Confused, help!!

Purple_haze_5

Hi

I have a full time job where my income tax is paid PAYE and I am thinking of starting as a Reiki practitioner in my spare time. Could anyone advise where I stand with regard to income from this or the best place to find out.

Any advise gratefully received.

Many thanks

Debt_Free_Chick

Purple_haze wrote:

Hi

I have a full time job where my income tax is paid PAYE and I am thinking of starting as a Reiki practitioner in my spare time. Could anyone advise where I stand with regard to income from this or the best place to find out.

Any advise gratefully received.

Many thanks

You will probably need to register as self employed and then pay tax & NIC separately for this income. I say "probably" as it really depends on what you are likely to earn. I think there's an exemption for earnings from a hobby - but the limit for that is about £800 p.a. Anyway, if you are serious about running this as a business, you should register as self employed to be on the safe side.

Keep accounting records from day one. This need only be a note of all the expenses you incur in setting up and running your business and all the income you receive, from clients.

At the end of the year* you need to prepare accounts for the business. The year is the business year and there can be a slight timing advantage in the payment of tax if the year does NOT end on 5 April. However, simply for convenience, you might want to have your business year running from 6 April to 5 April, to make your tax return easier.

HTH

Purple_haze_5

Thanks for the advice and sorry if this is a stupid question but if I registered as self employed would that just be for the Reiki Practice? Would my main income tax still be paid as PAYE?

If I registered as self employed would I pay tax on everything I earned from Reiki or would it be on profit, after expenses?

Many thanks

Debt_Free_Chick

Purple_haze wrote:

Thanks for the advice and sorry if this is a stupid question but if I registered as self employed would that just be for the Reiki Practice? Would my main income tax still be paid as PAYE?

Not a stupid question - it's a good one I've never thought of before Self employment would just apply to the Reiki practice. Your main income would still be taxed via PAYE.

If I registered as self employed would I pay tax on everything I earned from Reiki or would it be on profit, after expenses?

Many thanks

On profit after allowable expenses (most are allowable) - which is why it's important to keep records.

Purple_haze_5

Thanks for your advice.

Liz

tyllwyd

Once you have registered as self-employed, they will send you a tax return to fill in (expect it to arrive in the following April/May). There are various different sections to complete, so you will need to complete the employment pages with details of your earnings and the PAYE tax you have already paid, and the self-employment pages. They can then take into account what you've already paid when they calculate your tax from your self-employment.