Paying Tax on Extra Income

Chinkle

As has been stated, if you earn ANY extra income you need to declare it. Equally, you need to declare yourself as self-employed.

Better to do so now, rather than be caught later and have the taxman crawling all over your financial dealings. It's pretty easy for them to find you because payment for your services comes out of someone else's pocket and they will be declaring that as an expense for their business.

The good thing about being self-employed is you can be more tax efficient that someone who is PAYE. Get yourself a good accountant and they'll explain how to make the most of your second income.

Jay1b

Chinkle thanks for actually making a helpful reply, although thats exactly what I was thinking.

Although most people on this forum are always polite and helpful, there always seems to be a few that are happy to criterise other people but are unlikely to follow their own advice if they were in the same situation. I can't imagine many people declaring an extra £200 income. Would you declare any profit on selling your car for more than you paid for it? I doubt it!

zygurat789

Jay1b wrote: »

Chinkle thanks for actually making a helpful reply, although thats exactly what I was thinking.

Although most people on this forum are always polite and helpful, there always seems to be a few that are happy to criterise other people but are unlikely to follow their own advice if they were in the same situation. I can't imagine many people declaring an extra £200 income. Would you declare any profit on selling your car for more than you paid for it? I doubt it!

That's not declarable income and it's not taxable, unless you have been claiming capital allowances on it.

Jay1b

hezitate wrote: »

QUOTE]

Reported as spam...

tyllwyd

This is a what Martin's uncle (or whoever he is said in 2005) - look at casual earnings - the figures are obviously out of date but I guess the principle wouldn't have changed.
http://www.moneysavingexpert.com/family/tax-questions-answered

Chinkle

Selling personal possessions isn't declarable for tax, neither for example is making a profit on selling your main residence, neither are lottery winnings. But earnings from employment are - if you only earn £200 this tax year then just write to the tax office at the end of the year to declare it. If however, this is an ongoing additional source of income then as I suggested get it set up in the right way.

RayWolfe

Jay1b wrote: »

there always seems to be a few that are happy to criterise other people

If you don't want to hear the answer, don't ask the question.
There are many people on here who don't know the law when they ask. You appear to know but still ask and then don't agree with the answer.

dori2o

Jay1b wrote: »

Hello

I'm currently in full time employment working in IT. I've also started doing some private website work.

As two extremes, if I were to earn an extra £200 per year from this, then I obviously wouldn't declare it. If I were to earn £50,000 per year from this (still as a side job), then I'd have to. At what point between the two figures would I need to declare it to avoid running into Inland Revenue problems further down the line?

Thanks

Jay

Then you are self employed and must register as a self employed person, regardless of the amount of profit/loss you make.

Failure to Notify penalties can and do get charged if you do not register within the required time frames.

Fire_Fox

Jay1b wrote: »

Chinkle thanks for actually making a helpful reply, although thats exactly what I was thinking.

Although most people on this forum are always polite and helpful, there always seems to be a few that are happy to criterise other people but are unlikely to follow their own advice if they were in the same situation. I can't imagine many people declaring an extra £200 income. Would you declare any profit on selling your car for more than you paid for it? I doubt it!

You are being advised that what you are suggesting is tax evasion and as such is an offence. That is a statement of fact not a criticism.

laticsforlife

Let's not also forget that if all you earned was £200, but had spent £300 on something that was allowable for tax (lets not get into what is and what is not), you would be able to set the £100 loss against your other income from employment and actually get a tax refund.

So register now and see where it runs - think of the good you are doing for this poor country in paying your dues - god knows we need it - there but for the grace of not being in the Euro goes the UK (following Greece)