iPhone X review
I am about to start off a new website. my website designs website for other people. However I have heard from friends that i cant sell website as i have not declared anything to inland revenue. All i want to do is earn some money in my spare time.
Is there anyway in earning money with out having to do anything else then make my site?
Ben's right - you have to declare it. If you don't and you get caught you will end up paying far more than the tax you would have to pay on your earnings.
Are you hoping that the business will take off and make you a lot of money? If so then you will have to do it the right way from the start which means informing the tax office before your business starts up, keeping accounts, getting receipts (and storing them) and filling in a self-assessment tax return every year. Of course you also get to claim the cost of the website as a business expense.
You also have to pay extra National Insurance - even if you are already employed and paying NI (however if you make less than a certain amount you can claim the NI back).
If you really only intend to make a bit of extra cash then, in my experience, it isn't worth the hassle.
If you have a source of income then as Ben points out you need to declare it to the Inland Revenue. I was in the same position as you a couple of years ago and so registered as self employed. I filled in a form and got low earnings exemption on NI contributions (because I don't bother doing much). The only thing I now end up doing is a Self Assessment form once a year.
One way to avoid this is to do your work as an exchange of services. I do some work for a car dealer so I fix his computers and he fixes my car. No invoices/money means nothing to declare. It is the same principle as behind schemes like "LETS" where you earn points from doing things for one person and can spend them with anyone else in the group. Goes back to the days of bartering really.
Unless you are earning loads then you are unlikely to loose out on much cash. Be warned, should the Inland Revenue find out you are working and they don't know about it they will chase you down.
no i dont have a source of income, im still a college, i just want to do this in my spear time
Then this work would be your source of income. Providing you don't earn more than about £4500 a year then you won't paying any tax, and if you are under 16 you won't be paying NI (how old ya have to be to get to college these days?). If you aren't going to be earning more than an average of £70pw or £300pm then I think you can apply for low earnings exemption on NI contributions.
Believe me you don't want to get into trouble with the tax people at such a young age!
click here and start reading! Sorry someone should've given you this before!
Following on from Sir Radfordin's comment, to ascertain the exact amount you can earn before tax, you need to know your tax code.
For example, if your tax code is 451L then I believe that you are able to earn £4510 tax exempt.
Any money earned after that amount will be taxable.
I THINK that's how it works anyway? Gives you a rough idea!
There are no age rules as to when a person has to start paying income tax. If you are earning - you have to pay the tax. For the tax year 2003/2004 the personal allowance (the amount you are permitted to earn before paying tax) is £4615.
If you start any business at all you will be well advised to begin keeping records of your income and expenditure. It doesn't take long to exceed the personal allowance figure, and you'll have to produce a set of accounts each year if you're self employed. Ask your parents to help you in this, id necessary by talking to an accountant - you're too young to be seeking advice solely from an Internet forum, and we aren't qualified to provide anything more than very basic financial advice to anyone.
If you earn less than this £4615, then you dont have to register with IR, Companies House, etc?
On the condition you are under 16?
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