Small business income via Paypal - Paying tax question

PrincessJR

Hi,

I am in the process of setting up a small business as a side line to my full time job. I offer counselling services which customers can order and pay for on my website. As I can only really work on the counselling in my spare time, I don't really make very much money from it, but am hoping it will grow over time.

Anyway, my question is: How do I go about paying income tax on the money I make through Paypal?

Some months I can make between £200-£400 and other months it can be £0.
Because its so varied how would I make sure Im paying the right amount of tax?
I dont want to get into trouble so would like to get on top of this asap but over a whole year I probably only make £1000.

Any advice appreciated

pitkin2020

If you are already running as a business then you need to register with HMRC as self employed NOW.
Basic version:
You'll pay tax on all your profits as you have a full time job which I presume you have PAYE. You need to record all your expenses and your incomings to be left with your profit. You'll need to complete a tax return at the end of the tax year and pay your taxes...simples.

It would be a good idea to put 25% of your profits into a nice ISA ready to pay the tax bill with.

trills

As above, you need to register as self employed with HMRC.

All the details for self assessment are on their website here:
http://www.hmrc.gov.uk/sa/your-tax-return.htm

For more info on self employment and general business tips, Business Link is good:
http://www.businesslink.gov.uk

heretolearn_2

You know how much tax to pay because you know what your profit was for the year (at least you should if you keep records of your income and expenditure).