Freelance Tax Returns - Do I need to declare

Commandante

Hello all,

I've never done any self assessment before so i'd appreciate some help.

I work in full time consultancy, with a standard salary dealt with by my employer. I also get a car allowance and a bonus via them (i dont know if these are taxable or not).

In the last few months I've been helping a friend with some freelance work, for which he has paid me £2k in January, and I expect to receive another £3k by March/April.

Do I need to complete a self assessment form for this?

Realistically, what happens if I don't?

InsideInsurance

You are self employed and so you must have registered yourself as such. This will trigger you needing to deal with NI Class 2 and getting a self assessment form.

If you don't and you're caught then there are fines, interest and the tax, it is rare that they try and prosecute people for tax avoidance. The risk is presumable relatively low but your friend presumably will want invoices, will have you down as a supplier to be able to knock off the £5k from their tax liabilities and so it is certainly not impossible that HMRC would find out.

Declaring yourself self employed will not be visible to your employer but have you checked to see if youre allowed to do this kind of freelance work whilst working for your employer? Again, is £5k work the risk?

Notmyrealname

Commandante wrote: »

In the last few months I've been helping a friend with some freelance work, for which he has paid me £2k in January, and I expect to receive another £3k by March/April.

Do I need to complete a self assessment form for this?

Yes, you need to register for self assessment.

Realistically, what happens if I don't?

You are committing tax evasion which is a go to court and go to prison offence.

Notmyrealname

InsideInsurance wrote: »

, it is rare that they try and prosecute people for tax avoidance.

I hope so because tax avoidance is legal. Tax EVASION isn't.

InsideInsurance

well, you have legitimate tax avoidance and non-legitimate - should have used the word evasion

Savvy_Sue

Commandante wrote: »

In the last few months I've been helping a friend with some freelance work, for which he has paid me £2k in January, and I expect to receive another £3k by March/April.

Do I need to complete a self assessment form for this?

Yes, you need to do a self-assessment, BUT the good news is that you don't need to do it today, because that deadline is for income for the tax year which ended in April 2011.

Register as self-employed now - you can do it online from the HMRC website, I think, but if you need to phone I'd leave it a week (until the latest filing deadline has passed).

You may be fined for late notification of your self-employed status.

steve1980

http://www.hmrc.gov.uk/selfemployed/index.shtml

billsavings

Useful place to post tax matters. http://forums.moneysavingexpert.com/forumdisplay.php?f=22

withabix

Commandante wrote: »

Hello all,

I've never done any self assessment before so i'd appreciate some help.

I work in full time consultancy, with a standard salary dealt with by my employer. I also get a car allowance and a bonus via them (i dont know if these are taxable or not).

In the last few months I've been helping a friend with some freelance work, for which he has paid me £2k in January, and I expect to receive another £3k by March/April.

Do I need to complete a self assessment form for this?

Realistically, what happens if I don't?

Car allowance and bonus are taxable as normal income.

You need to do a Self Assessment next year.

Commandante

Thanks all. I didn't realise it needs to be done next year, so thats useful.

Nor did I realise I need to register myself as self-employed, given that i'm also in full-time employment. And yes, I talked it through with my main employers and they're happy as long as theres no conflicts.

InsideInsurance

You need to the registation ASAP as their are fines for not registering in time but it is a simple phone call to do it