Quick tax question for additional income

Darryl_1983 · 20 Mar 2015 at 16:28

I'm currently working full time and pay tax, NI and my student loan though PAYE. But over the last 7-8 months i've been doing some extra work for a friend to help him out and to gain a little more cash.

However i'm unsure of the best way to declare this and pay the required tax.

From a little research, It would seem the simplest route would be to fill out a tax return, resulting in me needing to pay 20% tax on the additional earnings and 9% towards my student loan. But nothing towards further NI.

Is this right?

ozaudio · 20 Mar 2015 at 17:52

why? if hes just paid you some cash in hand then why? you've already paid your share of tax and NI , don't you think we get screwed enough in this country?

awaits the crowd who live by the law and bendover for the government everyday....

£685 they took for tax and NI today from my wage I feel like ive bent over more than once just today alone

Sudden · 20 Mar 2015 at 18:04

ozaudio said:
why? if hes just paid you some cash in hand then why? you've already paid your share of tax and NI , don't you think we get screwed enough in this country?

awaits the crowd who live by the law and bendover for the government everyday....

£685 they took for tax and NI today from my wage I feel like ive bent over more than once just today alone

So your suggestion is to commit tax fraud...?

mattyfez · 20 Mar 2015 at 18:17

If it's cash in hand work as in just a bit of extra money on the side, I wouldn't declare it as all, as all it will do is cause you a headache with NI and income tax, and obviously cost you also.

If you are making a tidy amount, i.e enough to raise your standard of life considerably only then would I consider declaring it.

Psycho Sonny · 20 Mar 2015 at 18:24

mattyfez said:
If it's cash in hand work as in just a bit of extra money on the side, I wouldn't declare it as all, as all it will do is cause you a headache with NI and income tax, and obviously cost you also.

If you are making a tidy amount, i.e enough to raise your standard of life considerably only then would I consider declaring it.

so you would risk your current job as well as any future jobs by committing a crime for the sake of a few quid, but not for the sake of quite a lot of money?

e.g.

if you made an extra £200 you wouldn't declare it but if you made £200,000 you would?

Jokester · 20 Mar 2015 at 18:24

Well it is tax evasion, not even avoidance which even people seem to get their nickers in a twist about. How much are we actually talking about? I'm guessing 7-8months of work it's going to be a fairly substantial amount?

ozaudio · 20 Mar 2015 at 18:24

Sudden said:
So your suggestion is to commit tax fraud...?

yes, yes I am. then again the goverments Christmas party might get expensive this year so I guess you better pay up.

its not like he hasn't paid his tax and NI at all is it? he has. its a little on the side

now ill refer you back to my original post

awaits the crowd who live by the law and bendover for the government everyday....

Skeeter · 20 Mar 2015 at 18:28

Lol, tax. This thread will go well.

Psycho Sonny · 20 Mar 2015 at 18:30

ozaudio said:
yes, yes I am. then again the goverments Christmas party might get expensive this year so I guess you better pay up.

its not like he hasn't paid his tax and NI at all is it? he has. its a little on the side

now ill refer you back to my original post

awaits the crowd who live by the law and bendover for the government everyday....

There is nobody in this country who got rich on their own. Nobody. You built a factory out there - good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory... Now look. You built a factory and it turned into something terrific or a great idea - God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

mattyfez · 20 Mar 2015 at 18:30

Psycho Sonny said:
so you would risk your current job as well as any future jobs by committing a crime for the sake of a few quid, but not for the sake of quite a lot of money?

e.g.

if you made an extra £200 you wouldn't declare it but if you made £200,000 you would?

Basically yes, if it was say £50-£100 per month extra in cash there would be no way to prove it anyway.

If it's turning into a big earner, then you would have difficulty hiding it as you would want to be able to put it into the bank and that may raise suspicion if there are regular cash deposits.

OP doesn't say how much this extra work is giving him so it's hard to advise.

Judgeneo · 20 Mar 2015 at 18:33

What sort of numbers are we talking here?
I'd say:
< £500 total - don't bother
£500 - £1000 - let your conscious decide, I'd declare
£1000 and over - Declare for sure.

muon · 20 Mar 2015 at 18:36

Just do a tax return. Why do people think this is a massive pain?

It is very easy.

mattyfez · 20 Mar 2015 at 18:52

Because it's additional time spent on admin, and it will cost you more in tax.

Depends on the circumstances, if the 'side job' is regular and making decent money then I agree to declare it for peace of mind, if it's just a few quid here and there in cash, no point, just use the cash as pocket money.

Spook187 · 20 Mar 2015 at 19:06

Cash in hand don't worry about it, straight into the back pocket

Darryl_1983 · 20 Mar 2015 at 19:48

Sorry a little more information,

Everything is invoiced to him before he pays me, payment is made from his business account and recorded on his side for his tax.

Amount is currently between £4-5k. So I really do need to declare it and have no intention on not doing so.

mattyfez · 20 Mar 2015 at 19:54

In that case I agree, the fact it's recorded at his end and the amount involved then just for peace of mind if nothing else.

It may be worth setting up an LTD company with you as director as you'll be able to claim tax breaks for travel and food etc. on your earnings, but I'd suggest speaking to an accountant, many do free consultations and advice, and have cheap basic packages for small contractors, the cost of which you can also offset against your tax bill.

toasteh · 20 Mar 2015 at 19:56

yeah, that's a tax return job

Kemik · 20 Mar 2015 at 20:01

mattyfez said:
It may be worth setting up an LTD company with you as director as you'll be able to claim tax breaks for travel and food etc. on your earnings, but I'd suggest speaking to an accountant, many do free consultations and advice, and have cheap basic packages for small contractors, the cost of which you can also offset against your tax bill.

Now that is a lot of effort and, depending on the amount we're talking about, almost certainly more expensive in admin.

Maccapacca · 20 Mar 2015 at 20:03

Declare everything including the super super PC you need for that job. And the chair, desk, light bulbs, heating, electric, rent, mortgage, council tax, broadband, phone, mobile phone etc etc

mattyfez · 20 Mar 2015 at 20:08

Kemik said:
Now that is a lot of effort and, depending on the amount we're talking about, almost certainly more expensive in admin.

It depends, if his side job is 5k a year on top of his full time job and he only has one 'client' it's fairly simple, and the accountants fee is tax deductible, also he'll be able to claim an offset in business expense, petrol, computer equipment, mobile phone, other random costs involved with.

What I'm saying is that it's worth having a consultation with a number of accounting firms as they are free, so rather than just loosing 20% of earnings, he may only have to lose 5% or 10% after the accountants fee and various business expenses have been written off against his tax bill.

Quick tax question for additional income

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