Need help with tax for self employment

Manny__S

Hi,

I found this website and I need some help with understanding tax. I'm 19 years old and i've been earning money from self employment for around 15 months now. I am currently not registered as being Self Employed with the HMRC. The money I earn is from Twitter and I am paid a fixed amount by company for every referral(click) I get on there website. For the first 6 months I was earning £120 a week which was the maximum I could earn from them. For the 4 months after that they increased the limit from £120 to £200 so I was earning £200 a week. However for the last 5 months the pay increased further to £300 a week and therefore I have been earning that for the last 5 months.

In the last month another company got in touch with me and offered me another deal very similar to the one I already have so I am now working with both companies. I have just received my first earnings from this new company as they pay monthly and the amount I received was £2000. Now with the income I am receiving from both of these companies hitting around £3200 a month.

I didn't register straight away as I was only earning £120 a week which meant that I would be earning under the £9440 personal allowance you are allowed to earn. What I want to know is If I register for HMRC as self employed right now, will I get fined? I also would like to know if I will have to pay any tax on the income I have earnt in the past few months? Also how much of my current income will I have to pay to HMRC from now on?

I am very confused and could really do with some advice and help.

p00hsticks

Hi, I'm sure someone on this forum will be able to help you, but this probably not the best board to ask on (the naming is slightly confusing, but the reference to Tax Credits in the board name relates to the Working Tax Credit and Child Tax Credit benefits, not more general income tax queries).

I'd suggest re-posting on the 'cutting tax' board

http://forums.moneysavingexpert.com/forumdisplay.php?f=22

I'm no expert, but earning that amount a month you'll definitely owe some back tax and NI - if you've not been putting something by already I suggest you start now.

And I strongly suspect that the people on the cutting taxes board will advice that HMRC will look much more kindly on someone who approaches them and wants to put things right that if and when they find out themselves and come after you.

Manny__S

blondebubbles wrote: »

You should have registered anyway even if below the personal allowance. It is for them to decide if you have tax to pay rather than deciding yourself. If you were an employee you would still go through payroll even if not earning enough to pay tax/nic.

There may be a penalty. You need to call ASAP to register, the penalty may be less if you inform them yourself rather than them finding out.

What did you earn in the tax year April 12 - April 13?
What do you expect to earn in the tax year April 13 - April 14?

April 12 - Apiril 13 = £2000
April 13 - April 14 = I have earned £8000 so far and expect to earn a further £6450 in the next 2 months so £14,450.

Icequeen99

blondebubbles wrote: »

Okay so you'll have no tax/nic to pay for 12/13.

For 13/14 you'd prob pay about £1000 in tax. Depends on if you have any business expenses though. You'd have Class 2/4 NICs on top of that too.

But he would be liable to class 2 NIC for 12/13 because you are only exempt if you have a small earnings exception.

Plus there are penalties for NIC that may be applicable.

I recommend that he contacts a charity like TaxAid to get him on the right footing.

IQ

alwaysonthego_2

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