Tax on a 'cash in hand' job

Gar_2

Hi Guys,
I've read the forum for quite some time, just never posted.
Basically this christmas I've been offered a job playing in a group as the person who usually plays with them is unavailable over the christmas peroid. Come January he'll be back.
Whats the limit i can claim without declaring Tax?
I already have a 'regular 9-5' job would i have to declare everything i own with them, It's a good pay day so to speak with this band, and playing with them would ensure I'd hit the new year debt free (first time in years)
I want to take the job, but need to way up if its worth the time out of the house away from the family over christmas and new year.

Thanks
G

PlutoinCapricorn

Assuming that your main job has taken care of your personal allowance, and that you are not anywhere near the 40% rate, then you should pay tax at 20% on the extra job. Only you can decide whether it is worth sacrificing your time for: it depends on your priorities. Starting 2010 debt free sounds like a good idea to me.

Gar_2

i thought there was a limit on 'extra income' to what you could earn, isnt it like £4.5k or something?
the fee for the months work would come under that so I thought i'd be safe to just stick it in the bank and pay off the CC and over draught, and would have a little left to put towards a holiday

jem16

Gar wrote: »

i thought there was a limit on 'extra income' to what you could earn, isnt it like £4.5k or something?

There is no such thing. All income is taxable.

As the previous poster has said you will need to pay 20% tax on all of it, assuming you are not a higher rate taxpayer.

Gar_2

thanks for the info guys....
whats the process for declaring it all?

C_Mababejive

Put the money in your pocket and just thiking of the banking crisis and big city bonuses. A few extra quid for you and your family at Christmas is more important than funding gthe scoundrels at the treasury.

jem16

Gar wrote: »

thanks for the info guys....
whats the process for declaring it all?

Phone up HMRC and say you have extra untaxed income to declare.

C_Mababejive wrote: »

Put the money in your pocket and just thiking of the banking crisis and big city bonuses. A few extra quid for you and your family at Christmas is more important than funding gthe scoundrels at the treasury.

Bad move. You would be committing tax evasion and therefore fraud.

Don't land yourself in trouble.

PlutoinCapricorn

Perhaps you are thinking of National Insurance: there is a limit of around £5,075 (changes every year, was £4,825) and if you earn less than that you don't need to pay NI.

If you are earning more than £6475 or so in your main job, then you have used up your personal allowance and are definitely liable to 20% of your extra earnings.

HMRC know all about people who may be paid cash, I would not like to live with the continual fear that they might catch up with me if I didn't declare extra income.

dave4545454

a lot of semi pro bands that play local pubs n clubs don't pay any tax on money they earn for it as it's cash in hand.


but if you do want to be legit and pay tax on the money you earn, don't forget that you can claim a lot of back for expenses like money for car petrol to get to gigs and music equipment such as new strings and instruments.

PlutoinCapricorn

Gar, do you think that this will definitely be a one-off? Perhaps it depends on how it goes.

You can approach HMRC and tell them that you have some additional income to declare, but so far as you know it will be just the once, so there is no need to become self-employed. As you will be earning in FY 2009/10, you may not need to pay the tax until late in 2010.

However, if you plan to make a habit of playing, then setting up as a sole trader may eventually be necessary.

Gar_2

This is defo a one-off for me. the style and type of music isnt something i enjoy playing, it's purely for the money.
I did think about just pocketing the cash but, I need too bank it to pay off the CC. It's not a great deal, but I'm sure a flag or two would be raised if I suddenly pay in the best part of £1500 cash.