Declare freelance earnings?
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- ihavenomouth
So I've got about £3/4k of freelance gigs in the pipeline over the next few months.
Should I be going legit and paying some taxes... or keep it under the radar... at what point does it start getting risky... none of the jobs will be paid in cash sadly :)
If I could claim back some vat on a new Macbook I would be well up for it.
- Soler0
Most likely the companies paying you are claiming it on their taxes, so you should be reporting it now.
- digdre0
yeayea.. clients...
*sigh
- brains0
And if you do get a new macbook, and want to be really cheeky, lease it. You can write off the entire payment rather than just a percentage of the full sale. Once it's yours (after the 1 - 3 year term) sell it to yourself for $10, then flog it on craigslist for $1000.
- JamesBoynton0
Ah, you are in the uk.
Maybe just become self employed, real easy to do and although the tax return looks like hell its pretty simple as a lot of it doesnt apply if you are only making a few k.
You can put you macbook through the book as an outgoing. First you have to say how much is for work and private, then in the first year you can put 50% through as an outgoing and i believe 25% for the next 2 years.
- ihavenomouth0
Yeah I'm in the UK... still got a full time job as well though!
- marchelo0
I'm in NYC, not sure how things work in the UK. But I'd suggest paying taxes, especially if you're going to be paid with a check. If you decide to go freelance fulltime down the road it'll help you out. The gov't can go after you if they ever want if you don't do it "right" the first time around... trust me, you don't want to pay back taxes and fines.
- if you're making low wages and you know you'll double or more later it's cheaper not to pay taxeszarkonite
- JamesBoynton0
ihavenomouth, i have a full time job too and am still self employed. Its worth doing.
- smellvetica0
Just notify the HMRC that you have another job, fill in an annual self-assessment form online. Job done. Also you'll more than likely get tax credits as you have two jobs best be honest about it, you can't escape death and taxes, also you can claim expenses incurred etc.
- kezza_20
I've always kept the shit on the side under the radar.
I did 8k on the side last year. Nothings come back to me yet. Hoping the Inland Revenue aren't reading QBN
- edsplace0
can anyone give me an ABC of tax returns for the uk... i've earned a lttle this year and haven't touched the money yet for fear of a tax bill!
where do i get it?
how do i register?
will i need a maths degree or an accountant?
- Nightshade0
I am from the UK and in the exact same situation. I only do around £3k/year so choose to keep it under the radar, however if I were earning more I think I would declare it.
- mutanthands0
if the amount on the side is under £5k, then i wouldn't worry.
In regards to buying computer equipment, they've recently changed the laws. Now if you buy a macbook, you can claim it all back in that year. Sweet :)
- 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.
- johnnnnyh0
I bet they do. They're not daft and the government needs all the cash it can legitimately get at the moment without changing legislation.
- Raniator0
if it goes through their books, it should be going through yours...
- SkyPoo0
ihavenomouth,
If the companies you are freelancing for are legit businesses then they shouldn't even be paying your bill without getting your tax reference number up front. The Inland Revenue will punish them at their next tax inspection, and you would then be in the shit once your client/s are forced to reveal you. You would then be done for tax evasion... that is treated very seriously and not worth the couple of hundred quid taxes you feel you might be getting away with at the moment. If you are in full time employment as well, then I think you just add your freelance as additional income on your next P60.
As for claiming the VAT back on a Macbook it doesn't work like that. You can't claim VAT back until you are VAT registered, and you don't become VAT registered just to process a few k's worth of freelance - its more complicated than that imho.
- chrisRG0
I got a question about something related to this...
I'm not in UK right now, but I do Freelance for UK agencies and they usually pay me with bank transfer, although my bank account is in UK my invoice address is brazilian. Do I need to pay any UK taxes, of course I'm paying some taxes down here.