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Do I have to pay taxes if I earned less than £2000 last year?

Discussion in 'General Business Forum:' started by Arturas Leonovas, Nov 13, 2012.

  1. Arturas Leonovas

    Arturas Leonovas New Member

    Hello.

    I stumbled upon this great forum. I hope you guys can shed a light on this situation. I started doing freelance last year and my accountant suggested that I should register myself as a freelancer. I thought why not. Now when the year ended, well basically the time to pay my taxes for the last fiscal year ended, I wonder do I even have to do that if my earning were less than 2000? I read that the limit is 6000 pounds before you have to pay any taxes.


    Thanks guys!
     
  2. ARRIVALS

    ARRIVALS Well-Known Member

    No you do not.

    I believe the threshold for paying income tax is a yearly income of around £5,500, and that's after all outgoings have been deducted. Your accountant will be able to confirm these details for you.
     
  3. richimgd

    richimgd Member

    Is this your only income or do you have another job?
    You get a personal allowance of £8105 for the tax year 12/13: HM Revenue & Customs: Income Tax allowances

    If you have another income which uses up all of your personal allowance then you will need to declare all of your freelance earning by means of filling out a self assessment tax return. I am a complete novice though on this subject, so I would go by what your accountant says. Feel free to post any more of his advice as I will need to do my tax return soon and I havent done one before..!
     
  4. SDGSteve

    SDGSteve New Member

    The threshold is higher now, about 7000, and going up each year because the Lib Dems want it at £10k.

    So, you don't have to pay tax, but you may still have to pay National Insurance if you paid it to yourself all in one month or just a couple of months, NI is calculated monthly not yearly. Company directors and I think anyone doing self assessment get NI repaid to them if their yearly total is below the annual threshold, everyone else gets billed by the monthly threshold.

    Inland Revenue do some free software you can download off their website which takes about 10 minutes to set up and will do all this stuff for you, it's called something like "basic PAYE tools".
     
  5. Corrosive

    Corrosive Moderator Staff Member

    Great point Steve. We use the Inland Revenue tool and it works very well. Takes the hassle out of working out tax and NI levels as long as you know what your tax code should be.
     

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