Tax and Freelance Work

CrabCrust · 18 Jan 2019 at 13:58

I am currently employed by a company and take in approx 21k per year before tax.

I also do odd bit of graphic work on the side but it's getting to a point where I am starting to get a bit concerned regarding tax. I know nothing about it.

Basically it used to be some odd jobs that I was paid about £15 but recently a few more jobs are coming in and the payments are starting to increase as they are more time consuming. the person who is giving me the work is paying me by Paypal gift. So far this year I've taken in about £700.

I'll be honest and admit that the both of us would like to officially start it up as a business but I'd be down as someone who just takes on freelance work.

I hope that makes sense and I hope someone can assist.

touch · 18 Jan 2019 at 14:01

You don't need to start a business for this, just complete a self-assessment tax form declaring the money you've earned.

(Also, it doesn't matter if they paid you by paypal gift, you still need to declare that income)

Martynt74 · 18 Jan 2019 at 14:27

I think you can earn under £1000 and not declare it. So you should be ok at the moment. Otherwise if it's growing do as above.

@Pudney can probably advise.

Pudney · 18 Jan 2019 at 18:25

touch said:
You don't need to start a business for this, just complete a self-assessment tax form declaring the money you've earned.

(Also, it doesn't matter if they paid you by paypal gift, you still need to declare that income)

Strictly a business in the tax world is something done with a view to generating a profit that's more than a profit. So arguably the OP is already operating a business.

Marvt74 said:
I think you can earn under £1000 and not declare it. So you should be ok at the moment. Otherwise if it's growing do as above.

@Pudney can probably advise.

I feel I should stop talking about tax on this forum...

But yes, if the OP's only sources of income are PAYE and this business, as long as gross receipts stay below £1,000 there is no need to inform or declare the information to HMRC. Records should still be kept to support this though.

If other non-taxed income is received or receipts exceed £1,000 then it will likely need reporting to HMRC.

englishpremier · 18 Jan 2019 at 18:34

Under the Trading Allowance you can earn up to £1000 tax free without any need to declare it. You cannot deduct costs. If you earn more than that amount you will need to fill out a self assessment. https://moneysavinganswers.com/personal/tax/new-digital-trading-allowance/

If you earn up to £3000 a year, you can have the tax collected via your day job's PAYE. Still need to fill out a self assessment though.

Spook187 · 18 Jan 2019 at 21:10

Ask for cash in hand= no tax, job done

ANDARIAL · 18 Jan 2019 at 21:21

Spook187 said:
Ask for cash in hand= no tax, job done

Man after my own heart

Meaker · 18 Jan 2019 at 22:19

Just got mine submitted a couple of days ago, it's not too difficult if you have the paperwork.

Silly me forgot to put in how much tax I had paid PAYE so the initial bill calculation (before I submitted) was something like £8000 with a pre-payment for next year. Much more sensible after I fixed it lol.

LeeUK · 19 Jan 2019 at 19:06

Spook187 said:
Ask for cash in hand= no tax, job done

Careful, you'll set off the "cash is bad & everything should be paid for by electronic means" brigade.