Tax help, PAYE and Self Employed

NicoleT83

I work 4 days a week and pay tax and NI on my PAYE job. I started a business in July 2020. I have a couple of questions because tax really confuses me!
1. When do I register as self employed?
2. Do I have to if I earn under £1000 in my self employed job?
3. Do I have to do a self assessment if I'm earning under £1000? If I do, when do I need to do it for?
4. Is the £1000 before or after any business expenses (for example I started a cake business so had to buy boxes, ingredients etc).

Any help is greatly received!

Dazed_and_C0nfused

1.  By October 2021.  But there is no benefit to leaving it till the last minute.

2.  Not normally unless you want to pay voluntary Class 2 National Insurance.

3.  If your turnover is less than £1,000 in the current tax year then no you don't normally have to complete a Self Assessment return (unless some other reasons applies or you want to claim expenses).  If a return is required you need to file it with HMRC by 31 January 2022.

4.  You are getting two things mixed up.  The £1,000 assumes you will claim the trading allowance instead of expenses.  If you want to claim expenses instead then the £1,000 limit does not apply.  For example turnover £900 less trading allowance £900 = no return required (unless HMRC have asked you to complete one).  Or turnover £900 less expenses £600 = £300 profit = Self Assessment return is required.

But claiming expenses in that situation wouldn't usually make sense.

NicoleT83

Thank you for clearing that up! I find it very confusing, the business gateway webinar wasn't very clear either!