Declaring Online Earning Income?

Merlin's_Beard

Prior to today, the answer would be yes, for small amounts you could just ring up and declare it without having to do a self-assessment tax return.

Today, the Finance Bill passed through Parliament. This allows you to have up to £1000 of casual extra income (not from your normal employer) without declaring it. It takes effect from the 2017/18 tax year, so anything earned from last April onwards.

So as long as you don't earn more than £1000 per tax year from all casual earnings (including gift cards etc) then no you don't have to declare it.

bpatl786

hello lovely guys, i was thinking of venturing into online trading for bit of side income. Does the income from online trading qualify as second income and be taxed at higher rate?

jkl123

Ah that's great, thankyou xx

General_Grant

Profit from online trading counts as earnings from self-employment. You need to tell HMRC about it.
Go to the HMRC website and register as self-employed.
It won't be taxed at a higher rate unless it takes you into a higher rate tax bracket for the year. How much do you earn from regular employment and how much do you expect to earn from online trading up to 5 April 2018?

Daddybear85

hi everyone at the start of this year I was struggling with depression however found that making things out of wood for me and my family was a good way to boost my moral. A few things I have made has got some interest off friends and friends of friends, which has lead me to the idea of maybe trying to sell a couple of bits and see how it goes. I have found conflicting info on if I am allowed to earn a small amount of "pocket" money without needing a account and to declare what I make from my hobby. does anyone have any experience with this??


Thanks for any help.

droopsnoot

As far as I know, income is taxed the same whether you make it through a normal full-time job, or by making and selling items as a hobby. You have a tax threshold below which no tax is due, and then several levels at which varying percentages are deducted. The only difference is that for your hobby / business, you need to declare it to the tax man and do the calculations / keep the records. That is to say - the amount you're allowed to earn as "pocket" money is just the normal tax threshold.

You can, of course, make reasonable deductions for your costs - so if you buy the wood, the tools, consumables (varnish, sandpaper etc.) these costs can be knocked off so that you're being taxed only on the profit.

No doubt someone will have a more definitive answer. I started making some small items and selling them, and have made a point of declaring income minus profits to ensure it doesn't come back to bite me. I let the online self-assessment do the calculations for me, and if it turns out that tax is due back to me for whatever reason, then it does that too. So it's not as if, by filling out SA, you run the risk of paying more tax than you should. Generally.

PasturesNew

If you sell stuff you should register.
The annual tax return is, at the lower end of income, just a question of typing in two figures - how much money did you take in & how much did you end up with after costs/expenses.

You will probably not need to pay a penny of tax, but you do need to be registered and to fill in the form.

glennevis

What about the new trading allowance that lets you earn up to £1000 from a hobby without declaring it to the taxman.

lincroft1710

glennevis wrote: »

What about the new trading allowance that lets you earn up to £1000 from a hobby without declaring it to the taxman.

I think this never made it into any finance bill so doesn't apply

Merlin's_Beard

lincroft1710 wrote: »

I think this never made it into any finance bill so doesn't apply

After several false starts, it has very quietly made it into law as the Finance (2) 2017 Bill here: http://www.legislation.gov.uk/ukpga/2017/32/contents/enacted

I suspect the Government drawing attention to it would only draw attention to the fact that they failed to do it the first time around!