Paying tax on small earnings from freelance services?

danieljm

I've been considering starting up some small, affordable freelance IT services for personal customers and maybe small businesses in my area.

Services would include;
Mostly installation of computer hardware, software and peripherals.
Occasionally, data transfer for personal customers needing transfers of a small capacity (~5TB)
Possible barebones computer builds.
Basic computer cleanup

IT has always interested me and I've been studying it for well... years, and I feel I would be able to step it up a level, I would like to try and make some money out of it. I'm young, and I want to explore new things & anything that I may use in the future. Just to clarify, earnings would probably be very small and would only be used as a form of additional income, as I would also be working full time in a general job. No more than £1,000-£1,500 per annum or £100 per month would be a realistic figure as I would not want to dedicate a load of my time to it for a while.

Anyway, what are the rules on paying tax on small amounts? Are small freelance earnings taxable since I would be considering them 'personal & occasional services', how much would I have to earn to pay tax? Standard 20% tax?

thanks to anyone who can give a little advice

Lovelyjoolz

If you are earning more than £8,105 from your full time job, you will be required to pay tax on all your freelance earnings. You will need to register with HMRC as self employed and complete a Self Assesment tax return each year.

If you use your full tax-free allowance at your full time job, you will need to pay 20% of your freelance earnings over as tax. HMRC may also require you to pay NIC on it also.

McKneff

You wouldnt pay NI on your second job, it is well below the ceiling.

Savvy_Sue

daniel, welcome to the boards.

The advice you've been given on tax is broadly correct. However, if you look on the Small Biz board, there have been a few threads on PC repairs, and there tends to be a consensus that it's no way to make money ...

Possibly the biggest issue with offering a service to small businesses in your spare time, is that they don't want a service at a time which suits you, they want it at a time to suit them.

Randvegeta

Hi Daniel,

Savvy_Sue makes a good point, so unless you have a full time job that is outside of the normal working hours, you may have difficulty making money providing IT services to businesses that DO operate during working hours. I suppose you can try and capture a 'niche' and state your support hours are between X and Y and capture the business from the likes of restaurants and hotels who operate outside normal business hours.