Self-employed and below personal allowance?

Moneyer

Not really about cutting tax, but cutting paperwork….

A friend who's a housewife has been offered £200 to do some consultancy work, as a one-off on a self-employed basis. Total income for the year will be well within her personal allowance, so there's no way she'll owe any tax.

Is there any (legal!) way she can avoid the whole process of registering as self employed, applying for a small earnings certificate, filing a tax return to show she owes zero, and then unregistering for the following year?

If she really has to do all this, it'll take longer than the actual work and make it not worth accepting the work in the first place. (The work is for a branch of government, so they're inflexible in how they structure things and may possibly share data with HMRC....)

TheCyclingProgrammer

You don't have to register as self employed for a one off piece of work. In order to be considered self employed, you need to be trading. Doing a one off piece of work isn't trading, it's one off income.

If you were already registered for self assessment, you could just put it in the box for "additional income". Even if you had already used up your personal allowance you could avoid the need to register for self assessment by notifying HMRC that you have a small amount of untaxed income and they would be able to adjust your tax code to account for it (up to a certain limit)

Legally you only have to notify HMRC if you're chargeable to tax. As there is no tax due in this case, and no need to register as self employed either, there is nothing to notify HMRC about.

If you want to be absolutely uncertain you can ring the HMRC self assessment helpline. Explain that you have a small one off amount of income within the personal allowance. I'd be surprised if they asked you to register for SA as its a waste of everyone's time. If they did say you need to then I'd seriously dispute it!

If the income was to start becoming regular then it could be argued that the person has begun trading (Google badges of trade tests). If this happens then even if there is no tax due, you would then have to register as self employed and apply for a SEE if necessary.