If you work part-time or on a casual or temporary basis you usually pay Income Tax and National Insurance contributions if you earn more than a certain amount each year. This applies whether you are employed or self-employed.
On this page:
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 Tel 0800 788 887. Lines are open Monday to Friday 8.00 am to 6.00 pm and are normally less busy before 9.00 am.
Tax and National Insurance for the employed
PAYE forms: P45, P46, P60, P11D
Read about reporting tax fraud - on the Directgov website (Opens new window)
Find out more about how to report tax fraud
If you work for more than one employer, you'll get a special tax code to take this into account.
Your tax allowances - amounts that you can get to reduce your tax bill - will normally be given against the pay from your main job. Your other job(s) will be taxed at the basic, higher or additional rate, depending on your total income.
Tax and National Insurance for the employed
If you have more than one tax code
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.
Find your nearest Citizens Advice Bureau on the Citizens Advice Bureau website (Opens new window)
If you're a pensioner, you don't need to pay National Insurance contributions on any earnings you receive but you may still need to pay Income Tax - follow the links below to find out more.
Do you have to pay tax in retirement?
Making sure you've stopped paying National Insurance
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 £139 a week.
Find out more about tax for students - on the Directgov web site (Opens new window)
If you're self-employed on a temporary or part-time basis you must register for tax and National Insurance contributions with HM Revenue & Customs as soon as you 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.
Tax and National Insurance for the self-employed
Registering for Self Assessment and getting a tax return
You can accept cash payments for work you do, but it's illegal for you not to declare this on a tax return, and you must pay Income Tax and National Insurance contributions if these are due. This will depend on your overall taxable income in the tax year.
Tax and National Insurance for the self-employed
It's important to understand the difference between being employed and self-employed, as this affects how you pay tax and National Insurance contributions. Read more in HMRC's related article.
Work out if you're employed or self-employed
You stop paying Class 2 National Insurance contributions as soon as you reach State Pension age and Class 4 contributions from the start of the tax year after the one in which you reach State Pension age. But you may still need to pay Income Tax.
Making sure you've stopped paying National Insurance
Do you have to pay tax in retirement?
Everyone gets a personal tax-free allowance (basic Personal Allowance is £7,475 in 2011-12). You do not pay tax on anything you earn below this amount.
The National Insurance you pay depends on your earnings or profits and whether you've reached State Pension age. If you're an employee, you do not pay any if you earn less than £139 a week. If you're self-employed, you may not have to pay Class 2 National Insurance contributions if you qualify for a Small Earnings Exception where your profits for the year are expected to be less than £5,315 for 2011-12. Class 4 National Insurance contributions will only be due if your profits exceed £7,225 in 2011-12. If you're a pensioner, you don't have to pay National Insurance contributions.
National Insurance - the basics
National Insurance contributions Class 2
National Insurance contributions Class 4
Do you have to pay tax in retirement?
Read more about work and work related issues on the Directgov website (Opens new window)
