The concept of having a business on the side alongside a main employment has been around for decades. So-called side hustles have gained in popularity during the Pandemic and can range from earning a bit of extra cash to replacing the income from full time employment over time. In a recent article by Hiscox it was reported that 1 in 4 Brits now have a side hustle, with a higher proportion of side hustlers in the millennial demographic.
With having a business on the side comes responsibilities, such as paying taxes, and if you’re new to the world of self-employment and tax, you might ask yourself if you even have to prepare a tax return.
Whether or not you need to prepare a self-assessment tax return, depends on how much gross income you received in the last tax year.
If you received more than £1,000 of gross income in the last tax year you will need to complete a self-assessment tax return by 31st January 2021. This will need to cover the period of 6th April 2019 and 5th April 2020. For Network Marketers, it’s important to point out that HMRC considers gross income to be product sales and commission payments.
If you received less than £1,000 of gross income in the last tax year, you do not need to complete a self-assessment tax return for this tax year. We recommend that you keep up with your bookkeeping and record keeping in case you do need to complete a tax return in the following year.
If you’d like to know more, we have published a handy checklist to follow to make sure you’re as organised as possible when it comes to doing your self-assessment tax return. And if you need any help, please just give us a call and we’ll be happy to help.