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On asking me to call a ceilidh... - Sally's Journal
June 6th, 2012
10:19 am

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On asking me to call a ceilidh...

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From:cartesiandaemon
Date:June 6th, 2012 09:36 am (UTC)
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*hugs* Ooh, FAQ :)

FWIW, from what I remember, I think you were very good at being clear (including understanding what people who've been dancing for <50 years may need defined occasionally) for comparative beginners, funny and non-pushy, but I obviously can't speak for how good you are at choosing dances, not making mistakes, etc :)

I don't think I'd be comfortable just taking money for calling in cash and not paying tax on it.

I really should know the answer to this question. In fact, I hate paperwork and am really awful at being organised, so I've no idea. But I thought there was in fact some lower bound on what you pay tax on specifically so that if you get £100 for a one-off thing you don't have to fill in a whole pile of forms? But surely someone here knows, lots of people do freelance stuff (music, programming, etc) -- it seems worth finding out so you don't have to worry about it, because it's bound to come up in our lives occasionally.

(FWIW my assumption is that you can be reimbursed for expenses and that doesn't count as being paid, but gifts DO count at their market value, but as I say, there may be exceptions where you don't have to count them. But obviously, you shouldn't listen to random guesses, you should wait for someone who actually knows :))
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From:atreic
Date:June 6th, 2012 09:48 am (UTC)
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Yes, one of the things I hoped might happen if I made this post would be that someone who knows all about the money already might come and explain it to me. I know that travel expenses are tax exempt, because I had to find that out for work once.

[But clearly 'please give me a bottle of booze because I can't be bothered to work out how to pay tax' is a very mild version of 'please pay me in cash so I don't have to pay tax', and given I'm rich enough to be able to afford the principles I should try my best to have them...]

Thank you for the kind words about my calling!
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From:crazyscot
Date:June 6th, 2012 10:23 am (UTC)
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HMRC allow you to declare casual or freelance income without treating it as a full self-employed business. There are boxes on the tax return form to declare the total such income, allowable expenses, and any tax already paid there (as well as wanting a description of how you earned it).

There are some fairly strict rules surrounding what expenses are claimable. Travel expenses are usually OK, as long as it was money you spent solely to allow you to earn the income and not for other purposes (e.g. visiting a friend - that's a well known loophole, now closed). Boxes 16 through 20 on the main tax return form SA100 refer, along with the attendant guides on filling it in. It is imperative that you keep documentary evidence of your expenses in case you are audited (e.g. receipts for train tickets, journey/mileage log if you drive); you'll need to hang on to these for up to 7 years.

I suspect that if your earnings are more than a small amount (I know not what this mystical threshold might be) they'd want you to declare them as self-employment income, but in a sense that'd be a nice problem to have.

In the first instance you should either write to or ring HMRC to tell them you have received freelance income that is not fully taxed at source in a particular tax year. (You can do this as soon as you've earned the income.) They will probably respond with a form letter telling you they are going to start sending you tax returns. They may also want to know in advance how much you think you will earn this way, so that they can start assessing you for provisional tax; if so, that's tax paid up front which works itself out after the end of each tax year when you send in the return.
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From:atreic
Date:June 6th, 2012 10:40 am (UTC)
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You see, this comment entirely convinces me I should not take money for calling.
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From:robert_jones
Date:June 6th, 2012 11:18 am (UTC)
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It really isn't that hard. I used to do it with money I made from playing the organ: you just fill in a box saying you made £X from casual income, and put a note to say that it is from occasionally calling ceilidhs. I would just not claim any expenses: the worst that will happen is that you'll pay more tax than you need to.
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From:atreic
Date:June 6th, 2012 11:45 am (UTC)
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Surely I could avoid the expenses question by, eg, if I was paid 50 quid to call a ceilidh and also given 41.23 for the cost of my train ticket, just putting 50 quid in the box? Or would that be Bad for some reason?
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From:robert_jones
Date:June 6th, 2012 03:03 pm (UTC)
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Well, yes, it would be a fraud. The correct position is that you have informal income of 91.23, with associated expenses of 41.23. You're not under any obligation to declare the expenses, but you are obliged to declare the full amount of the income.
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From:atreic
Date:June 6th, 2012 03:09 pm (UTC)
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If someone gives me 30 quid as a wedding present, is that informal income? I have hazy ideas that if it's a Huge Gift, and they die within n years, then it's a problem and I have to declare it. But that generally people can just give me money as a present and that's OK?

They really ought to teach this kind of thing in schools...
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From:robert_jones
Date:June 6th, 2012 03:13 pm (UTC)
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Gifts are non-taxable. You are right that if the gift is over a certain threshold (£1000 for wedding presents and £250 otherwise), and the donor dies within 7 years, inheritance tax could potentially be due.

Edited at 2012-07-26 07:30 pm (UTC)
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From:toothycat
Date:June 6th, 2012 05:42 pm (UTC)
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When I asked the tax people if I should be paying tax on the comics I sell, they asked me about my profit, which (when expense of attendng events, paying for tables and comics etc) was negligible to negative. Then they said I didn't need to bother. So it might be worth just phoning and asking them.

Sadly, I also do workshops for which I invoice people, and that does require me to declare self employed. Even though I still make a loss overall...
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From:simont
Date:June 6th, 2012 11:02 am (UTC)
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HMRC allow you to declare casual or freelance income without treating it as a full self-employed business. There are boxes on the tax return form to declare the total such income, allowable expenses, and any tax already paid there (as well as wanting a description of how you earned it).

That's interesting. When this happened to me a few years ago I found various boxes on the tax return that looked possibly like what you're describing here, but none of them seemed to be clearly applicable based on the detailed wording, so I gave up and phoned HMRC's helpline. I described the facts of the case and asked how I should translate them into tax-return-boxes, and they told me I should do a full-on self-employment page, so I did that (and – possibly as a result? – paid NI as well as income tax on the money).

Perhaps they told me that because the money in question was a little more than we're discussing here. (I can't remember whether I actually told them how much it was when I rang the helpline. If I didn't, then perhaps they told me that because it was the safe option if the amount was uncertain...) But if there is a box I could have used legally with less hassle, then I'm faintly annoyed that I didn't manage to find that out and do it!
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From:crazyscot
Date:June 6th, 2012 07:51 pm (UTC)
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The forms and associated wording do, of course, change over time. The position for NI for the self-employed (as of maybe 2-3 years ago when I last looked into it) is that you can be exempt if your self-employed earnings are less than a certain threshold (conveniently nearly-aligned with the personal tax allowance).
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