Self assessment: declaring small amount of pay for casual work

bankholiday

Hi,

If anyone could assist me I would be grateful.

I'm filling out my self assessment and have a problem.

I have added a small payment of GBP160 for some freelance work to my assessment form on top of my earnings (25K) plus profits from my rental property (5k).

Adding this casual work under self-employed boosts my tax bill from GBP990 to over 2K (1k for the tax year 2014 to 2015 and another 1k on account for 2015-16).
I can't understand why the HMRC calculation demands so much when I just did one job outside my full time job in the tax year.

Please, could anyone let me know if this is correct or what I should be doing if I have made a mistake in filling out the self assessment?

Thanks in advance.

agrinnall

I'd guess it's because the £990 you owed has been increased to £1022 pushing you over the £1000 limit described here.

https://www.gov.uk/understand-self-assessment-bill/payments-on-account

bankholiday

Thanks for the prompt reply. First year doing my own books. Really helpful.

TheCyclingProgrammer

You needn't bother with the self employed section unless you were actually registered as self employed.

There is a box on the main part of the form for entering any additional income such as casual earnings/one off amounts of freelance income exactly like this. Put it in there instead.

The payments on account will be paid in two parts but if you expect to earn less you can file to have them reduced. However if you expect the tax to be the same or higher I'm not sure there is much you can do about the payments on account short of not bothering to declare the £160.

That being said, if you put the tax away each month from your rental income you should have 10 months worth of tax for 2015/16 saved up by the time the first payment on account is due so you should have it covered - just think of it as paying sooner rather than later.