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Paying tax for Self employed

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Hi there,

Needing some help. I've been selling plants on a market stall for a few years now as a hobby, but haven't been registered as "Self Employed" as my profits have been well under £10000 so no tax needed to pay, so haven't been submitting self assesment or "doing the homework". (I know, I really should have done this anyway..) It's seasonal aswell, so only for 3 months of the year or so.

I'm expecting a huge increase in demand soon with the current situation and extend the range of months too and therefore hitting a profit which then needs to be taxed/NI How best to go about this? Will HMRC deem that I have been unlawful and hit me with fines and penalties for the previous years? I also have a garden for these plants, so hopfully will open this up as a garden centre too with the current demand.

Many thanks for your help,

Dan

Replies (16)

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By Accountant A
15th Jun 2020 20:17

[]-ih

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Replying to Accountant A:
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By DJjt
24th May 2020 15:24

Many thanks for responding,

Apologies, that was a typo. The profits are below £10,000. And not so sure, as I have sales invoices for the stock bought and takings for the day. Is that deemed acceptable?

I believe once your income is more than £1000 you need to declare and run self assessment even if you're not earning a profit? So was wondering now if expected to earn a profit once I've set up as self employed would I get in trouble for previous years that I haven't been self employed that was running without profit.

Many thanks,

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Replying to DJjt:
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By Accountant A
15th Jun 2020 20:17

-9h]
]-h

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By brian-scholar
24th May 2020 16:05

Although your profits may not have exceeded £10,000, there is the matter of class 2 and class 4 national insurance to consider, the thresholds being below that figure.

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By fawltybasil2575
24th May 2020 16:33

@DJjt (OP).

Your initial question now states that your self-employment income for several years was under £10,000. However, it also states that such income was for only approx. 3 months’ work.

This therefore begs the question as to what sources of income you received, in those several years, for the remaining 9 months of each year.

Basil.

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By Accountant A
15th Jun 2020 20:17

9h-]

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By SXGuy
24th May 2020 17:35

"Needing some help. I've been selling plants on a market stall for a few years now as a hobby, but haven't been registered as "Self Employed" as my profits have been well under £10000 so no tax needed to pay"

Congratulations for being the only person in the UK who can manage to earn a profit of 10k and not have to pay anything for doing so.

National insurance contributions would be 1 thing you haven't paid.

If you have other income, then you've not paid the additional tax on that 10k profit.

Looks like you should have consulted a professional all those years ago.

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By SXGuy
24th May 2020 17:35

.

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By DJjt
24th May 2020 17:51

Okay thanks Brian.

Yes, have a part time job as a waiter at a restaurant too.

I guess I will call HMRC and explain the situation. Just wanted to know how likely and how much the fines will be and how many years they backtrack.

thanks all,

Dan

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Replying to DJjt:
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By memyself-eye
24th May 2020 17:59

Guess I will call HMRC....

Well good luck with that one.

Nye-eve or what!

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Replying to DJjt:
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By Truthsayer
24th May 2020 23:07

Just get an accountant, like you should have done years ago.

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Replying to DJjt:
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By Accountant A
15th Jun 2020 20:17

]-9hj]

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Replying to DJjt:
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By SXGuy
25th May 2020 09:17

How did, seek professional advice turn in to, ring hmrc?

I mean if you want to not bother mitigating tax liabilities, penalties and interest then by all means give them a call. I mean it's not like they are there to take as much as they can from you or anything.

How about you stop the long road of mistakes now and actually do what accountants are telling you.

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Replying to DJjt:
By Paul D Utherone
26th May 2020 13:37

DJjt wrote:

Okay thanks Brian.

Yes, have a part time job as a waiter at a restaurant too.

I guess I will call HMRC and explain the situation. Just wanted to know how likely and how much the fines will be and how many years they backtrack.

thanks all,

Dan


On the face of it you will have a failure to report penalty - see HMRC Factsheet here https://assets.publishing.service.gov.uk/government/uploads/system/uploa... - That will be a percentage of tax in a range depending on circumstances as set out there.

Once you tell HMRC then they will issue returns for you to complete and you will have three months to do so, at which point late filing penalties will start.

Also have a look at the TaxAid page here - https://taxaid.org.uk/guides/taxpayers/tax-returns/late-tax-returns

But mainly, and as others have said, speak to an accountant who will be able to help you deal with HMRC rather than try and deal with it yourself by throwing yourself at the mercy of HMRC

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Hallerud at Easter
By DJKL
25th May 2020 10:52

The most interesting point re all of this will be defining profit, whilst the OP claims to have made limited profits given he/she is apparently not an accountant that is certainly not a given, accounting for say stock carrying over year to year being crucial to that calculation.(especially if cultivating perennials for later life stage sale)

Of course maybe cash accounting has been pursued, who knows.

A meeting with an accountant to at least hammer out the basics is really advisable to avoid the business sustaining die back.

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By NicoleM
25th May 2020 12:39

Happy to help.. just contact me.

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