Paying tax on commision only earnings

Pinkpig74

Not sure if this the right place for this - I have searched and can find nothing similar.

I am about to start working a few hours a week on a commission only basis. I also have a full time PAYE job and expect to earn about £50-£100 a month in commission from my second job, although this isn't guaranteed and I can choose how much or how little I work.

Do I need to declare this income or not? Any help would be really appreciated as I've tried the IR website and cannot find any answers at all!

Thanks.

Aark

You do need to declare this income. Probably the best thing to do is to write to your tax office explaining what you do, tell them when you started and how much you expect to earn.

They should then advise you how they will go about collecting the tax, they may just adjust your tax code so you pay the tax on your commission income through PAYE on your full-time job.

Ian_W

Whilst I agree with Aark that you need to declare the income - or face the consequences when found out!! I'm not sure that paying it through PAYE is in your best interest as the earnings will, by the sound of it, be variable.

I assume the commission only earnings will be self-employed, can't see how it can be otherwise? You need to declare them on a SA form at the end of the tax year, if you don't get a form you'll need to ask for one, or get a PIN and do it online.

So if you start earning now you don't need to fill in a tax return until 6/4/06 and can return it as late as Jan 2007. You'll then be required to pay tax in Jan/July each year on your self-employed earnings which means you get to keep the money longer [and earn interest] than if it were arranged through PAYE.

ctm_2

Ian_W wrote:

Whilst I agree with Aark that you need to declare the income - or face the consequences when found out!! I'm not sure that paying it through PAYE is in your best interest as the earnings will, by the sound of it, be variable.

I assume the commission only earnings will be self-employed, can't see how it can be otherwise? You need to declare them on a SA form at the end of the tax year, if you don't get a form you'll need to ask for one, or get a PIN and do it online.

So if you start earning now you don't need to fill in a tax return until 6/4/06 and can return it as late as Jan 2007. You'll then be required to pay tax in Jan/July each year on your self-employed earnings which means you get to keep the money longer [and earn interest] than if it were arranged through PAYE.

Won't necessarially be made to complete a self assessment return. With a projected income of at most £1200 a year from this second source of income, it's far easier from both pinkpig and HMRC to shove the maximum expected amount in his code and at the end of each year pinkpig write in anc confirm the total amount received in the year for any further tax to be collected or any refund to be made.

Best bet is ring up or write to HMRC and come to some agreement with them.

ioscorpio

Why don't you wait and see if you like the job first, you might hate it on your first day.

lestamunda

wait and see if you like it, but definitely declare it to the Inland Revenue.

otherwise it is an offence - tax evasion!!!!!!!!!

sarahlouise210

ctm wrote:

Won't necessarially be made to complete a self assessment return. With a projected income of at most £1200 a year from this second source of income, it's far easier from both pinkpig and HMRC to shove the maximum expected amount in his code and at the end of each year pinkpig write in anc confirm the total amount received in the year for any further tax to be collected or any refund to be made.

Best bet is ring up or write to HMRC and come to some agreement with them.

In theory..yes it is easier..but..what happens on the months that he does not earn any commision but pays tax on that commission he has not earned through his PAYE code ???? I would not be happy about paying tax on an estimated £100 per month if in that month I did not earn any commission(that month there would be no commission plus an extra £22.00 deducted via PAYE for no reason) Although the commission is small it is still a good option to fill in a return and pay the correct tax at the end of the year- unless of course the PAYE job pays enough that you dont mind paying tax on the commission whether you receive it or not. I think it is good advice to wait and see if you like the job..many commission only jobs are short lived.If you then stop the work you will have an actual figure that can be placed in your tax code.

Pinkpig74

Thanks to everyone that responded - I think I'll take the advice and wait to see if I like the work first. But will definately speak to HMRC to what they think is best.

You've all been really helpful...just as I expected!