To resent paying so much tax on side hustle earnings?

Hate to tell you OP but I have to pay tax (shock horror) on my small amount of private pension. So why should your side hustle be exempt when you're already earning good money at your day job?!

Love these people who think they don't use up any services paid for by the government. Where do they think their doctors, civil servants etc. are educated - mostly in state schools. Unless you're literally not living here you are using plenty of services paid for by the tax payer.

But why should overtime etc be treated differently. People with ‘high’ salaries often don’t get paid overtime but have to work it in any case. Why should they be penalised? I earn a decent wage as an accountant but often work 10 - 20 hours over my contracted time to get work done. The high salaries are often there to compensate for this, but people with these jobs should pay taxes on all their income because they devote all their energy to one job / career instead of hustles?

Yabu for saying “side hustle” it sounds stupid and wanky.
Ya also bu for thinking self employment should not be taxed.

If your "side hustle" (vile phrase) is so profitable that tax has become an issue, then you need an accountant.

You need to declare as self employed income, potentially for ni as well (check current thresholds) the £1000 allowance is instead of expenses, work out which is better. As long as you keep a good spreadsheet you don't need an accountant, you can use the hmrc site yourself to declare

Ok, I understand that, but but seems as though the OP is saying 'it's not FAIR!' that (assuming) she would have to pay tax on earnings from a hobby that she loves doing. For some people cleaning or gardening or whatever else is their side hustle. They have to pay tax on their side hustle, but the OP doesn't want hers to count as taxable income.

There is extensive guidance on the HMRC website about what constitutes a hobby as opposed to what constitutes a trade - all backed up by statute and case law.

It mostly centres around "badges of trade" which are frequency of transactions, profit seeking motive, etc.

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20205

"Selling" your time, i.e. cleaning, gardening, is always going to be regarded as a trade rather than a hobby! If you wanted to "garden" as a hobby, you'd volunteer for a local park, RHS garden, etc and wouldn't charge for it. Of course, you could do it for "expenses" but then your expense claims would have to be reasonable and genuine, i.e. claiming HMRC mileage rates to going to/from the RHS garden and maybe a fiver for your lunch!

But, selling some "items" that you've previously used and enjoyed yourself for a period of time, i.e. a model railway collection, a piece of art, etc is usually not a taxable trade. It only becomes a "trade" when you start going to model fairs to buy, say, second hand trains with the intention of selling them for a profit pretty quickly.

They are. Which is why you don’t pay tax for first £1000.

tax is based on o stall income. Each individual income is not considered separately.

How would you define or qualify a hobby?
What if I said cleaning or gardening is my hobby and I'm using my initiative by trying to earn a bit extra through cleaning people's houses?

"VAT is not a tax on your business"

It can be. If someone isn't VAT registered and is paying VAT on business costs, of course it's effectively a tax on the business. It's not clear from the post if they are VAT registered or not - they might just mean they are paying VAT on supplies etc.

Your comment about VAT indicates to me that you really don't know enough about finance to be running your own business profitably. VAT is not a tax on your business.

If you know you will have to pay a higher rate of tax on your profits, then you need to be selling whatever it is at the right price to reflect that built-in cost. In any case, you would only pay tax on your profits, so you need to look at what expenses you can claim against your business income.

I think of taxation as a subscription to civilisation. You want low tax, there are low tax jurisdictions to live in. In the UK, perennial complaining notwithstanding, we have it sweet.
If you could be assigned a different place to live completely at random or stay here, would you really take the gamble? I wouldn't take that punt, personally.

hope you dont live in scotland! think of this! Earning of £50k per year you would take home £3168 per month in england! In scotland you would only take home £3069 from the same earnings!!!

Yes. Perhaps not the first year if the business makes very little, but I found the advice invaluable. Now I can pay for one more easily, but I wish I had employed one sooner.

And corporation tax is payable on the profits, out of which dividends are paid!

Tax deductible does not mean they are free though.

An accountant comes at a cost.

If someone has low profits, do you think an accountant would increase the net amount they take home themselves?

Which is basically what someone hopes for.

I understand the different reasons; I am also voluntarily VAT registered. I was curious as to OP’s reason. In my head, when people say ‘hobby business’, I tend to think of B2C rather than B2B, but that’s based on previously having a hobby business of my own.

There are advantages if you're primarily a B2B business - it makes no difference to your clients, and it adds a degree of credibility. It's different if you sell to the public.

My clients are all businesses, I'm voluntarily registered. It doesn't prevent you having a non-VAT registered side-hustle if you can demonstrate that the two are not technically linked.

If you don’t want to pay in, you’d better not be taking any benefits out that the rest of us are all paying for.

You know, like roads, streetlights, schools, hospitals, police, fire brigade, bin collection, safety standards in buildings, etc etc etc.

Its called being a responsible member of society. If you don’t want to be a part of civil society you could always take your chances somewhere like Haiti where there’s no functioning state?

This is the advice that my husband has received from his accountant so I would guess @Morph22010 is correct 🤣

@Kwasi 😫

A lot of people work for less than 49.5% of what those people on higher tax bands earn. It can't be that pointless.

You only get £1000 of tax-free dividends now, which is soon to be £0.

Why are you voluntarily paying VAT?