Self Employed - Earning Approx £4000 a year?
Having just finished school, I have decided to undertake some property maintenance work for 2/3 different people within my local area. I have agreed to work for £50 a day + materials cost. I have recently (last week) declared myself self employed.
I have a few questions for you guys.I'm not going to be making huge amounts of money (am only planning on working 3 days a week at the moment whilst I learn to drive and do some of my other non money making interests (watching football games live)
Question 1) I'm going to be paid mostly in cash, I will happily pay this in my bank account. But will the HMRC wonder what I do when I'm not working? Earning approx £5000 a year must make them think I'm earning more and just not declaring/ accounting the money?
Question 2) The work I'm undertaking for the next few months is for the same 2 elderly pensioners one of which is my grandmother who has asked me to work 1 day a week for her for until all her work wanted to be done is done (could take months) are the HMRC bothered about this? Or are they happy aslong as all the money earnt from whoever is properly accounted for?
Question 3) one of the elderly women has requested she buy all the equipment for me so she knows what she is paying for. (She only wants to play my labour time basically) on her invoice I give her, and the one I keep for myself do I just put labour time and that's it. Would this be acceptable to the HMRC? Or are they expecting to see a long list of things I purchased to do the job?
Question 4) on my tax return in April, is there any point in claiming expenses if I don't earn over the personal allowance amount of £8000? On my tax return would I just fill in my earnings for the year say £5000? Would there be any point claiming tax expenses when I wouldn't be paying any tax in the first place? In which case, is there any point saving receipts for the odd pots of paint here and there?
Thanks for reading! I look forward to your answers!
Thanks for your answers already!
Some more info....
I have only just left school, and picked up bits of 'Handyman work' from my father whilst I was in my teens. I am not looking to do this sort of the thing forever, but for the meantime to make some cash it would be useful. Especially since jobs where I live are very hard to come by.
I have already applied for Self Assessment online with the HMRC, Last week. I have never filled out a self assessment form my first I imagine will be in April. I live at home with my Mother, therefore costs are relativly low, and being able to make 4-5,000 a year would be enough to be able to save some money up for a car etc.
Am I doing everything right so far? I have my first 3 days of work lined up for this upcoming week. I plan to invoice my customers monthly as this is what they have requested. I will keep my receipts for anything I purchase for each job, however as i've already mentioned I doubt I will earn enough to get anywhere nea
Petrusclavus - As I have already said, I plan to only work 3 days a week. I have lots of other hobbies and other things I need to be doing (Learning to drive etc) In addition to that, Without advertising I doubt there would be that much work going around. the 2/3 people I plan to do work for are either family or friends of the family. Obviously I want everything to be legal and abvove board. Even though I know alot of people who do this sort of thing on the side and don't declare a penny.
- !Lv 77 years agoBest answer
Have a look at http://www.hmrc.gov.uk/selfemployed/tmastarting-up... to check you are staying on the right side of the taxman.
- 7 years ago
Keep proper books. If you don't know how to do it, there's plenty of information on the Internet. You can always use some simple accounting software. Register as self-employed with HMRC but apply for the small earnings exception so you don't have to pay National Insurance contributions http://www.hmrc.gov.uk/forms/cf10.pdf When you come to complete your self-assessment return, you show your total income, your direct expenses and your overheads. That will give a net profit figure. Provided that's less than your personal allowance, there's no tax to pay.
It's always worth doing things properly even if your earnings are small. That way HMRC see you as one of the good guys and will be helpful if things go wrong. It will also give you some bookkeeping experience which will look good on your CV. And who knows - you might suddenly come across an opportunity to make a lot of money and you'll have a business framework in place to deal with it.
- Enough TrollsLv 77 years ago
You (along with all of the others) will be "risk assessed".
You MUST be registered for Self Assessment, you are advised to have a separate business bank account.
1/ Risk assessment includes the question of realistic income - what the hell are you living on?
2/ We do not see who your customers are unless we investigate.
3/ You are not expected to itemise expenses - one figure only goes on the tax return - so now we know you have never seen a tax return.
4/ No expenses - well add another few points to your risk index. If you do not have receipts and you get reviewed then you are in a world of grief if you have claimed expenses.
Please pay all cash payments into your business account - this is the best record system to show an investigator.Source(s): £50 a day = £250 a week, say you work 45 weeks a year = £11250, personal allowance 8k = 3k taxable = £600 tax bill plus NIC. Fine, I recomend you activate your on-line account once you have your UTR. the software is free,public liability insurance might be a good idea as well.
- 7 years ago
Tax questions have been answered fully by people more knowledgeable than I am.
I would like to remind you to have insurance against injury when you working or causing damage damage to customers property. I'm sure you are competent and careful but accidents do happen.
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- GerLv 44 years ago
Good for him I am not going to hate. Manchester United only give such a lucrative contract to players that are PROVEN not saying Lucas Moura will NOT in the future be worth that salary but this is football SPORTS full stop! Big salaries are part of the trend!