Self assessment for casual income (< £1000)

401kill

Hi

My partner and I have both been registered for self-assessment in 2016/17 period in order to report income from (separate) hobbies. Neither of us has made > £1000 from our hobbies.

Now that the new £1000 allowance on self-employed / casual income has come into effect, what's the easiest way to stop having to do a self-assessment?

Do we just declare that we ceased trading at the end of the 16/17 tax year? This doesn't seem quite right since we are technically still trading, but below the limit for SA.

Do we need to phone HMRC to opt-out of SA without ceasing trading?

Something else entirely?

Thanks
Ben

TheCyclingProgrammer

Submit the tax return for 16/17.

Wait and see if HMRC send you a notice to file a tax return after April for 17/18. You aren’t obliged to submit a tax return unless you receive one of these.

If you get a notice to file, ring HMRC up, explain that your earnings fall within the new allowance and ask them to withdraw the notice. Get this in writing.

401kill

Thank you!

The reason I asked about trading status, is that (I'm assuming) if I had started more recently, under the new rules I wouldn't need to notify HMRC of any trading taking place until I exceeded the £1000 allowance (since there doesn't seem to be any way to notify them without also registering for self-assessment).

Do we still need to be registered as sole traders under the new rules?

TheCyclingProgrammer

If you qualify for the new trading allowance and your income is below the threshold you have no obligation to notify HMRC or register for self assessment.

http://www.alphalimited.co.uk/qualify-new-trading-allowance/

401kill

Perfect, thanks. Let me just check I've understood correctly:

• My 2016/17 self-assessment should be left without a ceased trading date.
• If/when I receive a 2017/18 notice to file, notify HMRC that my income is under the £1000 allowance.
• This will leave me in the same position as if I had started trading in 17/18 - nothing to declare and no trading status with HMRC.
• I don't need to submit the "ceased trading" form at any point in the future after doing this, since I'm now treated as a casual earner.

Pennywise

Rather than waiting to see if they send you a "notice to complete", which they almost certainly will, why not be proactive and tell them, sooner rather than later, that you're s/e income has ceased, no income to report for 17/18 and ask them not to issue a "notice to complete" in the first place. Some HMRC customer service agents refuse to withdraw a "notice to complete" and insist you still have to complete a SA return even if there is no need. But whatever you do, insist on them writing to confirm - it's an automated letter saying you don't have to complete a SA return for (xxx) year onwards - until you have that letter, HMRC will expect you to complete a return.

401kill

Rather than waiting to see if they send you a "notice to complete", which they almost certainly will, why not be proactive and tell them, sooner rather than later, that you're s/e income has ceased, no income to report for 17/18 and ask them not to issue a "notice to complete" in the first place.

That is pretty much what I was originally asking (if perhaps not clearly!) - what is the best way to do this?

• Submit my 16/17 tax return with a ceased trading date set (and a matching ceased trading form if required).
• Submit 16/17 tax return without a ceased trading date set, and then submit a ceased trading form with a date at the start of 17/18.
• Submit 16/17 tax return without a ceased trading date set, then phone HMRC to inform them that there is no taxable income to report for 17/18 onwards (and request confirmation in writing).

Having had to phone HMRC a few times previously regarding tax and NI, I'd rather not if I can submit an online form - it took a *very* long time to get to talk to anyone!