Tax implications of offering private tuition?

jojo80_2

Good evening!

I've decided to spend one evening a week giving private music lessons (piano or woodwind) so I can try and save up as much as possible and clear my overdraft left over from uni days (some time ago now, but just can't clear it). I'm a qualified music teacher and CRB checked etc and I actually have 3 potential pupils lined up from just one ad I put in the newsagent, so I was quite pleased with that as a start.

My question is: I presume I need to declare this income and where do I begin? Do I have to keep a track of exactly how many lessons I've taught throughout the year and then declare it all at the end of the tax year and write the tax man a cheque? Or do they work it out for me and deduct it off my pay? Sorry if I'm asking ridiculously daft questions.

I gather from other music teacher friends that if you teach in your own home you can get tax relief off lighting and heating bills, but at the moment I would be planning on teaching in the pupil's own homes. Could I claim tax relief on my transport costs?

Thank you for any hints or tips or additional bits of advice!

Jo

paula7924

Call or go in to a tax office - they will help you with the paperwok you need to register as selfemployed and have guidelines on bookkeeping requirements and what you have to do with tax returns.

Simply stated though make a note of everything you do - what, where and when you get paid, and the costs of any direct and unavoidable expenses you have (plus keep the receipts). And yes you can claim for the motor costs of going to and from the lessons (based on actual mileage is easiest but you can do the percentage of actual costs based on business v personal if that is more beneficial)

The_Edible_Dormouse

The Musician's Union used to produce a very good free factsheet on what you could and couldn't claim as tax deductible. - I don't know if they still do, as Equity became a better bet for me with what I was doing. The ISM almost certainly do something similar.

For my private teaching, I keep a clear diary record along with studio costs, transport costs, and any other costs (I write it all down in my diary as it's easier to do my tax return at the end of the year!), and just declare it all on my tax return. I also like my pupils to pay by cheque, as if I DO forget one or two lessons, I can spot the same amounts going in on my bank statements.

If the amount of tax owed is below a certain amount (I can't remember what that is off the top of my head), you can elect to have it collected through PAYE, I believe.

But the tax office is your friend here - they are always very keen to help out, as it's less work for them in the long run!

And jojo80 - if you're in London, please PM me to let me know, as I'm often asked to recommend piano teachers!

Hazzo

Tax issues for the self employed can be very involved no matter how small the income and I reckon is largely beyond the scope of a general forum. The Tax Office offer great leaflets and free help so use them wherever possible and exercise common sense in how you do things. Appointment diaries are needed and keep your invoices (to your clients), and bills such as telephone, petrol, car insurance, road tax, car repairs, taxi/bus, postage, stationery, equipment puchases, memberships, (music) magazines, subscriptions, advertising - anything can be claimed proportionately - basically anything spent no matter how small that helps you to carry out your self employed work. Also, I suggest that you should register for online self assessment Tax Returns which can make life a whole lot easier for the part time self employed.

jojo80_2

thanks for those replies, I'll be popping into the tax office next week I think.

Sorry- I'm not in London- but I agree there does seem to be a shortage of piano teachers in my area too!

AntWal

The HM Revenue & Customs web site can answer most questions online http://www.hmrc.gov.uk. If you can't find the answer they also provide telephone advice too.