Freelance, earning >£1k pa, but less than basic rate tax threshold

[freeweekly]

DC (20) is a student. Last tax year (2023 - 24) he earned around £1500 as a freelance sports coach, and a similar amount as an employee in a different casual job (which was visible to HMRC via PAYE records). HMRC rules say that if you earn more than £1k freelance in a single tax year you're meant to register as a sole trader and fill in a tax return. He hasn't done this yet and thinks it's not important as his total earnings are well below the basic rate tax threshold. I half-agree, but as he is likely to work in finance when he graduates, I also think he needs to keep his nose clean.

For context: The freelance job wasn't cash in hand - the sports club he works for keeps proper records and he has to invoice them for the hours worked.

My questions are:

1. Is it reasonable for him to not register as a sole trader, on the grounds that if he did register there would be nothing to pay?
2. Is the sports club likely to routinely report the names of its many freelancers to HMRC?

1. No 2. No

If he wants to work in finance, registering as a sole trader and dealing with hmrc, tax returns etc is good experience that he’ll be able to put on his cv.

I also think he might need to register by 5th October to be within hmrc’s guidelines, so it would be a great decision for him to do this soon.

It's infuriating I know, but I had to register as a sole trader cos is old over 1000 of stuff at car boot sales and on vinted. But I am a higher rate tax payer 40% band. Maybe ask an accountant

Completing a tax return and paying tax are two different things. Being below the threshold does not mean you don’t need to file a return.

https://www.gov.uk/become-sole-trader/register-sole-trader#:~:text=You%20must%20register%20if%3A,to%20claim%20Tax%2DFree%20Childcare

He needs to register. DH earns under the threshold self employed, of course he stills needs to declare it. It'll be very easy for him to fill out the online form with that, so tell him not to be lazy.

He should register as a sole trader. He should also complete tax return when due (yes they are a headache but doable). He is silly not to as technically could get into trouble.