one off work payments, tax & invoicing,
Discussion
I've asked similar before, but I can't find the thread and the question has changed slightly due to the amounts involved.
My partner has successfully written and published a book which is selling fairly well and has now been asked to write some articles for a few publishers and has been asked to invoice for them. Initially they were just going to carryout an end of year self assessment tax return as income would still be below the taxable rate, but as it has been more successful then not sure what would be the way to proceed.
We know the proper answer is to get an accountant, which is the plan, but we have a couple magazines asking for an invoice now for articles and not sure the best way to do this.
My partner has successfully written and published a book which is selling fairly well and has now been asked to write some articles for a few publishers and has been asked to invoice for them. Initially they were just going to carryout an end of year self assessment tax return as income would still be below the taxable rate, but as it has been more successful then not sure what would be the way to proceed.
We know the proper answer is to get an accountant, which is the plan, but we have a couple magazines asking for an invoice now for articles and not sure the best way to do this.
Is she now a self employed writer?
If she is, she needs to register for self assessment and, after the end of the tax year, prepare a set of sole trader accounts showing her profits from her writing activity.
She then needs to put these details on the self assessment tax return, along with details of any other income she has from any other sources and submit the completed tax return to HMRC.
When did she start receiving her self employed writing income?
If she is, she needs to register for self assessment and, after the end of the tax year, prepare a set of sole trader accounts showing her profits from her writing activity.
She then needs to put these details on the self assessment tax return, along with details of any other income she has from any other sources and submit the completed tax return to HMRC.
When did she start receiving her self employed writing income?
Eric Mc said:
Is she now a self employed writer?
If she is, she needs to register for self assessment and, after the end of the tax year, prepare a set of sole trader accounts showing her profits from her writing activity.
She then needs to put these details on the self assessment tax return, along with details of any other income she has from any other sources and submit the completed tax return to HMRC.
When did she start receiving her self employed writing income?
Thanks for the response Eric, Your contributions are always of value.If she is, she needs to register for self assessment and, after the end of the tax year, prepare a set of sole trader accounts showing her profits from her writing activity.
She then needs to put these details on the self assessment tax return, along with details of any other income she has from any other sources and submit the completed tax return to HMRC.
When did she start receiving her self employed writing income?
She is employed elsewhere on PAYE doing very few hours a week (Earns circa 2k a year) and this was meant to be a release as a hobby and we weren't really expecting any money to come from it, a publisher approached her and it just happened. She hasn't registered a business so think that would make her self employed as a sole trader?
She received a one off payment from the publisher in December, but will be getting royalties too for a while, and has now had a couple offers of international printings that would bring in a couple of one off payments again but being asked to do some bits for magazines is unexpected and looks like it could drip feed small amounts of money every so often.
Right, the simple answer is that she started receiving self employed income in December 2020. This means she will need to submit a self assessment tax return for the tax year 2020/21.
She will need to notify HMRC sometime before 31 October 2021 that she needs to submit a self assessment tax return.
The statutory filing date for actually submitting the 2020/21 self assessment tax return will be 31 January 2022. That is also the date she will need to pay any tax due for 2020/21 on her self employed income.
"Royalties" are looked on as self employed income so her self employed income would be direct fees received for writing articles, books etc PLUS any ongoing royalties.
If she is lucky enough to receive "Up Front" payments for books or articles (as soon well known authors do), HMRC allows these up front amounts to be spread over a number of years so that they are not taxed in full in one year.
My advice would be to notify HMRC that she needs to be registered for self assessment sometime after 5 April 2021. HMRC will issue her with a Self Assessment Tax Reference (often referred to as the SATR). Confusingly, it's also called the Unique Tax Reference (UTR).
She will need to notify HMRC sometime before 31 October 2021 that she needs to submit a self assessment tax return.
The statutory filing date for actually submitting the 2020/21 self assessment tax return will be 31 January 2022. That is also the date she will need to pay any tax due for 2020/21 on her self employed income.
"Royalties" are looked on as self employed income so her self employed income would be direct fees received for writing articles, books etc PLUS any ongoing royalties.
If she is lucky enough to receive "Up Front" payments for books or articles (as soon well known authors do), HMRC allows these up front amounts to be spread over a number of years so that they are not taxed in full in one year.
My advice would be to notify HMRC that she needs to be registered for self assessment sometime after 5 April 2021. HMRC will issue her with a Self Assessment Tax Reference (often referred to as the SATR). Confusingly, it's also called the Unique Tax Reference (UTR).
Eric Mc said:
Right, the simple answer is that she started receiving self employed income in December 2020. This means she will need to submit a self assessment tax return for the tax year 2020/21.
She will need to notify HMRC sometime before 31 October 2021 that she needs to submit a self assessment tax return.
The statutory filing date for actually submitting the 2020/21 self assessment tax return will be 31 January 2022. That is also the date she will need to pay any tax due for 2020/21 on her self employed income.
"Royalties" are looked on as self employed income so her self employed income would be direct fees received for writing articles, books etc PLUS any ongoing royalties.
If she is lucky enough to receive "Up Front" payments for books or articles (as soon well known authors do), HMRC allows these up front amounts to be spread over a number of years so that they are not taxed in full in one year.
My advice would be to notify HMRC that she needs to be registered for self assessment sometime after 5 April 2021. HMRC will issue her with a Self Assessment Tax Reference (often referred to as the SATR). Confusingly, it's also called the Unique Tax Reference (UTR).
Thanks Eric, I appreciate that and will pass it on to her. It's funny how what was meant to be something relaxing for her has developed a side we hadn't really considered at all.She will need to notify HMRC sometime before 31 October 2021 that she needs to submit a self assessment tax return.
The statutory filing date for actually submitting the 2020/21 self assessment tax return will be 31 January 2022. That is also the date she will need to pay any tax due for 2020/21 on her self employed income.
"Royalties" are looked on as self employed income so her self employed income would be direct fees received for writing articles, books etc PLUS any ongoing royalties.
If she is lucky enough to receive "Up Front" payments for books or articles (as soon well known authors do), HMRC allows these up front amounts to be spread over a number of years so that they are not taxed in full in one year.
My advice would be to notify HMRC that she needs to be registered for self assessment sometime after 5 April 2021. HMRC will issue her with a Self Assessment Tax Reference (often referred to as the SATR). Confusingly, it's also called the Unique Tax Reference (UTR).
Eric Mc said:
That's a good thing - if she enjoys doing it and it doesn't put her under too much pressure.
Yes, it's meant to be a release from a few health issues she has had, and her first book as been about these.I asked for her to give me a break down of any payments she received from the publisher, she received a payment in February 2020 from the publisher to confirm that they were getting the rights to the book.
She's taken any payments she has received and just put them into a bank account and not thought about it, as it wasn't her reason for writing and we are in the very fortunate position that she doesn't need to worry about her income, I've always sorted out our bills etc.
That sounds like an awful boastful post, it's not meant to be, just her health meant it was best for someone else to be dealing with the finances in the household and as a result we don't really discuss money.
If she received income in February 2020, technically this means she started self employment in tax year 2019/20 so in theory she should have completed and submitted a 2019/20 tax return. The deadline for that was 31 January 2021.
Did she have other taxable income in tax year 2019/20 - such as salary, rents etc?
Did she have other taxable income in tax year 2019/20 - such as salary, rents etc?
Eric Mc said:
If she received income in February 2020, technically this means she started self employment in tax year 2019/20 so in theory she should have completed and submitted a 2019/20 tax return. The deadline for that was 31 January 2021.
Did she have other taxable income in tax year 2019/20 - such as salary, rents etc?
She paid PAYE from her part time job that year, where she earned just over £5k, the payment was £1200.Did she have other taxable income in tax year 2019/20 - such as salary, rents etc?
If her salary was £5,000 and she had no other income, she should not have paid any income tax (PAYE) on that salary.
For tax year 2019/20, a person was allowed to have income of up to £12,500 before any tax was due.
Sounds to me like she could be due a tax refund on her salary.
As has been mentioned, if a person's self employed Sales (note - not "profit") are under £1,000, there is no need to return that self employed income to HMRC.
For tax year 2019/20, a person was allowed to have income of up to £12,500 before any tax was due.
Sounds to me like she could be due a tax refund on her salary.
As has been mentioned, if a person's self employed Sales (note - not "profit") are under £1,000, there is no need to return that self employed income to HMRC.
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