Doing a Self Assesment for my "Side Hustle"

[seanyc5]

Hi all,

So aside from my normal full-time employment, I jumped on the passive income/side hustle bandwagon last year.

It's not a lot at all I'm still calculating things.

I have done S.A before but was self-employed then.

Now that I am employed full time, is the process the same to fill out the S.A on my "extra" income.

I am sure most would not even bother, and the thought has crossed my mind.

Are you still able to earn £1000(gross) on top of your normal job? without having to declare it, that's what it looks like to me anyway.


About £250 of the profit is actually from mining!

Just thought I would ask for some tips.

 

[seanyc5]

Second job you mean?

In the eyes of HMRC yeah I suppose. In reality, it's just a website that gets maybe 1 hour a week of my time along with mining that gets 0h of my time haha so I would hardly define it as a second job, but I know what you mean.

 

[seanyc5]

As I understand it mining profit is classed as income at the price it was worth at the time. Say £200 worth of BTC you would pay the tax on. If that £200 then grew to over the CGT limit of £12,300 then you would also have to pay tax on the gains over the allowance.

Buying and trading coins would be classed as capital gains. I think its safe to say most of us wont be over the £12,300 limit anyway unless we get lucky or put some pretty decent capital in to start with!

 

[seanyc5]

There’s a few on here who have had notable gains from crypto, I wonder if/how they declared the earnings...

Yeah I think its safe to say most wont haha. I supposed it depends on where the coins are held etc. with KYC and all that. I read that coinbase will let HMRC know of any gains above £5000 even though that's well under the allowance. I am not sure how true that is but still, I would not be surprised if the big exchanges did this to comply as much as possible and not pee anyone off who potentially has the power to shut them down.

EDIT - Currently all my mining profits from Nicehash are being sent straight to Block-Fi, so I'm just keeping it, none is being converted into FIAT not that it matters in the eyes of HMRC.

 

[seanyc5]

Since you are constantly mining, how do you determine "price at the time" and how much do you measure? like per 1 BTC or per 1/10000 BTC?

Like take an Artist as an example, if Picasso paints something. His work sold is subject to income tax in its entirety at the time of sale surely. Not the value of the painting the second the last drop of paint hits the canvas and then Capital Gains from then to 20 years thereafter.

Right?

I think it should be done from the time you actually get a payout. Like 0.001BTC in Nishash for instance. I have made a note of all the payments I got from nicehash, typically it's around £40 at the current BTC price for each 0.001BTC minimum payout.

In your painting example, the artwork does not have a value until it is sold first time around. Once a dealer gets a nice dinner and a backhander, they may value it at £1 million, but it is surely worthless until the moment it is sold? Perhaps it's a bad analogy as art is a very unique asset class.

If someone pays £1million then the tax is paid on that. The new owner would then be subject to capital gains on the next sale I think that's how it works anyway.

I may be totally wrong though haha. All I know is high end art is just a place for people to park large sums of money and hide it lol




This is what I found

"If you’re mining coins as a hobby, then any coins you receive as a result of your mining will be added to your taxable income, using their value at the time you received them (minus any reasonable deductions)"