shim20
Established Member
im currently employed but he lets me use the workshop when i want to do jobs of my own, now what happens when it comes to tax? would i have to pay anymore, how much can i earn without declairing it? many thanks
ben
ben
a question for you all
- Thread starter shim20
- Start date
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Nicknoxx
Established Member
If you mean you're going to make stuff for money then legally you have to declare it on a tax return form. Everything has to be declared and you will be taxed on your total income. If you're paid cash and don't declare it you'll be breaking the law but it would be difficult to detect small amounts
You need to call your nearest tax office and ask for what you need. Used to be a form, but it's mostly online now, so they can tell you what you need to do. You just fill it in once a year when Adam Hart-Davis tells you on the telly. If you are going to be earning anything other than pockey money, it's a good idea to be safe. You don't want the taxman finding you owe thousands in backtax.
On the other hand, remember you can offset your costs like tools, sundries, lunch when away from your normal place of work, and petrol to travel to clients etc. I am sure you wouldn't claim anything which wasn't 100% kosher, but you are probably going to need a new laptop, and a decent phone to handle your new business - maybe even a camera to take pictures for your website, and a sat nav would be a handy business asset. Anything like that would come off your taxable income, so keep your receipts.
If you are employed as well you will need to complete the employed and self-employed sections, so keep your payslips / P60 from your employer. If you keep all your payslips, receipts, invoices and bank statements in one place, it will take you about an hour a year. (I have a different system which means I can do it in almost a week).
Also, just in case you do over the VAT limit (I think currently around 70k) then you really need to be clean on your returns. The taxman can fine you, but the excise guys can put you behind bars!
On the other hand, remember you can offset your costs like tools, sundries, lunch when away from your normal place of work, and petrol to travel to clients etc. I am sure you wouldn't claim anything which wasn't 100% kosher, but you are probably going to need a new laptop, and a decent phone to handle your new business - maybe even a camera to take pictures for your website, and a sat nav would be a handy business asset. Anything like that would come off your taxable income, so keep your receipts.
If you are employed as well you will need to complete the employed and self-employed sections, so keep your payslips / P60 from your employer. If you keep all your payslips, receipts, invoices and bank statements in one place, it will take you about an hour a year. (I have a different system which means I can do it in almost a week).
Also, just in case you do over the VAT limit (I think currently around 70k) then you really need to be clean on your returns. The taxman can fine you, but the excise guys can put you behind bars!
Dibs-h
Established Member
drillbit":25rauirq said:
IIRC - Tax evasion is now a criminal offence - something it wasn't until a few yrs ago.
9fingers
Established Member
I agree with all the above but the unusual thing about this case is that there is an inherent value of being able to use the workshop free of charge.
If you end up doing any quantity of work for yourself, then it might be an idea to pay a token amount to your employer for the use of the shop which turns it from an unknown value to a legitimate expense that you can put on your self employed part of the tax return.
If you are using your own tools then you can write down the value of these by a percentage each year and charge this as a capital allowance. Look up capital allowance on the HMRC website for details and the rates allowed.
Bob
If you end up doing any quantity of work for yourself, then it might be an idea to pay a token amount to your employer for the use of the shop which turns it from an unknown value to a legitimate expense that you can put on your self employed part of the tax return.
If you are using your own tools then you can write down the value of these by a percentage each year and charge this as a capital allowance. Look up capital allowance on the HMRC website for details and the rates allowed.
Bob
studders
Established Member
Also a good idea to check the OP post date. :lol:
9fingers
Established Member
studders":thf3qzeh said:
Very True!
At least I was not the only one to get caught!!
Bob
studders
Established Member
Makes a change for it not to be me Bob.9fingers":1qrmz4kh said:
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