I am getting paid for online work, how should I deal with my taxes?

arame3333

I have an account with a company that pays me to do tasks via their website. 
They do not make any deductions for taxes or anything else. I just get paid for each task I do.
I am wondering what I should do about this? Should I employ an accountant, how do I find a good one? Or is their a cheaper option?

DullGreyGuy

Is this company in the UK? 

By the sounds of it they are treating you as self employed and so if you are going to recieve more than £1,000 in any one tax year from them (and any other self employed work you do) then you need to register as such with HMRC and complete a Self Assessment tax return. By definition its intended to be done by yourself but you can employ an accountant if you prefer to pay someone else to do it... unless the earnings are substantial its unlikely to be cost effective. 

Bookworm105

from 6 April 2024 your "business" (as as a self employed person)  is assumed to operate on the "cash basis", ie for tax return purposes you declare income and expenditure on the day "you" receive/pay it. 
Cash basis: Overview - GOV.UK (www.gov.uk)

As said by dullgrey above, for tax return purposes you get a £1,000 trading allowance.
Self-employment (short) notes (publishing.service.gov.uk)
The tax return is where your declare your taxable profit = total income minus trading allowance (or actual costs if they are >£1k).

If your income is <£1k then you do not have to declare it on a tax return assuming you are not already required to do a tax return for other reasons as your taxable profit would be £0

If your income is >£1k then you do have to:
a) register as self employed;
Become a sole trader: Register as a sole trader - GOV.UK (www.gov.uk)
 and
b) declare it on a tax return, meaning you will need to complete all other relevant sections of the tax return (eg employment income, interest received, etc, etc)
Check how to register for Self Assessment - GOV.UK (www.gov.uk)

Please be aware this is formal self-employment, it is not "casual income". You are doing a clearly defined job in return for defined payment. So you must declare the income when the company pays it into "an account with a company that pays me". It is income on that date, irrespective of whether you never take it out to put it into your other (personal) account(s), or you spend it by buying stuff paid for by direct payment from that account.

If this is a non UK company and/or the account they pay it into is "offshore" then you will need to explain further (or employ a professional accountant for advice)


(note you cannot use the £1k allowance to create a loss, the best you can do if claiming that is reduce your taxable profit to zero)

DullGreyGuy

Bookworm105 said:

If your profit is <£1k then you do not have to declare it on a tax return assuming you are not already required to do a tax return for other reasons 

Its turnover for the £1k minimum on doing a self assessment not profit, which is logical given under £1k is never going to attract taxes no matter what other incomes you have. 

JennyDavis

You need to register as self-employed with HMRC. You can do this online on the HMRC website. I am freelancer for about 3 years now and love working remotely. With the microsoft teams SMS texting it is very easy to get in touch with the clients, no matter where in the world they are or where I am at the moment.