HELP: tax on an occasional job

BUBU

Hello


I recently work extra 2 to 3 days a month as a self-empolyed in my spare time alongside with my main job. Do I inform HMRC if I earn more than 1000 pounds. If so, do I just need to fill in a self-assessment tax return form?

I am planning to do the occassional job for long term, would it be better to set up a company for freelancing job. Is there any difference in term of tax to pay as individual and a company??


thank you very much

00ec25

are you going to earn more than £1,000 in any single tax year: YES or NO?

if No then you do nothing

if yes then
a) you register NOW as self employed
https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed

b) you complete a tax return
https://www.tax.service.gov.uk/government-gateway-registration-frontend?accountType=organisation&continue=/business-registration/introduction&origin=SA-frontend

c) you work as a sole trader, not a company, unless you expect to earn upwards of £30,000 in your second job, at which point the economics of a company would be clear cut.

tightasagnats

Above advice is correct and important, if you do not register now you may be fined.

Bear in mind that whoever pays you may be audited and they will declare who they pay and how much.

As a sole trader, you may be able to claim certain expenses incurred.

https://www.gov.uk/set-up-sole-trader

agrinnall

BUBU wrote: »

I am planning to do the occassional job for long term, would it be better to set up a company for freelancing job. Is there any difference in term of tax to pay as individual and a company??

The answer to this question is possibly. Without knowing what industry you are in or who your clients might be then it's difficult to say one way or the other. What we can say is that if the turnover is high enough and the circumstances allow then setting up a limited company can be more lucrative as it can allow you to distribute profits as dividends rather than salary and make NI savings as a result. You may also find that some clients will only deal with companies and not individuals.

TheCyclingProgrammer

tightasagnats wrote: »

Above advice is correct and important, if you do not register now you may be fined.

No need to unnecessarily panic OP. If the extra work is in the current tax year they have until 5 October 2019 to register if necessary. If it was in the previous tax year then the deadline for registering has already passed but IIRC HMRC do not issue late notification penalties so long as you register and file your tax return by the 31 Jan deadline.