Hi,
I phoned the tax office today, as I am just about to embark on this money making journey and wanted to make sure I had everything in place! I am employed full time, but wanted to make sure if I earned anything over and above this I was abiding by the correct tax rules. As I've never been self-employed before I was informed:
Earnings up to £1,000 in a tax year do not have to be declared or entered onto a self-assessment. However, this is INCOME, not profit.
If you earn between £1001- £2,500 you have to become self-employed but they can take the tax through changing your PAYE code rather than you having to do a self-assessment if you want. You can then deduct tax allowable expenses before tax.
Anything over £2,500 needs to be done via a self-assessment.
I'm not worried at the moment, as with a busy full time job - I doubt I will earn more than £1,000, but will keep records regardless!
I did have a couple of queries though, if anyone on here is familiar with this:
- For mystery shopping, you often get reimbursed for goods and then are paid a small fee. Does anyone know if the reimbursement is a tax allowable expense if you are allowed to keep the good? (I know that this would only apply if I earn more than £1,000 per year, as otherwise would need to count it).
- If I earn less than £6,205 per year from my self-employed work, I presume I don't need to pay any class 2 national insurance contributions (even though I earn more than this in my employed work which I already pay class 1 contributions on). I'm just making sure they are treated in isolation.
Thanks everyone!
