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    • musician1990
    • By musician1990 6th Sep 17, 11:59 AM
    • 2Posts
    • 0Thanks
    The time in between PAYE and S/E
    • #1
    • 6th Sep 17, 11:59 AM
    The time in between PAYE and S/E 6th Sep 17 at 11:59 AM
    Hi there,

    I have a fairly unique scenario I think; i've read through a whole bunch of different threads here, and couldn't source an answer. Apologies if i've overlooked this elsewhere.

    I left my full time employed role in August 2015 in quest to put myself in a position to become a full time musician. (yes, haha...)

    I was in a lucky enough position to be able to live with family on no income at this point, to start up and network etc etc.

    I made little to no money in this period, apart from a few performance fees here and there. Some cash, some BACS.

    I am now to the point where I am starting to make money from all of the work i've put in. I am now teaching music lessons privately, and doing a fair amount of performances. I am looking to register as S/E starting in this current tax year.

    If I register now, what do I need to do about the small amount of income I made in the past (when I didn't consider myself "self employed"). I guess i'm referring to the money earned between August 2015 and April 2017.
    I'm worried that the HMRC are going to question what I was doing in the interim between becoming unemployed, to registering for self employed. The money earned is small, maybe in the region of a couple of thousand pounds.

    Also, I am interested in working out what I can balance against my tax return... i.e. equipment, travel expenses etc etc.

    Can someone explain what will be asked of me when I do this all. I understand I have to get registered before October (5th?).

    Ideally would like to save the money that would be spent on an accountant, as i'd like to do it all myself!

    Thanks in advance.
Page 1
    • 00ec25
    • By 00ec25 6th Sep 17, 12:36 PM
    • 6,634 Posts
    • 6,211 Thanks
    • #2
    • 6th Sep 17, 12:36 PM
    • #2
    • 6th Sep 17, 12:36 PM
    the key point is HMRC can only penalise you if there is tax to be paid. If there is no tax then there is no penalty as it is based on a % of the tax due, so:

    in tax year 15/16 you were in PAYE until Aug 15. From Aug 15 to April 16 you received small sums of money through your "few performance fees here and there. Some cash, some BACS." Two crucial questions:
    - How much was your total gross income (before PAYE tax), and including your other income, for that tax year? If more than the personal allowance then you should have declared it and paid the tax on it, so you could be penalised for that year.
    - Did you claim a refund of tax paid under PAYE? If yes then your final tax liability may include an element of having to repay that refund.

    you did receive income upon which tax had not been deducted but you will only be penalised if you actually owe tax on it. The personal allowance for 15/16 was 10,600 so what your your gross income that year (allowing for any tax refund if applic)?

    in tax year 16/17 it appears your only source of income was through your "few performance fees here and there". Same principle, what was your gross annual income given the personal allowance was 11,000

    in tax year 17/18 it appears "I am starting to make money" so you MUST register for self assessment by 5th Oct to be on the safe side as presumably you expect to earn more than gross 11,500 this year?

    sorry but there are loads of webpages listing the myriad of facts you need to know about how self employment and tax works. There is no point writing it all out here.

    start here:
    Last edited by 00ec25; 06-09-2017 at 12:45 PM.
    • musician1990
    • By musician1990 6th Sep 17, 12:43 PM
    • 2 Posts
    • 0 Thanks
    • #3
    • 6th Sep 17, 12:43 PM
    • #3
    • 6th Sep 17, 12:43 PM
    Thanks for your reply - most of it was really kind and helpful.
    • Suarez
    • By Suarez 6th Sep 17, 2:51 PM
    • 945 Posts
    • 613 Thanks
    • #4
    • 6th Sep 17, 2:51 PM
    • #4
    • 6th Sep 17, 2:51 PM
    Just thank you? Someone takes 5 minutes out of their day to help, then you ignore the questions because (presumably) you don't like the answers...?
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