Do you earn a bit of extra income? Not sure whether you need to tell the tax man? Well here’s the low down:
If you earn a bit of extra cash be it through walking dogs, babysitting, selling knitted tea cosies on ebay, hiring out your GHD’s or selling the odd Aloe Vera product, then the good news is that if it’s £1,000 or less each year then you don’t have to tell the tax man!
You do have a responsibility to keep records though to prove that it’s not more than £1,000.
Records to keep
If you use the trading or property income allowances you must keep a record of your income.
Examples of the records you may need to keep are:
- copies of your invoices, paper or electronic
- a spreadsheet of your income receipts
- emails confirming income received
- statements from the company who paid you which show the amount you received
- bank statements
- bank deposit pay-in records
- a diary or appointments book showing your income from each customer
HMRC can charge you a penalty if the records you keep are not accurate, complete and readable or if you do not retain them for the required period of time.