Trading Allowance

benten69

Hi all,

I am currently in full time employment and pay taxes / NI through my employer on PAYE.

I have been asked to provide some of my expertise outside of my normal job and therefore in a "sole trader" capacity. This is likely to be a 1-off job and most certainly below the £1000 traders allowance.

My question is, do I need to report this to HMRC via the self assessment?

As I understand that if you are a sole trader earning under £1000 gross income then you do not need to register for self assessment / report the income, however does this change at all when you are also in full time employment elsewhere?

The reason I ask is that the HMRC website says...

"You cannot use the allowances in a tax year, if you have any trade or property income from:

• your employer or the employer of your spouse or civil partner"

Do they mean "your employer" as in if you were working as a sole trader for someone else (ie, contracted to a job and so you can't use your allowance separate to that) or does that also include if you are employed on PAYE?

Dazed_and_C0nfused

They mean, in broad terms, if there is a link with your employer - the one you referred to here,

I am currently in full time employment and pay taxes / NI through my employer on PAYE.

benten69

Dazed_and_C0nfused said:

They mean, in broad terms, if there is a link with your employer - the one you referred to here,

I am currently in full time employment and pay taxes / NI through my employer on PAYE.

I guess the answer to that is no. This extra work has no bearing on my current employment other than it’s the same line of work, but has nothing to do with my current employer.

So does that mean I can earn up to £1000 gross without having to report it to HMRC?

Jeremy535897

benten69 said:

Dazed_and_C0nfused said:

They mean, in broad terms, if there is a link with your employer - the one you referred to here,

I am currently in full time employment and pay taxes / NI through my employer on PAYE.

I guess the answer to that is no. This extra work has no bearing on my current employment other than it’s the same line of work, but has nothing to do with my current employer.

So does that mean I can earn up to £1000 gross without having to report it to HMRC?

You can have up to £1,000 sales as a self employed person without reporting it, if it's not for your employer. The restriction is to avoid employers using the trading allowance to pay all their employees £1,000 tax free.

benten69

Perfect, thanks

Grumpy_chap

benten69 said:

Hi all,

I am currently in full time employment and pay taxes / NI through my employer on PAYE.

I have been asked to provide some of my expertise outside of my normal job and therefore in a "sole trader" capacity. This is likely to be a 1-off job and most certainly below the £1000 traders allowance.

My question is, do I need to report this to HMRC via the self assessment?

As I understand that if you are a sole trader earning under £1000 gross income then you do not need to register for self assessment / report the income, however does this change at all when you are also in full time employment elsewhere?

The reason I ask is that the HMRC website says...

"You cannot use the allowances in a tax year, if you have any trade or property income from:

• your employer or the employer of your spouse or civil partner"

Do they mean "your employer" as in if you were working as a sole trader for someone else (ie, contracted to a job and so you can't use your allowance separate to that) or does that also include if you are employed on PAYE?

You need to do this extra work in the far simpler manner of it being simply paid as overtime (or bonus or whatever the employer chooses to call it) added to your pay slip and taxed in the normal way.  

Considering a small amount of extra work as "sole trader" is an absurd complexity for what is a relatively low value of work.  

If you have choice in whether to do this extra work, then you may wish to adjust the amount you are to be paid for it to reflect the fact that you will only receive the nett after tax.  Given you say this is "expertise outside the normal job" there is no reason that the hourly rate needs to bear any linkage to the normal hourly rate for your regular job.

Jeremy535897

Grumpy_chap said:

benten69 said:

Hi all,

I am currently in full time employment and pay taxes / NI through my employer on PAYE.

I have been asked to provide some of my expertise outside of my normal job and therefore in a "sole trader" capacity. This is likely to be a 1-off job and most certainly below the £1000 traders allowance.

My question is, do I need to report this to HMRC via the self assessment?

As I understand that if you are a sole trader earning under £1000 gross income then you do not need to register for self assessment / report the income, however does this change at all when you are also in full time employment elsewhere?

The reason I ask is that the HMRC website says...

"You cannot use the allowances in a tax year, if you have any trade or property income from:

• your employer or the employer of your spouse or civil partner"

Do they mean "your employer" as in if you were working as a sole trader for someone else (ie, contracted to a job and so you can't use your allowance separate to that) or does that also include if you are employed on PAYE?

You need to do this extra work in the far simpler manner of it being simply paid as overtime (or bonus or whatever the employer chooses to call it) added to your pay slip and taxed in the normal way.  

Considering a small amount of extra work as "sole trader" is an absurd complexity for what is a relatively low value of work.  

If you have choice in whether to do this extra work, then you may wish to adjust the amount you are to be paid for it to reflect the fact that you will only receive the nett after tax.  Given you say this is "expertise outside the normal job" there is no reason that the hourly rate needs to bear any linkage to the normal hourly rate for your regular job.

OP said it has nothing to do with his current employer.

benten69

Jeremy535897 said:

Grumpy_chap said:

benten69 said:

Hi all,

I am currently in full time employment and pay taxes / NI through my employer on PAYE.

I have been asked to provide some of my expertise outside of my normal job and therefore in a "sole trader" capacity. This is likely to be a 1-off job and most certainly below the £1000 traders allowance.

My question is, do I need to report this to HMRC via the self assessment?

As I understand that if you are a sole trader earning under £1000 gross income then you do not need to register for self assessment / report the income, however does this change at all when you are also in full time employment elsewhere?

The reason I ask is that the HMRC website says...

"You cannot use the allowances in a tax year, if you have any trade or property income from:

• your employer or the employer of your spouse or civil partner"

Do they mean "your employer" as in if you were working as a sole trader for someone else (ie, contracted to a job and so you can't use your allowance separate to that) or does that also include if you are employed on PAYE?

You need to do this extra work in the far simpler manner of it being simply paid as overtime (or bonus or whatever the employer chooses to call it) added to your pay slip and taxed in the normal way.  

Considering a small amount of extra work as "sole trader" is an absurd complexity for what is a relatively low value of work.  

If you have choice in whether to do this extra work, then you may wish to adjust the amount you are to be paid for it to reflect the fact that you will only receive the nett after tax.  Given you say this is "expertise outside the normal job" there is no reason that the hourly rate needs to bear any linkage to the normal hourly rate for your regular job.

OP said it has nothing to do with his current employer.

Exactly, this has NOTHING to do with my current employer, this is merely me using my skill set outside of my current work environment as I have been approached by a 3rd party who has asked me to help with a 1-off job.

At no point did I say anything about extra work for my current employer. This will be totally separate from my main employment.

Hence it will be me working as a "sole trader", as I do not have a LTD company or anything like that setup.

Grumpy_chap

Jeremy535897 said:

OP said it has nothing to do with his current employer.

benten69 said:

Exactly, this has NOTHING to do with my current employer, 

Sorry, I misunderstood the OP for some reason.  Thank you for the correction.  The remainder of what I said is clearly irrelevant.