Honorarium payments from UK and overseas but not a formal self employment company

ronnyallan

I seem to have one of those scenarios not covered by self assessment!   I am retired and living on pension (work pension, not yet claiming state) but occasionally do some work under contract for various companies who know me.  I have no company setup etc.  Some of it is overseas companies so counts as foreign income.  They are short pieces of work, often just hours and mostly at home.  I just noticed the layout has change on self assessment TY 19/20 particularly under self assessment and the £1000 threshold etc.
My foreign income is around 80% of this year's income and the UK element is less than £1000. I have no other major complications to my tax return.  Does it all count as income?  Tryng to complete as "self employed" to take advantage of £1000 offset of expenses seems to add new complications as I don't have a properly established company - my project tax looks excessive. Any tips? 

Jeremy535897

If you are a UK resident and domiciled person, you are liable to UK income tax on your worldwide income. The fact that some of your customers are overseas will not alter the fact that you are a self employed person in the UK, unless you have some sort of base abroad where you work from, which I doubt. (Even if you did, you would still be subject to UK tax on the income, but it would be an overseas trade. You might also be liable to non-UK tax.)

You should declare your income as turnover on form SA103, and claim for your expenses. It is your choice as to whether to claim actual expenses or the trading deduction of £1,000. It is also your choice as to whether you do accounts on the cash basis or the accruals basis. If you had a company the company would be subject to corporation tax, and you would pay tax and possibly NIC on what you took out of it.

oldbikebloke

do you understand what an honorarium is? 
seeing as the only thing you mention is trading income from your SE activity, I fail to understand your choice of thread title.

just because you do not have a limited company does not stop it being SE income, after all there are more sole traders in SA than there are Ltd companies

ronnyallan

Jeremy535897 said:

If you are a UK resident and domiciled person, you are liable to UK income tax on your worldwide income. The fact that some of your customers are overseas will not alter the fact that you are a self employed person in the UK, unless you have some sort of base abroad where you work from, which I doubt. (Even if you did, you would still be subject to UK tax on the income, but it would be an overseas trade. You might also be liable to non-UK tax.)

You should declare your income as turnover on form SA103, and claim for your expenses. It is your choice as to whether to claim actual expenses or the trading deduction of £1,000. It is also your choice as to whether you do accounts on the cash basis or the accruals basis. If you had a company the company would be subject to corporation tax, and you would pay tax and possibly NIC on what you took out of it.

Thanks, so I just deduct £1000 from my total income on the basis that I am not a company ?  There's no automatic deduction when you declare in a non-company setting. 

ronnyallan

oldbikebloke said:

do you understand what an honorarium is? 
seeing as the only thing you mention is trading income from your SE activity, I fail to understand your choice of thread title.

just because you do not have a limited company does not stop it being SE income, after all there are more sole traders in SA than there are Ltd companies

thanks - it is confusing to me to be honest.  I understand it's "income" and happy to pay the tax on it.  My confusion is the self-assessment system online is about as clear as mud.  There's no automatic deduction of £1000 in a non-company setting so do I just declare my total income (UK plus foreign) less £1000 ?  

Dazed_and_C0nfused

If you are completing the Self Employment page of the return you can make a choice, either claim your actual business expenses or the (maximum) £1,000 trading allowance.

One caveat, the trading allowance cannot result in you making a loss i.e. turnover £800 less trading allowance = no profit no loss.

oldbikebloke

ronnyallan said:

oldbikebloke said:

do you understand what an honorarium is? 
seeing as the only thing you mention is trading income from your SE activity, I fail to understand your choice of thread title.

just because you do not have a limited company does not stop it being SE income, after all there are more sole traders in SA than there are Ltd companies

thanks - it is confusing to me to be honest.  I understand it's "income" and happy to pay the tax on it.  My confusion is the self-assessment system online is about as clear as mud.  There's no automatic deduction of £1000 in a non-company setting so do I just declare my total income (UK plus foreign) less £1000 ?  

you are coming at this from the wrong direction because with respect the notes and guidance for a tax return for self employment are pretty simple. No you do not "just declare" a net figure. You fill out the boxes you are instructed to do when you read the notes explaining what goes in each box of the SE section of the tax return.
Don't forget it is a tax return, it must include all income for the tax year, in other words you must also do the pension section and other sections for which you have taxable income (eg non ISA savings interest, dividends?)

you are self employed
you are UK resident
you have self employment income from customers in the Uk and abroad. That gives a single total = SE turnover.
as SE you will be taxed on your profit: income less costs = profit
as SE you have a choice which you must manually make on your tax return:
a) claim the £1,000 allowance as a deduction from your income. No other other deductions allowed. So turnover -1,000 = profit.
or
b) ignore the allowance, add up all your actual valid, claimable costs and claim that total. So turnover - actual costs = profit.