Self assessment for client leisure activities

liamcov

I am currently working as an employee for a company so getting taxed each month in the normal way.

I will soon be taking on the task of taking out clients in the evening for leisure activities whilst they are staying in london, such things as dinners, events, booking theatre for them. Any payment will be given directly to me and not through the company, so the question is what do I do about the tax on this? I'm guessing I will have to do self assessment like a self-employed person but I'm not sure of the procedure. Also, how will this work in tandem with my paid wages from work each month?

Is there also anything I would not be required to pay tax on, such as buying theatre tickets and transport as some of the money would obviously just cover that?

I've read online about deadlines in Jan and Apr but it's so confusing, when do you actually pay the tax as I would prefer paying monthly as opposed to a huge tax bill at the start of the year.

What evidence would I need to provide to, I wouldn't have receipts as such, just a record of the date, the amount, things purchased such as tickets, and a bank receipt when I put the money in my account each week/month, what else would be required?

Also do HMRC send you proof of what you have earned/tax paid each year (like you get a P60 from an employer) so I can prove this when applying for things like a mortgage etc?

Sorry if this is incomprehensible, I just have no idea how this will work as it's simply being an employee and my company hasn't really offered any help on the matter. Can anyone also provide a link for the amounts you earn for tax free/20%/40% tax so I can see if this is worth it.

Thanks for any help and go easy this is all new to me.

HappyMJ

Any reimbursed expenses are tax free. You don't need to declare them.

Your employer will require you to provide receipts to get a reimbursement. I suggest you keep a copy of those receipts. You don't need any evidence at all for tax but it's just in case they (HMRC) want more information regarding your bank credits.

Your employer is responsible for the tax payable.

liamcov

I don't understand, I didn't think this had anything to do with my employer which is basically what they have said, I thought it was all on me to sort out self employed etc.

liamcov

Also, who do I notify/how do I pay money towards my student loan as I will be earning more?

nomunnofun

liamcov wrote: »

I don't understand, I didn't think this had anything to do with my employer which is basically what they have said, I thought it was all on me to sort out self employed etc.

You incur expenses in the course of your employment by entertaining its (not your) clients. You submit a claim for these expenses to your employer. The expenses are reimbursed to you and this reimbursement is not taxable.

Self assessment does not figure at all.

There would be a problem if your employer gives you a wad of money every month and says 'here is money to cover your expenses for the coming month' without the requirement to evidence the expenditure. Both tax and NI problems for both of you in this instance!

nomunnofun

liamcov wrote: »

Also, who do I notify/how do I pay money towards my student loan as I will be earning more?

HMRC should notify your employer and 9% of your salary over £21000 will be deducted - no action required by you.

liamcov

nomunnofun wrote: »

You incur expenses in the course of your employment by entertaining its (not your) clients. You submit a claim for these expenses to your employer. The expenses are reimbursed to you and this reimbursement is not taxable.

Self assessment does not figure at all.

But the clients will be transferring money to me directly to cover my time and what entertainment I have purchased so I thought this would class as self employed income?

agrinnall

Can you clarify whether the money you will receive from clients is simply the cost of the entertainment that you offer them, or will they be paying a premium, which effectively goes directly to you to compensate you for your time?

liamcov

agrinnall wrote: »

Can you clarify whether the money you will receive from clients is simply the cost of the entertainment that you offer them, or will they be paying a premium, which effectively goes directly to you to compensate you for your time?

It will be a premium to me, some of which will cover for the entertainment provided. Sorry if I wasn't that clear, it's very confusing.

Savvy_Sue

Is your employer requiring you to do this? If so, it's a very odd way of going about it, IMO.

PlutoinCapricorn

It sounds a bit odd to me too. Why are the clients paying you directly?

If you are out of pocket, the employer should reimburse you. This is not taxable.

If you are getting money for taking people out, it sounds like overtime to me so should be added to your normal pay and taxed at source. Maybe you should fill in a time sheet...