Tax on a One-Off Job?

Question

Im on a £22k full-time job but have just completed a private one-off job for which a cheque of £5k was raised. I received the cheque directly without going through payroll but want to know how I go about getting the TAX paid on this £5k? Can Inland Revenue do this for me?

Answer 1

hmmm normally you would register as self employed, but its really not worth it for a one off job.

what you can do, is contact the IR via the contact me page on www.hmce.gov.uk.

tell them exactley what you did and how much you have earnt, they will most likely send you a tax return form with employment pages so that you can put on there your employed earning and then include the £5k as other taxable income.

it will all get added into the total income for the year and then work out the tax on the 5k. which btw should be 22% = £1100

also bear in mind, you can offset any expenses you incurred doing this job, like travel, materials etc...against the £5k income so tax and ni would be less.

now as the tax return form will be for the 2007/08 year, the tax wont become due until 31 Jan 09 and as the amount is under £2000, you can ask for it to be coded into you tax code for your employment so you pay it off over a 12 mth period, this should be put into your 2009/2010 tax code.

they then may ask you to pay some national insurance on it too.

to be honest it is highly unlikely that the IR would ever find out about it unless they investigated you, but seeing as you are in full time employment, this is like 0.00001% chance of happening as they dont normally investigate employees unless the employer is up to something.

unofficially I wouldnt do anything about it, just bank it and move on, if anyone asks where you got it from, just say it was a gift or you won it in a private bet.

Answer 2

Yes you will have to pay Tax on it, but not until after the end of the Tax year.

As I recall, in the Personal Assessment form there is a section for 'other Income' (in addition to your main job).

Assuming the payment was in this Tax year (i.e. after 5 Apr 2007), you will need to fill in a Personal Assessment after 6th Apr 2008 and return it before November 2008.

Depending on how much you owe, Inland Revenue will either send you a bill or adjust your Tax Code for your main job (so you pay off what's owed gradually).

Answer 3

Register as self employed. Obtain a tax return for 2007/08. Complete the self employed section. Pay the tax.
At this level of income you are not liable for Class 4 NIC, but are liable for Class 2 as your earnings are over £4625.

Answer 4

Absolutely - phone the local office


It depends on how honest you want to be.

If, for example, you said it was a gift, then different tax rules apply.

If you shove it in your bank, its unlikely Inland Revenue would ever know

Answer 5

you need to register as self-employed. You local tax office will keep you right.