, P46, P60, P11D
- Tax on company cars and other benefits
- Tax on employee share schemes
- Tax on tips and bonuses
- Tax when employing people in your home
Tax on casual, part-time or temporary work
If you work part-time or on a casual or temporary basis you must pay Income Tax and National Insurance contributions (NICs) if you earn more than £6,035 per annum. This applies whether you are employed or self-employed.
If you work for an employer
If you're employed on a casual, temporary or part-time basis, by law your employer must:
- deduct tax and NICs from your wages
- give you payslips
- deduct student loan repayments, if relevant
- give you form P45 when you leave
- give you form P60 at the end of each tax year if you still work for the employer
What about cash in hand?
It's illegal for your employer to pay you cash in hand without deducting tax and NICs from your wages.
If you accept money in this way, you risk losing your employment rights and the right to some benefits, such as:
- maternity or paternity leave
- sick pay
- Jobseeker's Allowance
In addition you could end up having to pay the tax and NICs yourself.
If you suspect your employer of not paying tax or NICs on your wages you can report them in confidence using the Tax Evasion Hotline on Tel 0800 788 887.
PAYE forms: P45, P46, P60, P11D
Read about reporting tax fraud - on the Directgov website
If you work for more than one employer
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.
If you have more than one tax code
Employment rights
All employees have rights, whether they are full or part-time, casual or temporary, including:
- holiday pay
- National Minimum Wage
- protection from discrimination
If you're concerned about your rights, you can ask a union for help or get free advice from your local Citizens Advice Bureau.
Find your nearest Citizens Advice Bureau on the Citizens Advice Bureau website
If you're a student
If you're a student, you still pay tax on your income unless all of the following apply:
- you're a full time student in the UK, only working in the holidays
- you're returning to full time education after the holiday
- your total income for the year is below the Personal Allowance
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 £105 a week.
Find out more about tax for students
If you work for yourself
If you're self-employed on a temporary or part-time basis you must register with us 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 NICs 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.
Working for cash
You can accept cash payments for work you do, but it's illegal for you not to declare this on a tax return, and pay Income Tax and NICs if these are due. This will depend on your overall taxable income in the tax year.
Information from Business Link on how to register as self-employed
Checking your employment status
It's important to understand the difference between being employed and self-employed, as this affects how you pay tax and NICs. Read more in our related article.
Work out if you're employed or self-employed
Does how much you earn affect the tax you pay?
Everyone gets a personal tax-free allowance (£6,035 in 2008-09). You do not pay tax on anything you earn below this amount.
The National Insurance you pay also depends on your earnings. You do not pay any if you earn less than £105 a week.
Find out about National Insurance on the Directgov website
More useful links
Learn about your employment rights, looking for work and more on the Directgov website
Read more about work and work related issues on the Directgov website
