how do i start paying tax / do i need to? 4 January 2020 at 10:59AM edited 30 November -1 at 12:00AM in Small Biz & Charities' MoneySaving 5 replies 1.2K views

FITLIKE

Hi - around september i started working the odd weekend as a dj for £100 a time - on average i get 3 gigs a month.
they get me to invoice them at the end of the month and pay me £100 per gig and a bit on top for petrol.

I know i need to pay tax (or do i? - first £1k free??) where on earth do i start - do i need my own company? etc

thanks for any help

(i have a full time job through the week with Tesco where they pay tax for me etc)

00ec25

Question: (3 x 100) x 12 + "a bit on top for petrol" = more or less than £1,000?

You are trading in a self employed capacity so make it as far as paragraph 3 for your answer...
https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income

lindens

visit the HMRC webiste and look up self employed, there is lots of stuff to read. you can register as self employed and you will need to start filling in a tax return annually in arrears

Percy1983

As above register as self employed and then fill in a yearly tax return.

Currently you are a sole trader and just trading as you this is enough, you could setup a limited company etc but I wouldn't recommend it for you right now.

Past that keep records for income and expenditure for your business and fill out a year tax return with those figures + any other income, this will then tell you if you need to pay any tax.

Of course you can include other costs for equipment etc and claim for mileage to offset your income and pay less tax (if you are due to pay tax).

MaxiRobriguez

Such a small earnings (no offence) means no need to set up a separate entity at all. It's just not worth it.

Sole trader OK, annual tax filing in January online will take you 20 minutes.

c-m

The trading allowance allows you to earn up to £1000 without declaring it. Any more than £1000 and you have to declare and fill out a tax return. It can be costly to earn more at you'll get taxed on all of it, unless you make an election (effectively telling HMRC that you want to use the trading allowance).

Keep in mind that it is the total income earned that counts and not the profits.

Here's the government info:
https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income

Here's a write up:
https://moneysavinganswers.com/personal/tax/new-digital-trading-allowance/