Mar 15, 2017
Unfortunately the answer is "Yes!" but try to look on it as another step in your successful career.
If you have been earning money as a face painter you must fill in a tax return. This does not necessarily mean you will have to pay tax yet as of course you will have your personal allowance and maybe some professional expenses that can be set against your earnings, however it is no use just assuming you are earning less than the tax threshold.
Ring up or visit your local tax office to request a tax return, you will need to explain that you are self employed, alternatively you can download one from the internet www.hmrc.gov.uk but you will still need to find out where to send it.
If you started earning money as a facepainter between the 6th April 2005 and 5th April 2006 you will need to fill in and send a return to be received by 30th January this year at the latest. This is really important as there is a mandatory fine of £100 if you are late, however this will be reduced if you don't actually have any tax to pay, but it is still annoying and takes time and money that you probably don't have spare.
If you started earning money as a facepainter after April 6th 2006 you will not have to fill in your tax return until 30th January 2008.
The easiest and best way to keep straight with your tax return is to fill it in and send it off by the 30th September (of the same year) because then the tax office will work out how much tax, if any, you will have to pay.
However if like so many of us you have left it until the last minute, here are a few pointers to help you work out your accounts.
If your turnover (gross receipts before deductions) is less than £15000 a year you do not need to make a detailed return you can just put down your profit after deductions.
If your net income is less than £4895 (which is the personal allowance for a single person) you will probably not have to pay any income tax, but NIC may
(How cute, the allowance is now £10,500 (2016) )
1. First of all work out all how much you received from facepainting.
2. Then you should deduct all professional expenses that you have receipts for, such as paints, equipment, classes, advertising etc.
3. You may also deduct a percentage of your telephone bill, your car running costs and even a proportion of your household bills if you use a part of your house as an office. Try to be accurate and not greedy as these are the sort of items that the revenue may query. Be careful if you own your own home, you could end up with a bill for capital gains tax when you sell if you claim expenses for part of your home as an office.
4. If you employ an assistant you may deduct their fees.
5. You may claim the costs of getting to your point of work so keep petrol receipts and train fare receipts, but there must be documentary evidence that they were for a work situation. It will really make your life easier if you keep all contracts and invoices and a record of your expenses.
6. You may not claim tax relief on business lunches, that is just a myth. However, if you are away from home overnight for work purposes, you may claim up to £50 per diem for food and accommodation. If you are away for more than 5 hours including lunchtime you may claim a reasonable amount, but alcohol is never to be included!
Don't forget that this advice is only to do with your facepainting work, if you have other income from other sources you must include that, and if you are an employee and tax is deducted from your pay by your employer you will probably already have a tax return but you must make sure you get the self employed pages as well and fill them in with your facepainting income.
If your income is quite low it is worth applying for family tax credit especially if you use a child minder or nursery.
If you get in a muddle take your work diary and all your receipts down to your tax office and they will help you, however don't expect any sympathy if you have lost any records. The Inland Revenue will be very suspicious and unhelpful if you try to claim for anything without documentation, however they are generally surprisingly helpful as long as you are being open and honest.
DISCLAIMER: ALL OF THIS ADVICE IS BASED ON OUR EXPERIENCE AND ADVICE RECEIVED FROM OUR TAX ADVISORS. IF YOU HAVE ANY DOUBTS, ASK THE TAX OFFICE, OR A QUALIFIED TAX ADVISOR.