Tax threshold

JohnLock

Hello,
I publish books on Amazon & Createspace - self employed publisher.
In December and January, I made £9,000 in royalties.
I'm also a full time student - and this publishing is my only job.
I'd just like some advice regarding tax.
Do I get up to 11,500 tax free?
So, if I earn say £5,000 next month, I'll exceed the tax threshold.
What happens then - do I have to notify the DWP?
Createspace have my national insurance number tied to my publishing account - so I assume the DWP will already know how much I earn via Amazon anyway?
Also, if I pay tax, how do I do this?
Some more information would be useful.
Thanks.

badmemory

It would be HMRC plus you will also need to pay some NI. Registering for self employment would seem to be the best idea. Don't expect "them" to get it right- you need to keep your own records of income & expenses..

00ec25

you are required to register as self employed (and can be fined if you do not do so by 5th October in the second year of your trading)

you will then be placed on self assessment and be required to submit a tax return wherein you declare all your income from whatever source it came from, trading on Amazon, bank account interest , odd jobs etc etc

just because you are a student does not give you an exemption from paying tax if your income exceeds the tax threshold

why not do some google research then you won't be referring to the DWP instead of HMRC

https://www.gov.uk/working-for-yourself

https://www.simplybusiness.co.uk/knowledge/articles/2016/11/how-to-set-up-as-self-employed-with-hmrc-uk/

https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed

https://www.litrg.org.uk/tax-guides/tax-basics

https://www.taxguideforstudents.org.uk

agrinnall

If you are making £5000 a month (is that profit or turnover?) hiring an accountant might well be a good idea. As you seem to know little about how to run your business yet an accountant will probably save you more in unmade mistakes than it will cost to hire them.

Pennywise

JohnLock wrote: »

Createspace have my national insurance number tied to my publishing account - so I assume the DWP will already know how much I earn via Amazon anyway?

No, your assumption is completely wrong.

It's "self" assessment - there's a clue in the name. You have to tell HMRC when you commence self employment. You have to keep accurate book-keeping records of your earnings and allowable expenses. You have to complete and submit a self assessment tax return each year to tell HMRC what profits you've made and how much tax and NIC you owe.

Createspace won't be making any declarations or sending any information re your earnings to DWP or HMRC.

laticsforlife

I wonder why they wanted OP's NINO, purely as evidence of identity?

Also nobody mentioned VAT - I'm no VAT expert but if it is a VAT-able supply (and I don't know if it is or not) then the OP might need to think about that threshold soon too (about £90k per year currently, turnover, not profit).

JohnLock

Hello,
Just to confirm, I have earned about £9,000 this tax year.
So, if I earn at least 2,500 before April 2018, any amount over 11,500 will be taxed at 20%.
Baring in mind it is difficult to predict what I will earn because my earnings fluctuate from month to month - depends on how many people buy my books.
In April, do I then file a tax return for 17-18?

Where does national insurance come into this?

Does this cover all the taxes I have to pay?

Also, as a 'self employed publisher', I assume I can claim several expenses on my tax return?

Thank you.

badmemory

To cover tax and NI (which starts at a lower threshold than tax) you need to put on one side ABOUT 30% of all income over £10k. This payment will need to be made by 31 Jan 19, so plenty of time but as your income is not guaranteed you need to be prepared. Also if your tax bill reaches over £1k you will need to also pay for part of the (what will then be) the current tax year. This won't be a problem if you put money aside as you go.

agrinnall

JohnLock wrote: »

Hello,
Just to confirm, I have earned about £9,000 this tax year.
So, if I earn at least 2,500 before April 2018, any amount over 11,500 will be taxed at 20%.
Baring in mind it is difficult to predict what I will earn because my earnings fluctuate from month to month - depends on how many people buy my books.
In April, do I then file a tax return for 17-18?

Where does national insurance come into this?

Does this cover all the taxes I have to pay?

Also, as a 'self employed publisher', I assume I can claim several expenses on my tax return?

Thank you.

You fail to understand how self employment works. You won't have to pay any tax until January 2019, but you should, as badmemory says, be putting enough aside to cover your liability plus future payments on account.