Declaring Etsy Income to Tax Credits

[HeddaGab]

I've recently started an Etsy shop and it's going ok. DH is on a low salary so we receive child tax credits. Obviously I need to declare this to the Tax credits people. How do I prove my income, will it be through my tax return? Will they require any other proof? Obviously if I was working in a normal job, I would just provide payslips, but not sure with this?

I don't think I'll be earning enough to have to pay tax on but obviously I know I declare to HMRC regardless of whether I make enough to pay tax or not.

Thanks

I believe if you're self employed you'll need to declare all profits as income. e.g if you have £20k profits but only pay yourself £10k on the form you'll need to enter £20k as they require profits made not the amount you paid yourself. if you've made a loss then you enter zero.

Rules regarding proof change all the time and they're definitely different rules for small and new businesses. You might have to call Them and ask what proof they need.

Also I suggest you Google taxes on businesses as there's more than you think. e.g corporation tax, NI tax, income tax, you'll have to enrol to a pension scheme (which is compulsory but directors can opt out but you'll need to notify HMRC of your decision) , register for PAYE, dividend tax and VAT etc. These obviously depends on the dynamics of your business.

Good Luck.

unless you are earning a lot as single person self employed things are quite simple I have been self employed for years

as a small business making less than £11-12,000 a year there will be no income tax there will be some national insurance , there will be no VAT as not enough income,( need taxable turnover of 85,000). If it is just you PAYE does not apply you submit your accounts online to HMRC, corporation tax only applies to limited companies and some other things it almost certainly doesn't apply to you

however you need to be making the minimum wage per hour for the benefit system especially universal credit otherwise you might be expected to look for paid work instead

profit is after all your expenses so remember to include all your packing materials etc if you are making lots of trips to post office there maybe some mileage keep all postage receipts, do accounts weekly or monthly , if you are working from home you maybe able to claim a small percentage for heating the room you work in maybe 5% of heating electric etc, remember capital expenditure decent camera for your photos maybe a computer, paypal fees etc etc

you have 3 months from starting a business to notify HMRC as self employed your pension is your responsibility it is only if you employ other people you need to worry about PAYE their NI and pensions

best of luck with your small start up