Do we need to declare our extra earnings?

[Toppoll]

In order to make a bit of extra cash, my husband and I rent 3 vending machines out to two offices where we each work.

We pay VAT on the rental fee to the guy who we loan the machines from, but choose not to charge any rent to the offices where the machines are located. We were under the impression that as we were personally 'absorbing' these fees ourselves there would be no need to declare this to HMRC.

We pay for our own stock which we purchase from Bargain Stores and then recoup any income

We did not think we would need to declare this as we receive no benefits and are both in work with an income of circa 45k to the household.

In light of the recent news about the couple who sold at car boot sales being prosecuted, we would like some advice as to whether we need to declare this extra income anywhere?

We pay 56 pounds pw rent on 3 machines and are recouping approx 130 pounds pw.

Thanks

[VfM4meplse]

Originally Posted by Toppoll

We did not think we would need to declare this as we receive no benefits and are both in work with an income of circa 45k to the household.

If it's income, it needs to be declared.

May I be the first to welcome you to the world of self-assessment .

[Toppoll]

If that is the case, would you advise we just do it as Joe Public or would it be more advantageous to start up a Partnership or Limited company for any perks, as we are looking to purchase a machine in the near future to avoid the weekly rental fees.

Thanks

[billsavings]

How long have you been trading ?

[Toppoll]

Its been 11 months at the end of July

[soolin]

Originally Posted by Toppoll

Its been 11 months at the end of July

Ouch, you may well find you have fines and penalty charges to pay- it might be worth talking to an acccountant.

[simplydevine05]

Get an accountant as you should have declared it 8 months ago and don't set up as a limited company as for what you are doing there would be no perks. A partnership may be good though as you can split the profit in half between you. If you both already work then you extra income is likely to be due tax on it so be prepared to grovel to the tax man because they don't take kindly to tax avoidance. If you are on benefits then you will need to get grovelling to them too as you will have been paid too much. Sorry to sound harsh but as someone who is self employed I don't like when people think they can earn extra money and not pay tax or still get paid by the government.

[shmeeko69]

Originally Posted by Toppoll

In order to make a bit of extra cash, my husband and I rent 3 vending machines out to two offices where we each work.

We pay VAT on the rental fee to the guy who we loan the machines from, but choose not to charge any rent to the offices where the machines are located. We were under the impression that as we were personally 'absorbing' these fees ourselves there would be no need to declare this to HMRC.

We pay for our own stock which we purchase from Bargain Stores and then recoup any income

We did not think we would need to declare this as we receive no benefits and are both in work with an income of circa 45k to the household.

In light of the recent news about the couple who sold at car boot sales being prosecuted, we would like some advice as to whether we need to declare this extra income anywhere?

We pay 56 pounds pw rent on 3 machines and are recouping approx 130 pounds pw.

Thanks

Any extra income that you're bringing in has to be declared or you will eventually get a nasty surprise letter or even visit from the taxman. He always has to be paid regardless of what you're doing or it could come back and haunt you in the long run.

[Toppoll]

Thank you all for your advice. It certainly hasn't been a deliberate attempt to fleece the taxman or to do anything wrong. It's just been a genuine attempt to see how successful it would be and whether or not it would be worthwhile.

I've been in touch with a friend who knows an accountant, and we'll be looking to officially make it a sideline business.