Side hustle profit below £1k

Millie_moo_muff

I have a private pension below £12570 and I do exam prep tuition in the spring term which profits less than £1k a year so have never filed a self assessment. 

Am I right in thinking that as both are below the threshold for tax that I don’t pay OR are they added together and therefore need to submit a self assessment asap and face fines and penalties. 

I’ve just registered as self employed backdated to 2017 so as to qualify for class 2 contributions but am now very worried that I’ve been wrong and ought to have filed a return since I got my private pension (2019) 

TIA for any help and info

Brie

If pension + side hustle is more than the tax threshold then tax needs to be paid on that bit.   

Dazed_and_C0nfused

Millie_moo_muff said:

I have a private pension below £12570 and I do exam prep tuition in the spring term which profits less than £1k a year so have never filed a self assessment. 

Am I right in thinking that as both are below the threshold for tax that I don’t pay OR are they added together and therefore need to submit a self assessment asap and face fines and penalties. 

I’ve just registered as self employed backdated to 2017 so as to qualify for class 2 contributions but am now very worried that I’ve been wrong and ought to have filed a return since I got my private pension (2019) 

TIA for any help and info

If you have profits why haven't you been declaring them to HMRC?

If you didn't have tax to pay that Kay be a valid reason but are you getting confused with the Trading Allowance?

soolin

Incidentally the trading allowance is based on total receipts, not profit.

Millie_moo_muff

Dazed_and_C0nfused said:

Millie_moo_muff said:

I have a private pension below £12570 and I do exam prep tuition in the spring term which profits less than £1k a year so have never filed a self assessment. 

Am I right in thinking that as both are below the threshold for tax that I don’t pay OR are they added together and therefore need to submit a self assessment asap and face fines and penalties. 

I’ve just registered as self employed backdated to 2017 so as to qualify for class 2 contributions but am now very worried that I’ve been wrong and ought to have filed a return since I got my private pension (2019) 

TIA for any help and info

If you have profits why haven't you been declaring them to HMRC?

If you didn't have tax to pay that Kay be a valid reason but are you getting confused with the Trading Allowance?

Hi, when I checked on the gov website as to filling a self assessment it said I didn’t need to as profits below £1k.
I contacted citizens advice and got same info re doing a return 

Millie_moo_muff

Brie said:

If pension + side hustle is more than the tax threshold then tax needs to be paid on that bit.   

So I guess I’m going to get hit by late fees etc or is there a case that I’d misunderstood?

Brie

Millie_moo_muff said:

Hi, when I checked on the gov website as to filling a self assessment it said I didn’t need to as profits below £1k.

I contacted citizens advice and got same info re doing a return 

It might depend on what you asked about or what you found on the gov site.  If it's interest under £1k I believe you don't need to pay tax.  Likewise if it's selling bits on ebay/vinted etc up to £1k there's no tax.  But if you are employed, by someone else or self employed, it's income not a side hustle and therefore subject to being taxed.

Have you added up the amounts to see if there is actually any tax that might be payable?  I mean if you're still below the tax threshold there's nothing to worry about.  

Millie_moo_muff

Brie said:

Millie_moo_muff said:

Hi, when I checked on the gov website as to filling a self assessment it said I didn’t need to as profits below £1k.

I contacted citizens advice and got same info re doing a return 

It might depend on what you asked about or what you found on the gov site.  If it's interest under £1k I believe you don't need to pay tax.  Likewise if it's selling bits on ebay/vinted etc up to £1k there's no tax.  But if you are employed, by someone else or self employed, it's income not a side hustle and therefore subject to being taxed.

Have you added up the amounts to see if there is actually any tax that might be payable?  I mean if you're still below the tax threshold there's nothing to worry about.  

I do exam prep tuition, and initially it won’t have gone over the £12570, but recently (last year I think due to pension increase) it will have put me over combining the two. 

It was the terminology that confused me profit/income ….. didn’t realise there was a distinction. 

As I have pension gaps it benefits me to be self employed to pay class 2 stamp. Obviously happy to pay any tax owed just hope I don’t get blasted with fines for being uninformed and misunderstanding the difference between profit and income 

Millie_moo_muff

Brie said:

Millie_moo_muff said:

Hi, when I checked on the gov website as to filling a self assessment it said I didn’t need to as profits below £1k.

I contacted citizens advice and got same info re doing a return 

It might depend on what you asked about or what you found on the gov site.  If it's interest under £1k I believe you don't need to pay tax.  Likewise if it's selling bits on ebay/vinted etc up to £1k there's no tax.  But if you are employed, by someone else or self employed, it's income not a side hustle and therefore subject to being taxed.

Have you added up the amounts to see if there is actually any tax that might be payable?  I mean if you're still below the tax threshold there's nothing to worry about.  

I found this reply from HMRC to a very similar question to mine. But now I study it further her extra earnings was her only income so that maybe makes a difference

Dazed_and_C0nfused

Millie_moo_muff said:

Brie said:

If pension + side hustle is more than the tax threshold then tax needs to be paid on that bit.   

So I guess I’m going to get hit by late fees etc or is there a case that I’d misunderstood?

You cannot be fined for not filing a tax return you haven't been asked to complete.

When a return is issued you will have 3 months to file it.

But the payment date for any tax owed does not change so you could expect to be charged interest on anything paid late.

Other penalties could come into play but the sooner you sort things then less likely they are going to be an issue.

Millie_moo_muff

Dazed_and_C0nfused said:

Millie_moo_muff said:

Brie said:

If pension + side hustle is more than the tax threshold then tax needs to be paid on that bit.   

So I guess I’m going to get hit by late fees etc or is there a case that I’d misunderstood?

You cannot be fined for not filing a tax return you haven't been asked to complete.

When a return is issued you will have 3 months to file it.

But the payment date for any tax owed does not change so you could expect to be charged interest on anything paid late.

Other penalties could come into play but the sooner you sort things then less likely they are going to be an issue.

Thanks, I’ve calculated that it’s only this most recent year that I’m over the £12560 and I have plenty of time to square that. It’s really just trying to marry up qualifying for class 2 to fill pension gaps and the self assessment requirements. And of course the deadline !!