Declare freelance earnings?
Out of context: Reply #14
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- johnnnnyh0
You must declare it to the inland revenue. For small amounts, if you are on PAYE, they may agree to change your tax code and allow you to pay the tax that way. But probably not if the income from freelance work will be variable.
Your clients will be putting your invoices through their books therefore you may well be picked up by HMRC through their accounts. The radar is very low and I certainly wouldn't risk not paying tax on income. If you are caught they are allowed to assume your income, so they could say well you didn't declare 4K which we can trace to these invoices but we suspect you earnt 8K therefore we'll tax you on that and since you didn't pay up first time we'll add interest. Oh, and we need it within the next two weeks otherwise a fine, and yes, more interest.
It can get nasty and to be honest it is a simple thing to do. You earn money, you pay tax, that's the system.
By the way, I also believe you should pay tax since you will no doubt at sometime in your life use something that is paid for by the government. More importantly, though, if you are dabbling with freelance you need to do it realistically so that you can charge correctly and give yourself the right income for the work you do. If you don't do it now, you will have a rude awakening when you have to do it.
So today around 20% of your 4K belongs to the government but if you don't pay it you'll end up with a false sense of being well paid.
I sometimes make this mistake when I consider an invoice for a client including VAT - then I realise I will be 17.5% poorer once I've paid the VAT. It's good practice to keep an eye on the real bottom line as you will get a good sense of whether what you are doing is really earning you a proper wage.
Ring HMRC today - they will help you and tell you exactly what to do.