Small amount of extra cash...

*Summertime*

Please can you guys help.

My hubby is a landscape gardener on £23k per year.

He is doing a few small jobs on Sundays and will make approx £2400 extra per year. How does this work with tax-I read that you lump it together and that still wouldn't be over the threshold for 40% so it is taxed at 20%?

If so, would we need to see a solicitor for a tax return or is it fairly simple to do?

Is it worth keeping back and saving 20% of each job to save us taking a bigger hit all in one go when the tax is due?

Thank you

John_Pierpoint

Is husband employed during the working week as a gardener (perhaps employed by the local council, or the owner of the local stately home?) or is he self employed with several existing customers?
His Sunday job presumably with more than one customer, is a self employment business.
Strictly speaking he should register as self employed and then apply for exemption from class 2 National Insurance because his self employment earnings are below the threshold.
This registering will trigger a Self Assessment tax return each year. It can be completed on-line at the local library if you do not have your own computer with a fast enough broadband connection.

http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073875654

How long has he been doing his "Sunday" work?

[There are penalties for not registering promptly so it is best for you to make contact and get the situation regularised, rather than eventually some customer claims the money paid to your husband as a business expense, or some envious colleague "shops" him.]

You don't need a solicitor or an accountant if you are prepared to read up on being self employed, he will be able to deduct any expenses before being charged tax on the remaining profit. (That helps keep a car on the road) - though there could be an issue over insurance:
Hubby is pruning a tree. Customer's toddler runs underneath just in time to be killed by the falling branch. What happens next?

heretolearn_2

Yes it would still come under the 20% bracket - on his profit not on his earnings, and it is wise to put some money aside. The issue of insurance is an important one, and registering with HMRC as self employed.

Solicitors have nothing to do with tax returns. Accountants do. It's up to you whether to use one or not, usually they can save you more in tax than they charge in fees (if you get a good one) but it's not that hard to do a basic one yourself.

John_Pierpoint

On a profit of less than 2,400 and a maximum tax of less than 480 there is not a lot of scope for making a profit out of the accountants fees:D.

Now if husban was to start buying his own lawn mowers (say) and a tractor to pull them, then an accountant would be useful - as against reading up on the advice given on this forum.

heretolearn_2

True, but a savvy accountant, by bringing in all the relevant expenses allowable, could well make this a 'loss' the first year, thereby gaining the client a tax refund instead of a tax bill, which results in a better situation overall even with a couple of hundred quid fees.