That £1000 Trading Allowance

[Elderly]

My daughter has a PAYE job-share, and this tax year will earn rather less than the Personal Allowance.
She does not fill in a Tax Return, and had quit her job.

She has just got a one-off freelance job paying under £1000, but that will still not take her total earnings above her personal allowance..

Does she have to request and fill in a tax return (she is repaying a student loan)?

Thanks.

[Kiribati268]

No. No self assessment required if under £1000.

PAYE income is also irrelevant for the £1000 trading threshold.

[Elderly]

Cheers.

[Eric Mc]

The £1,000 threshold relates to SALES, not profits.

So if she invoiced £3,000 and made a profit of £500 - she must complete a Self Assessment return.

[Elderly]

Thanks Eric.
I’m aware of the £1k being turnover and not profit
which is why I wrote “.... paying less than £1000.....”.
I should have been less ambiguous.

[MitchT]

Kiribati268 said:

No. No self assessment required if under £1000.

PAYE income is also irrelevant for the £1000 trading threshold.

So - just to indulge me - I could earn, for example, £40,000 of PAYE income from an "employed" position, and have a turnover of £1,000 from work on the side and I don't need to declare that £1,000?

[joshleb]

Get it paid in cash and no worries...

[Kiribati268]

MitchT said:

So - just to indulge me - I could earn, for example, £40,000 of PAYE income from an "employed" position, and have a turnover of £1,000 from work on the side and I don't need to declare that £1,000?

Correct.

PAYE income is only considered once tax is liable on your self employment and the profit is added together with your PAYE income to form one big tax liability. HMRC will let you pay tax from self employment through your PAYE tax code, by reducing the personal allowance accordingly.

E.G

£40,000 PAYE + £1000 turnover self employed = 20% tax on £27,500. No need to register for self employment.

£40,000 PAYE + £5000 turnover self employed = 20% tax on £27,500 PLUS 20% tax on all self employment profit.

£5000 PAYE + £5000 turnover self employed = No tax due as less than £12,500 personal allowance. Registration for self employment is still needed as it's over £1000, even though no tax is due.

[Eric Mc]

Elderly said:

Thanks Eric.
I’m aware of the £1k being turnover and not profit
which is why I wrote “.... paying less than £1000.....”.
I should have been less ambiguous.

Yes "paying less than £1,000" did not clarify if you were referring to the actual sale value or the net situation after costs.