Speed of registration as self-employed for once-a-year job?
Comments
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The trading allowance may not apply though, as I already earn a PT salary in mt professional role.
For the benefit of all those who read this thread could you explain this?0 -
Yes, Dazed, I was thinking that the trading allowance might not apply to the money I have earned from the translation assignments, as it is in addition to my regular salary earned in my 'day job'; approx £18K as stated in the last paragraph of my opening post. It just seems strangely... generous, if so. At a brief glance, the trading allowance seems to refer to the first £1000 in a tax year earned from a service such as the translation assignment, but can it really be that this allowance remains in place if you already have another income, albeit unrelated? I hope that explains my uncertainty. I would obviously be glad to find I am wrong as it would make things easier.
In the meantime, the institution have put my invoice before a panel to discuss how to proceed with this anomaly. They have suggested entering a 'person number' as opposed to a 'business number' , so will offer my NI number and see if this will suffice.
Thanks again for checking in.0 -
the allowance is explained in the link you have been givenAt a brief glance, the trading allowance seems to refer to the first £1000 in a tax year earned from a service such as the translation assignment, but can it really be that this allowance remains in place if you already have another income, albeit unrelated? I hope that explains my uncertainty. I would obviously be glad to find I am wrong as it would make things easier.
it is available to anyone who is "trading"
it does not matter what else you do, including having a full time or several part time employment roles
it applies only to income earned whilst "trading", not to income from employment roles
as a self employed translator you are, in principle, undertaking a trade activity, and so the trading allowance is available to you, even if you earned a £50m salary as a CEO of a blue chip company but did translation work on the side in a self employed capacity
in a nutshell:
£1,500 of income less £1,000 trading income = £500 taxable profit
tax payable
Employment
gross income from employment 18,000
less personal allowance 11,850
= 6,150 taxable employment income
that will have been taxed under PAYE so £2,130 income tax and £1,149 NI
leaving a net post tax pay of £14,721 (about £1,220 per month)
self employment
taxable profits £500
way below the NI threshold, so no class 4 NI payable and you certainly do not want to voluntarily pay Class 2 since you already get pension credit via your full time PAYE role
so tax payable 500 x 20% = £100
leaving a post tax profit of £1,400
total post tax income for the year 16,121 (about £1,340 per month)
but finally the bad news.
the trading allowance only commences from 6 April 2017
you have had self employed income for many years prior to that. Income you should have paid tax on, but the chances of HMRC enquiring into why you have suddenly appeared from nowhere with a £1,500 self employed income must be low as they have bigger fish to fry than you.0 -
For a one off annual income amount under a certain threshold (£2500 comes to mind for some reason) it is quite possible to phone HMRC to declare it and have them recoup it through your tax code. Your best bet would be to contact HMRC to discuss it.0
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00ec25 and Tarambor, thank you both very much. 00ec25, I read the information available, but just couldn't believe that it would be 'over and above' my salary. As I said, it is a significant amount to me, and for a portion of it to be effectively gifted to me through the allowance seemed unbelievable, which is why I couldn't quite take it in. Thank you very much for your detailed breakdown, I am amazed at the generosity of contributors to this forum; this is all a bit daunting to me, and it means a lot to be able to ask really basic questions and get such comprehensive (and comprehensible!) answers.
I will contact HMRC and see what they say, the option to have the adjustments made retrospectively through my teacher's tax code seems like a sensible option.
Thanks again!0 -
Don’t mention “self employment” when you speak to HMRC, just tell them you have received untaxed income for a one off piece of freelance income and ask if they can adjust your tax code.0
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