Side Hustle Questions

MillsBills21

Hey all new to this forum so apologies if it’s already been answered but can’t find it anywhere. I’ll write a long version of my issue and a shorter one in bold at the bottom.

Basically I’m a girl and decided to start making a bit more money on the side to fund my hobbies so I can still regularly put money aside for me and my boyfriends first house together (my hobby can be fairly expensive & don’t want to impact our house saving). I don’t think talking about this would be banned but I’ll not outright say what it is I’m doing just in case, I effectively sell images & used clothing to guys for money, if you catch my drift. It’s maybe not the most ethical way to make some extra money but I seem to be popular and have earned a lot from doing this. The problem is, I don’t really want my boyfriend & family to know about this. I don’t know if he’d have an issue with it but I’d just rather he didn’t know. I’m not looking for relationship advice so please don’t tell me I’m either a horrible person or I should just tell him what I’m doing. I understand if you go over £1,000 in earnings you need to file a self certification form or something to be taxed on this. I’m wondering if this applies to me, i have read conflicting information about selling your clothing online and the line becomes a bit blurry when it’s of this nature. I guess I could be buying and selling for profit but I genuinely use the ‘items’ i buy for weeks before I sell them, I don’t just buy a load in bulk and sell them straight away. I was wondering for some advice on how the rules apply to me & what sort of information needs to be filled out on these forms. I obviously operate under a fake name so for a start don’t know how I’d complete the form and again not wanting my boyfriend to find out might possibly be an issue with this. I’ve been speaking to some friends who do similar and are earning well above the limit but have not had any surprises from HMRC yet, don’t quite understand how they’re getting away with it if they’re maybe using a loophole of some sorts but it’s been couple years for some of them and they’ve had nothing so possibly is a legal way to do it? 

I sell my used ‘clothing’ and images online under a fake name and I am wondering how the tax rules apply to me or if they do at all. Friends that do similar have done this for years and earned well above the limit yet never had any HMRC messages so wondering if there’s a legal way to do this. I operate under a fake name & not keen on anyone finding out what I’m up to (friends & family not HMRC) so was wondering what is involved. 

Also, would this sort of thing come up when me and my boyfriend apply for a mortgage? Meaning would they mention it if I stick to earning under £1,000 or if I begin to go over it.

Any help would be appreciated guys thank you x

gwynlas

I don't think that you are likely to get any genuine responses on this forum and why are you bothering to risk your relationship if you can only earn upto £1000?

One way to maintain anonimity would be to set up a limited company and pay tax on earnings, presumably if you speak to an accountant they would give you an idea of allowable expenses and the benefits of paying yourself a dividend.

MillsBills21

gwynlas said:

I don't think that you are likely to get any genuine responses on this forum and why are you bothering to risk your relationship if you can only earn upto £1000?

One way to maintain anonimity would be to set up a limited company and pay tax on earnings, presumably if you speak to an accountant they would give you an idea of allowable expenses and the benefits of paying yourself a dividend.

Like I said, not here for relationship advice. Thanks for the second part though

QrizB

While you trade under an assumed name, your platform should have verified your genuine details when you signed up. Similarly with your payment processor.

You should assume that these details will be passed back to HMRC and they will eventually pursue you for your taxes.

I would suggest that you need to treat this business as a business and register with HMRC for self assessment. You're currently a sole trader and will have earnings and expenses, like any other sole trader - plumber, electrician, painter, whatever. Keep your accounts, file your tax returns and no-one will bother you.

If your business grows enough you might want/need an accountant. Exactly when this stage is reached will depend on your own aptitude with business admin and whether you feel time spent manipulating spreadsheets would be better spent in your main occupation.

Whether you divulge this business to friends and family or not is your decision. Only you can judge whether it's a secret you can successfully keep indefinitely. But if you're going to keep it quiet, you'll need to tell HMRC now as I imagine it'll be harder to dodge awkward questions when the tax man comes for his money later.

soolin

Your work seems to fit the badges of trade required by HMRC , and indeed I know others who do this as a business and who declare as a sole trader to HMRC. As soon as your turnover, that’s total income, exceeds £1000 in any tax year you should register with HMRC . 

Depending on where you sell, most sites will declare income automatically to HMRC at 30 sales or Turnover  of £1700 , and you would be required to identify yourself and provide your NI number as well. O

LITRG

Hi MillsBills21
We have guidance on our website about what you may need to consider when you first start self-employment: https://www.litrg.org.uk/working/self-employment/self-employment-guide and you may also find our guidance on selling online useful too: https://www.litrg.org.uk/working/gig-economy/online-traders-and-using-platforms 
Hope you find this helpful.

Potbellypig

There's no ambiguity. It'll fall under any other income you may recieve

ChadValley

If it's classed as a buisness you will be able to claim expences, which can include a percentage of house bills,
20% of £1000  is £200 if you operate at your current level I would send them a letter stating what you are doing and your income and expensives. They will then sort it out.   

magicmoneyportaloo

A few thoughts:

• If you earn under 1k self employed you don't need to tell HMRC. 1k and over you would need to tell HMRC by registering as self employed and be taxed on that income as you would be over the trading allowance. You would need to use your real name but HMRC won't share it publicly.
• If it puts your mind at ease, you can register with HMRC on the gov.uk to receive communications with them by email rather than post if you have an online tax account. I would hope your boyfriend wouldn't be opening your letters anyway.
• Be careful with bank accounts and platforms because many banks are difficult with spicier influencers especially with more niche topics. Speaking of niche topics, make sure you check the policies of the platform you are on because many have policies against niche topics.
• I understand that you don't want to discuss your relationship on MoneySavingExpert, but there are forums for influencers of this kind of thing, and it would be worth chatting on those forums.

saajan_12

MillsBills21 said:

I understand if you go over £1,000 in earnings you need to file a self certification form or something to be taxed on this. I’m wondering if this applies to me, i have read conflicting information about selling your clothing online and the line becomes a bit blurry when it’s of this nature. I guess I could be buying and selling for profit but I genuinely use the ‘items’ i buy for weeks before I sell them, I don’t just buy a load in bulk and sell them straight away. x

The sale part is clearly for profit, regardless of what you've done with the items beforehand. So its actually in your interest to say the purchase was linked to the sale as then you can deduct the cost of the clothing as expenses. Eg say you sell for £20 and bought for £2. If you say the purchase was in order to sell then profit = £18 (vs £20). 

MillsBills21 said:

I’ve been speaking to some friends who do similar and are earning well above the limit but have not had any surprises from HMRC yet, don’t quite understand how they’re getting away with it if they’re maybe using a loophole of some sorts but it’s been couple years for some of them and they’ve had nothing so possibly is a legal way to do it? 

x

That's akin to speeding on a road which happened to not have police with speed guns.. doesn't make it legal nor does it mean they won't get caught next time. 

Re how: HMRC audit a selection of tax returns, and many of the sale sites are being targetted and required to share their sellers. You'd have to give your actual name somewhere to receive the money to your bank account, even if your public facing name is fake.