When does casual income become declarable...?

[Arif110]

Hi all,

Over what threshold is one obliged by law to declare extra earnings (I'm in normal full-time PAYE employment currently)??

E.g. the weekend mechanic who services friends's and families' cars for some basic money.

Thanks in advance for your help,


Arif

[AndyAudi]

Arif110 said:

Hi all,

Over what threshold is one obliged by law to declare extra earnings (I'm in normal full-time PAYE employment currently)??

E.g. the weekend mechanic who services friends's and families' cars for some basic money.

Thanks in advance for your help,


Arif

Everything extra is taxable and should be declared, even tips!

[Eric Mc]

There is no lower threshold. If your current salary already takes you over the tax free limit of £5,225, then every penny extra earned (employed or self-employed - casual or regular) is fully taxable - and possibly NI able too.

[TheKeyboardDemon]

I think you are even supposed to declare cash given to you on birthdays/anniversaries etc... ask for vouchers as these are not taxable.

[Eric Mc]

No - these would count as gifts and are not taxable.

Rewards for supplying labour or selling goods counts as "Earned Income" and are fully taxable either as Employed or Self Employed earnings

[Arif110]

I assume also that life and my tax burden would be simpler/less if I simply operated on the basis of a sole trader? I do have a limited entity set up – incorporated, nothing else – but suspect that in order to benefit from the limited liability status, I’d be running into more aggravation than a small second income is worth?

Thanks for all the clear-cut replies so far - much appreciated!

[Eric Mc]

More than likely.

Even the simplest form of limited company costs a bit to maintain - and it has its own tax liabilities to return and pay.

[Arif110]

Okay - thanks all - brilliant and helpful as ever.