Stipend, casual PAYE job and freelancing

CharBir

Hi everyone,

I am looking for some advice as the documentation I have read online has not been able to confidently clarify my query.

I am a PhD student receiving a £15,000 tax-free stipend from my university. During my studies, I do casual demonstrating for the undergraduates, earning ~£1000 (PAYE) per year from this role. I have also begun casual freelancing, invoicing 2 companies on an ad-hoc basis. Estimated earnings will be £1500 for the tax year for the freelance roles.

I know that I can earn £12,500 tax-free each year (and I believe my stipend does not count towards this), but do I need to fill in a self-assessment tax return for the earnings from the freelance roles (irrespective of how much I earn, or should I only file a tax return if I earn above the £12,500)?

I also read about the £1000 tax-free trading-allowance, but I think this may only apply if I register as a company? 

As you can see, it is a little complicated, so any advice would be much appreciated to ensure the correct taxes are paid.

Many thanks.

soolin

I don’t know the situation regarding the stipend but for your self employed income you would need to declare yourself as trading to HMRC and do a (very) basic declaration each year under self assessment. The trading allowance doesn’t apply as it is based on gross income and your estimated £1500 exceeds that. If your stipend is not taxable, and I’m sure someone will be able to assist you with that question, then assuming you only get the small amount of income under PAYE And the small amount of self employed income and have no other income then you would not pay tax. 

Dazed_and_C0nfused

The trading allowance would be something that could be relevant (to a sole trader) however it is irrelevant on such low annual taxable income.

You can register with HMRC and complete a Self Assessment return however in the circumstances described I don't think there is any legal requirement to do so (no tax or National Insurance will be due).

but do I need to fill in a self-assessment tax return for the earnings from the freelance roles

If you did decide to complete a Self Assessment return then it isn't to declare the freelance earnings, it is to declare all of your taxable income.

Jeremy535897

See https://www.litrg.org.uk/tax-guides/self-employment/how-do-i-register-tax-and-national-insurance
Earning less than the personal allowance does not mean you are not liable for national insurance, although your earnings are also below the class 2 limit.

You may still deduct the trading allowance from your gross income of £1,500, instead of deducting actual expenses, if that would be beneficial (irrelevant on your figures). You can't "register as a company". You can transfer your business to a limited company which then employs you, but on the numbers you mention, that would not be sensible.

If you have been told by the payer your stipend is tax free, you should be able to rely on that. See https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim06205 if in any doubt.