Very low earning self employment

bexman

I work full time and earn a salary which I PAYE 20% tax. I've recently started working as a professional photographer part time and have made small earnings from it. To keep everything legal I registered with the HRMC and will complete tax returns.

I am expecting to make no more than a couple of thousand a year if I'm lucky. I have purchased a lot of camera equipment on lease and pay monthly for it, I also have to drive to locations when working. Can I offset the lease of my equipment and fuel costs against my profit? Also do I pay NI on the profit? I am fully expecting to actually make a loss after lease payments and travel expenses are deducted. It's a passion more than a job but every now and again I get paid which is nice! I have lease statements but I guess I'll need fuel receipts?

I've contemplated paying an account but that's another £300 and I'd rather do it myself if possible. Any help greatly appreciated.

PlutoinCapricorn

You are entitled to deduct legitimate business expenses from your SE income, which results in the profit on which you will be taxed - at 20%.

When was your official trading start date? If it was between April 6th 2012 and April 5th 2013, you will have from now until January 2014 to complete your tax return, which gives you plenty of time to master all the details. If you started after April 6th this year, you have much longer.

It seems that you do not expect to earn enough to be required to pay Class 2 NI, and as you have a PAYE job you will be entitled to benefits so there is no need to pay Class 2 voluntarily. Did you claim exemption on the grounds of low earnings?

It is best to keep receipts in case HMRC ever decide to enquire into your expenses. By the way, it is not good for people to look as though they are trying to subsidise their hobbies: if you register you are expected to be trying to run a profitable business.

Norman_Castle

Check your car insurance has business use.
http://www.hmrc.gov.uk/rates/travel.htm
Keep a diary of all work you do with a record of all income and expenditure and a mileage log. Use this for your tax return.

martinsurrey

bexman wrote: »

I work full time and earn a salary which I PAYE 20% tax. I've recently started working as a professional photographer part time and have made small earnings from it. To keep everything legal I registered with the HRMC and will complete tax returns.

I am expecting to make no more than a couple of thousand a year if I'm lucky. I have purchased a lot of camera equipment on lease and pay monthly for it, I also have to drive to locations when working. Can I offset the lease of my equipment and fuel costs against my profit? Also do I pay NI on the profit? I am fully expecting to actually make a loss after lease payments and travel expenses are deducted. It's a passion more than a job but every now and again I get paid which is nice! I have lease statements but I guess I'll need fuel receipts?

I've contemplated paying an account but that's another £300 and I'd rather do it myself if possible. Any help greatly appreciated.

also, if its a hobby and you use the "business" camera you can only claim a percentage of the equipment lease as an expense.

for example if you took 1,000 personal pictures a month, and only 500 that you were paid for, you could only claim 1/3 of the rentals as a business expense.


http://www.hmrc.gov.uk/incometax/relief-self-emp.htm

John_Pierpoint

https://www.gov.uk/simpler-income-tax-simplified-expenses/vehicles-

[For some reason they have left out environmentally friendly push bikes.]

Have fun.

Norman_Castle

20p per mile for bicycles.