To resent paying so much tax on side hustle earnings?

[Powfred]

I earn around 50k in my main job and pay all the relevant taxes through paye etc.

A few years ago I had a decent disposable income but with childcare, mortgage rises fuel etc it has gone down a lot. I do have a DP who shares these costs but they earn less and have also felt squeezed financially.

At the start of the year I began a side hustle as a hobby to generate some extra income. I figured if it did well I'd have some extra money for treats and days out etc. Not going to give details of side hustle in case outing.

Side hustle is gaining momentum and could potentially generate a few hundred a month soon. However, I've read that once you earn more than £1,000 per year from a hobby/ side hustle, you then have to declare and register earnings for tax. Given my main job salary, this would mean anything I earn from side hustle would be in a high tax bracket.

So (if I've understood correctly - happy to be corrected if not), if it does well then I'll have to pay 40% of what I earn from it in tax.

AIBU to resent this? I've tried to be entrepreneurial to generate more cash when main jobs aren't giving us as much disposable income as before but it just seems pointless if half of the income just goes to taxman.

Hear hear @ElleDeeCB !

Also, @Powfred your posts made me stop and think. Initially on this thread I was with the others of the mind set "call it what you like, it's income and taxed". But I then started wondering. Of course a main problem is the wealthy do have loop holes , so the majority of tax comes from us, and then as @ElleDeeCB so eloquently described, we're given crap service back so the motivation is obliterated. What if there was a system whereby a person paid tax for the first lot of full time hours, hiwever many jobs it took to get up to full time, whatever the job, whatever the pay, whatever the tax bracket. But then income earned beyond the initial full time taxed pay was yours. That would be a massive incentive. Op, become an mp and lobby.

AIBU for wanting to know what the side hustle is and why it would be 'outing' to tell us??

Come on OP - I'm dying to know and then I might be able to give it a go.

Lizz Truss, is that you? (waves)

My mate works for the civil service and they got a one off £1500 cost of living payment recently. He was furious because nearly half of it was taxed and he received about £800 into his bank. I do think it calls into question the motivation for giving civil servants that payment considering so much was taxed.

There’s also a school of thought that too much income is taxed in the UK and the wealthiest are not necessarily receiving most of their wealth from income so they evade it. I don’t know much about this but I’ll be reading up on it.

Yanbu, I resent paying tax even on earnings from my 'main job'. Wouldn't mind it if things actually worked in this country but paying money for half the country to be on strike, to phone the doctors and have to appease the gatekeeper receptionist into thinking you're unwell enough to access the health care you pay for every month, blah blah I could go on.

I think we get a rubbish deal personally :) my hope is Labour comes in, makes it all better for public sector workers, and I can go back to feeling grateful to pay tax and have access to great services. Is that wishful thinking 😆

Anyway, rant over. Yanbu. You're hardly raking it in in this cost of living crisis and you've paid tax all your life it seems. However it is the law and unfortunately you have to pay it.

I don't resent taxes in main job. I've paid taxes all my life but if it's a side gig or hobby to earn some extra cash then why should that be taxed to the max as well?

This just makes no sense. You can cutesy it up with the term ‘side huddle’ but it’s just another job, why would it not be taxed?

Just wait for the 60% marginal tax rate when you go over £100k, that bit really stings…

[NB not actually complaining, aware that’s a lot of money]

Stop when you get to £ 1,000.

I'm on £27k and have a side job rathe than a 'hustle' and have to pay tax on this. Not paying tax on £1k for you is a better deal than I get, stop complaining!

It probably feels frustrating because you are noticing it more as it's a business being built by you.

But this is no different to you getting a promotion at work. Try to view it in that light. You are being treated the same as any ody else, you're just noticing it.

Anyone that does loads of overtime presumably needs the money as well?

This is wrong. You would lanyard on all profits.

The rate of productivity in the UK is lower than any other G7 economy because it doesn’t pay to be efficient, to innovate, to take risks, to work more..

You can either deduct expenses OR you can claim the £1000 allowance, but not both.

Yes you make good points here. I've had some bad experience with public services, they're not working well yet we still are taxed heavily. Then you hear about public money being wasted (ppe, hs2) or large corporations/ wealthy people avoiding their share of tax. Yet a measly monetised hobby/ side hustle/ weekend job for some extra income can be taxed at highest rate. Just doesn't seem fair

It's 1k turnover, not profit.
The 1k turnover is the point at which you'll have to fill in a tax return. If your turnover is £1100 you would have to fill in a tax return and pay tax on any profit from that.

Then overtime should be taxed differently too

Well this is what happens - your income from all your jobs is added up and the amount of the total that goes above the threshold is taxed at the higher rate. The second job is not taxed higher mo
matter your usual earnings.
If you did a tax return (which you would need to if you had two jobs) if you actually had been taxed higher for the second job without going over the threshold, then you would have got a tax rebate.

I work part time, 16 hours, but will often cover holidays etc. and work full time for those weeks.

Are you saying that I should earn more for working 39 hours those weeks than someone who is contracted for full time hours?

We have staff contracted for 10 hours, I would not be happy if they earned more than me for working the same number of hours I do just because theirs is classed as overtime.

Side hustle? Please, it's a second job. Like any job you pay tax on your earnings.

You’re being very unreasonable.

Create a limited company and put all your side hustle earnings in there. You’ll only pay basic tax and can take out dividends.

How much do they receive in additional benefits?
Why did they choose to have 3 children when they have such a low income?

Right, and any thoughts on what behavioural change that might drive from employers and workers, and what the wider implications of that would be?

My side hustle had grown to the point it is likely to exceed £1000 this year, last year it didn't. I now have a limited company and accountant and I am unlikely to need to pay any tax at all as expenses, such as marketing, travel, subsistence, rent of a room in my house to do business professional subscriptions insurance etc all fixed costs are several thousands. I expect to break even next year and hopefully be in profit from year 5. My advice, get an accountant quick.

Bins are paid for once a year. There are large bins dotted around. You take your rubbish to those yourself. There is no doorstep collection. There are also no dirty streets or litter.

If you don't have private cover and use that, or you arent paying into the system, if you call out emergency services you get billed after.

Road use is paid for in vehicle tax.