Starting a business - Help urgently needed

SaucepanOnTheStove

I'm in full time employment but started a side hustle in 2017, it earned next to nothing that year (under £300 for the whole year). I've plodded along since then, always thinking I was earning too little to make this official. But after a friend advised me to check the gov website, I calculated all of my earnings since then and I was quite shocked to see that all of these little amounts had soon added up and since I started to date I've earned just short of £10K. I'm in a complete panic and not a clue of what to do. Totally understand that this is my bad and hoping someone can answer some of the questions below and advise me on how to move forward.

What do I need to do next?

Do I disclose that I worked since 2017 or can I put a start year of 2020 as that's when I exceeded the £1K mark?

Will I be penalised? Is there a way to avoid this? If not, what are the penalties likely to be?

I'm totally overwhelmed by the gov website, can somebody give me dummy-proof instructions on what I do next?

Many thanks for reading.

Jeremy535897

Divide your turnover into amounts per tax year (to 31 March or 5 April). The first year that turnover exceeded £1,000 is the year you should have reported it. Which year is that?

SaucepanOnTheStove

Jeremy535897 said:

Divide your turnover into amounts per tax year (to 31 March or 5 April). The first year that turnover exceeded £1,000 is the year you should have reported it. Which year is that?

Thank you for your response. I made over 1k during financial year 19/20. What I do has zero running cost, just me on my computer. Thanks again

Penguin_

Ok well have you registered for self employment?

SaucepanOnTheStove

Penguin_ said:

Ok well have you registered for self employment?

Thank you for your response. I haven't yet

Jeremy535897

You should register as self employed immediately, as the deadline was 5 October 2021. See:
https://www.litrg.org.uk/tax-guides/self-employment/how-do-i-register-tax-and-national-insurance

Sandtree

You'll only be a few months late with registering and the fines for late registration and submission are much less significant than committing fraud and telling lies to HMRC and being caught.

SaucepanOnTheStove

Sandtree said:

You'll only be a few months late with registering and the fines for late registration and submission are much less significant than committing fraud and telling lies to HMRC and being caught.

Sorry I'm pretty clueless, I don't understand I'll only be a few months late, when I started in 2017 and exceeded the £1K threshold in 2020. Also, what kind of fines will I pay now? Thanks for your help

Jeremy535897

SaucepanOnTheStove said:

Sandtree said:

You'll only be a few months late with registering and the fines for late registration and submission are much less significant than committing fraud and telling lies to HMRC and being caught.

Sorry I'm pretty clueless, I don't understand I'll only be a few months late, when I started in 2017 and exceeded the £1K threshold in 2020. Also, what kind of fines will I pay now? Thanks for your help

You don't have to register as self employed until 5 October following the end of the tax year in which your turnover exceeds £1,000. Based on what you have said, start with 2019/20, but get on with it. Any fines for delay in registering are likely to be modest, if any are charged, although there will be interest on any overdue tax and potential late payment penalties on top. It depends on what sort of tax liability you are talking about.

martindow

I've seen it suggested that using an accountant to submit late registrations or tax returns smooths the process.  I'm not sure how true this is or whether the penalties charged would be reudced.  Maybe others could comment on this.

Mistral001

martindow said:

I've seen it suggested that using an accountant to submit late registrations or tax returns smooths the process.  I'm not sure how true this is or whether the penalties charged would be reudced.  Maybe others could comment on this.

Maybe a little like the courts where representing yourself and not getting legal representation is regarded by judges and magistrates as disrespecting the court.  It can lead to a bigger fine.