Do I pay Income Tax / National Insurance?

rdshelmerdine

For a while this year I had a job inbetween being on JobSeekers allowance for long periods. Now, I'm earning money online doing a bit of article writing but it's not much (£30-40/week) which is enough to get me by at the moment. I'm 21 and live with my Gran and take care of her as she's ill so don't need tonnes of money. I'm basically debt free, rent is free and I just have to buy food.

I'm never going to earn the £6000 or whatever it is this year where I have to pay income tax. Is this right? Do I have to pay National Insurance Contributions? And if so, how would I go about doing these things?

Thank you

[Deleted User]

have you told the dwp you have an income?if so then you need to contact HMRC for advice on being self-employed,if you havent notified dwp then you must do so and contact HMRC

missbunbury

You'll need to do a self-assessment tax return at the end of the financial year, and you'll be taxed on the total income in that year, so what you earned from your job may be included. If you declare less than the threshold, you won't pay tax. N.I. is different, you pay that at a lower level, and if you don't pay it'll cause problems in future if you need to claim contribution-based benefits. It also goes towards your pension.

There's lots of good advice online about doing a self-assessment tax return; you will want to make sure you declare all relevant business costs otherwise you could end up paying too much tax. In your situation you probably won't be looking at loads of costs, but worth considering whether you have purchased any equipment to allow you to work. There's a use-of-home-as-office allowance too that may be relevant - if I were you I'd start with the HMRC website. Alternatively, I'm sure other self-employed people will be along with good advice.

themull1

If you earn under £5075 after expenses you can claim small earnings exception, you will not get credits towards your pension if you don't pay the contributions tho!