How will the tax office know where the money comes from?

arame3333

I am a sole trader.
I log onto a website and I get paid for tasks that I do.
I can do as much or as little as I like.
The company who run the website is based in the USA. They calculate my pay in dollars a few days later and when I want to get paid I click on a button and the money is sent to my PayPal account. From my PayPal account I can then send it to my business account.
There is no paperwork involved. That is my problem.
It is a simple business and probably does not need me to have have an accountant.
I decide when to transfer the money, usually when the dollar-pound exchange rate is good.
However my bank account shows that it is me who is paying into my business account.
What would HMRC like to know about where this money comes from when I fill in my tax returns?

DE_612183

have you got a Ltd Company?

arame3333

No I am a sole trader

arame3333

DE_612183 said:

have you got a Ltd Company?

No I am a sole trader

DE_612183

So you just fill out your Self Assessment as normal.

But obviously keep all records of invoices / payments etc.

zedonk

You should keep a record of all the transactions into and out of your PayPal account, and think of it like another business bank account. You're not paying yourself, your client pays you into one account, and then you transfer it into the other.

If you currently use PayPal for personal stuff too, you might find it easier to have a second PayPal for business. 

DullGreyGuy

Presumably the freelancing site keeps a record of jobs you've done, monies you've collected and monies you've withdrawn. 

Hoenir

How do you know that you are getting paid for everything you've done? 

SensibleSarah

I'm a freelancer (sole trader) and I also do some online surveys etc to help bump up my income, so my survey income sounds like it works in a very similar way to yours. There is 'paperwork', but it's digital i.e. you should get an email every time your paypal account is sent money by your 'client' and whenever you send the money on to your busienss account there will be a record of this in Paypal. Keep all of your related emails in a folder. I also keep a spreadsheet of transactions as I like to know the figures at a glance - and I keep track of how much tax etc I'll need to pay on my survey earnings here too so I can make sure I set aside approx the right amount. You don't need an accountant for straightforward bookkeeping. 

se2020

The inland revenue will not be interested in the source of any income that has been declared as income on a self assessment return.

They are only interested in income that is not declared as income.  Ie if there is a payment in of £100 from your sister as a birthday present and you (rightfully) haven't declared that as income,  they will ask questions about it.