Need advice about tax/benefits

[gargalesis]

I've started freaking out a bit because I'm pregnant and I don't know how I'm going to manage.

I'm just coming to the end of a funded PhD, but I haven't written up yet, so as of October my main income will stop. I will somehow need to write my thesis and earn enough money to keep the roof over my head. I'm due in March. I'll be registered as a part time student then, so I am praying I'll be entitled to some sort of benefits, but not really sure.

I have a small job, which is self employed, I get around 10 hours a week, which works out at about £350 per month. I started this job in November, and I know I sound like an idiot, but I genuinely forgot that I needed to do a self assessment, so I didn't declare it. This has only just occurred to me and now I'm freaking out about it. I think because I'm earning so little, I didn't think about declaring it because I knew I wouldn't need to pay any tax on it. What should I do? Should I come clean? What will happen to me? I'm just really worried about it.

Oh god, I've just looked on the HMRC website at the penalties and I feel sick. I might end up paying more in penalties than I've earned??

If you started the job in November 2013 any earnings fall into the 2013/14 tax year which ran from April 2013 - April 2014. If you contact HMRC I think they'll ask you to register as self-employed and tell you that you have several months to complete a self-assessment.

Usually PHD funding is not considered taxable income as it is paid as a stipend rather than as employment income. If this is the way yours has been structured then your only earnings would be the salaried job. You can earn up to £9440 for 2013/14 before any tax is due.

I know, from what I can tell I wouldn't actually have needed to pay any tax as it fell below the threshold. I'm just really worried that they don't care about that and will penalise me anyway for not declaring my earnings.

If there is no tax due as earnings are below threshold then there would be no penalties and no obligation to file a self assessment form.

Are you talking about tax credits rather than a tax return? If so rules might be different for that.

Oh really? Not talking about tax credits, just self assessment.

I have just looked at my bank statements and my total taxable earnings were £822 in the last financial year, so I definitely don't owe any tax.

I just really panicked when filling out the form and it asked to give the company details and start date. Then I started googling and saw all the warnings about penalties for late tax returns.

I've just submitted the online form to register for self assessment anyway, I thought I'd better do it sooner rather than later.

I thought you still had to register as self employed and file a return even if your earnings are below the threshold? There's an additional form you can complete if your earnings are low so you don't have to pay NI contributions.

Yes, I realise that now. I have just registered. My concern is that I'm going to be hit with hundreds of pounds worth of fines for filing late. If the examples on the HMRC website are anything to go by I could end up being fined £1,300, which would be devastating considering I only earned £822 in the first place. But not if what FanSpamTastic says is true, which I'm seriously hoping for.

You are not filing late. You file a tax return for the tax year ending April 2014 by 31 October 2014 (it may be later). Your earnings fall into that year.
As long as you are registered as self employed and file in time you will be fine.

Oh I'm really confused now! I thought my earnings between Nov 2013 and April 2014 should have been declared in April 2014! I've just spent the past week worried sick for no reason?? Aaargh!

Thankyou Bohemond you're absolutely right, I've just checked. Feel really daft now!!

Nope any income earned to April 14 needs to be declared by 31 January 2015 if you file online or October 14 if you do a paper return. Any tax due needs to be paid by 31January 2015 also.

Apart from the late-but-not-late tax return, I was in a similar situation to you (pregnant, PhD funding coming to an end but not written up).

Once you get registered as self-employed, PAY YOUR NI (sorry for shouting).

If you pay NI for 26 of the 66 weeks before the due date, you are entitled to Maternity Allowance. There is no minimum earning requirement for the self-employed, but you do have to have paid your NI (even if it's paid late). In the eyes of most benefits etc you aren't earning much at the moment, so won't be entitled to contributions-based JSA and things like that. But if you get your NI payments sorted, you will get the full rate of MA for 39 weeks.

On matters non-financial, you can write up while feeding a small baby or while it's sleeping on your chest. Go to a sling meet. If you are planning to BF, get one you can feed in once the baby can hold its head - you don't want to spend time patting and rocking a baby when you can get a boob out hands-free and get typing. It's flipping hard and you will want to sleep forever once you have submitted. But it is possible. Good luck!

That is such helpful advice Spindelina.

I hadn't realised that about voluntary NI contributions, I was fretting about whether I'd qualify for MA but looks like I will now. That's such a relief.

When I first found out I was pregnant I told myself I had to finish writing up before the baby arrived. But I've spent the past 7 weeks lying on the couch feeling sick and exhausted, stressed out, and guilty that I haven't been able to get any work done. I'm getting more and more panicky about whether I'll manage it. But maybe it will be possible when the baby comes. I suppose as long as I get as much done in the meantime, it will be do-able.

I'm glad to hear you did it and survived :) thank you so much for the advice.

Just to clarify, I don't mean voluntary (class 3) NICs. As a self-employed person, you have to pay class 2 and class 4. Class 4 is income-dependent, and is basically income tax under another name. Class 2 is a flat rate of £2.75 a week, unless you have have a small earnings exemption certificate. You will be eligible for a SEEC, but you will be better off paying your class 2 arrears because that will make you entitled to MA.

Tangent 1: I think there is a big black hole for people finishing their funded PhDs pregnant, which too few students know about. If you have 6 months funding to go back to, you can get a 6 month maternity stipend from most funding sources, but not if you are nearing the end of your funding. On the other hand, many benefits (ESA, JSA) consider you to have not been working for the last three years, so you aren't eligible for them either.

Tangent 2: You are right to try to get as much as possible done before the baby arrives, but don't worry too much. Enjoy being pregnant and look after yourself. You can get back to writing well before you would be able to go back to a normal job. You have plenty of time to work out what sort of parent you will be, but if you are a Gina Ford type, the baby will be sleeping in their own cot at predictable times and you can get some work done. OTOH, most attachment parenting types get stuck on the sofa under a feeding/sleeping baby, surfing the internet or watching TV or reading a journal article or typing a few paragraphs! When you go back to a normal job, you GO BACK. You can't do a few hours one day then not feel up to it for the next week. I used to feed DD to sleep on my bed while reading a paper, then sit next to her while she slept and type for a bit. You can't do that with a normal job!

You've got a bit of time, but if you want to PM me at any point (in a year's time or whenever) to ask questions, rant, tell me you've got another thread, whatever, then feel free.