Tax Worry / Problem!

henry01

Hello, I have a problem relating to my tax and was wondering if any of you kind folk cud give me some advice....

I am a student and therefore pay low tax, I work part time and this job has my main tax code.

I am also a part time actor and have a agent, all the money I get paid from them is self declair as they do not inform the tax man, however I recently was taken onto a large TV company payroll and they have sent me letter informing me that:


As required by law this amount, £1,360.04 , will be notified to the inland revenue. However, you are legally obliged to notify the inland revenue yourself


I have not informed the inland revenue I am working for this company at all, what will they do?
Could they fine me?
How much tax will I owe?
Does this simply mean they will declare their payments not my earnings?

Any help would be v.v.v.appreciated!

Elaine_Wilson

I think when the TV company say that you are legally obliged to notify the Inland Revenue they just mean that the amount should be included in your self assessment tax return. They seem to be covering themselves in case you took their first sentence as meaning you didn't have to include it.

The Revenue regularly asks companies like this for details of payments made to self employed persons. They then try to cross reference this info with the person's tax return.

You do not have to notify the Revenue that you are working for that company but I assume that you have already told them you are a self employed actor?

If not, and you started more than three months ago then you could be fined.

The tax due will be calculated in the same way as that on the income received via the agent. That is, gross income less allowable expenses. (There are lots of threads discussing what expenses can be claimed)

The actual amount of tax will depend on the amount earned in your part time job.

The easiest way to calculate it is to add up your taxable income from all sources (after deduction of the expenses). Then deduct your personal allowance (£4,895, I think).

The next £2,090 is at 10% and then it is 22% for quite a lot.

Having got the total tax liability just deduct that taken by your employer.

If your self employed income on its own exceeds £4,895 in the year then a further 8% of the excess is due for Class 4 National insurance.

Hope I've uinderstood your question correctly and that this helps.

henry01

Thank you for your help!!

Firstly i have to admit to not informing tax man, I did not fully understand I had to or how to. I have been working with the company and my agent for a year or 2, so can i assume I will be fined?? If so how much, can i plea ignorance? Is it better to pop to my local office and explian everything now or wait for them to contact me?

Sorry for all the questions, your very kind for helping!

Murtle

Sorry if I have misread this, but have you not paid any tax on your earnings over the last two years?? if not, I would really get in touch with the IR and try to resolve it. Can you prove the work you have done and when and for how much? Did you invoice them or how was it agreed to be paid?

Depending on your earnings you could get a tax bill and potential a fine for not informing them (if they also decide that you are "self-employed"). I assume they stick to their rules?!

Try looking on their site for further info, or to find out who to speak to. The people I have spoken to at the IR have always been helpful and friendly so they should be able to help you.

http://www.hmrc.gov.uk/startingup/selfempl.htm

Good luck

sneekymum

No - don't wait for them to find you out...

Bordera

henry01 wrote:

I am a student and therefore pay low tax, I work part time and this job has my main tax code.

If I understand correctly you are
1. A Student and
2. You have part time job where your pay has tax and National Insurance deducted before you receive it and
3. You also have some self employed income as an actor.

Firstly, double check to make sure that the £1,360.64 you got from the TV company was not already taxed.

There are special tax rules for actors and many theatres and TV companies are made to operate Paye As You Earn. The amount you mention is not a round figure so presumably something somewhere has been deducted from it?

Once you have done this follow Elaine's advice and do the calculations. When you calculate your earnings please remember to base your income on the total amount you were entitled to, your agents commision is then deducted as an expense. This seems a small point but it is very important and one of the ones that causes the most trouble.

The fine for not telling the taxman you are self employed is £100, BUT if you were also doing your part time job and paying National Insurance there, you might not have to pay a fine, especially if your earnings from acting were very low.

Find your nearest Inland Revenue Enquiry Office and go talk to them once you have collected as much information together as you can. I'm sure you will find them understanding and helpful.

Cook_County

I don't want to sound cheeky, but you won't find the Inland Revenue because they don't exist.

I'd suggest you take a look at the link on the HMRC website for registering as self-employed which can be found here:

http://www.hmrc.gov.uk/selfemployed/iwtregister-as-self-employed.shtml

henry01

Thank you everyone for all your help!!! I am going to sort it all out next week, once again thx!

Bordera

Cook_County wrote:

I don't want to sound cheeky, but you won't find the Inland Revenue because they don't exist.

I'd suggest you take a look at the link on the HMRC website for registering as self-employed which can be found here:

http://www.hmrc.gov.uk/selfemployed/iwtregister-as-self-employed.shtml

True Cook_County but as the change is less than 3 months old, most people still relate to the Inland Revenue and not HM Revenue and Customs yet.

Web Links etc still find the right site if the old terms are used.