Should I pay taxes if I am a full-time student working part-time from home?
Hi,
I am now a full-time postgraduate student, I was working during the summer and my employer was paying my NI and taxes.
Now the university is paying me a scholarship that consists of a monthly stipend to cover my living expenses that I have been told it is not taxable.
I now started working from home few hours per week and earning around £200 per month for that, however the company told me that they will not file my taxes and NI because I HAVE to do it myself.
My questions:
1. If I am a full-time student, should I pay for NI if I’m working part-time?
2. Is there a threshold or anything where if someone if earning below that number, the person doesn’t have to declare earnings?
3. In case I have to declare earnings, will I have also to declare the stipend that the university is giving me? as no one else from students is declaring that as it is supposed to be a scholarship for living expenses.
Is it mandatory in my case to register that I am a self-employed?
Any suggestions are very much appreciated.
Thanks
I live in the UK.
You will need to register as self employed within 3 months of starting self employment. On the gross income you have stated, you will be entitled to the small earnings exemption for NIC’s, so you wont actually pay any. However, as you will be registered as working, this will count towards your NIC payments which count towards your pension.
You dont declare your stipend as this is not taxable. Keep accurate records of your self employed income and expenditure so that you can produce accounts and complete your self assessment at the end of the year. You will probably be due a refund for 08-09, so get your self assessment in as soon as possible.
February 5th, 2010 at 4:31 pm
No. you get your taxes back when you hand in your p45 to your employer. i dont know how it is in your cuntry, i live in Ireland.
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February 5th, 2010 at 5:12 pm
yes if in doubt ask the inland revenue being a student does not exempt you from paying taxes I found out to my cost
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February 5th, 2010 at 5:38 pm
I’d agree, you really ought to speak to HMR&C or whatever the Inland Revenue are called this week. You’ll get it from the horse’s mouth, as opposed to anything you might be told on here, which may or may not be correct. They’re really quite helpful now.
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February 5th, 2010 at 6:24 pm
dunno
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February 5th, 2010 at 7:14 pm
The fact you are a student is irrelevant and does not excuse you from paying taxes, otherwise we’d all register as students!
Everyone in the UK has a personal allowance – an amount of money that we can earn before tax is due. Currently this figure is £6,035 rising to £6,475 in 2009/10. Your stipend is non-taxable and does not affect your tax position. If your self-employed earnings exceed £6,035 then you are liable to pay income tax. If you earn over £4,825 a year then you are also liable for National Insurance at a flat rate of £2.30 a week, plus further Nat Ins at a rate of 8% on profits between £5,435 and £40,040 p.a.
If you are self-employed, yes you are supposed to register as such, and complete a tax return. You should disclose the stipend, but HMRC will ignore it for the purposes of working out any tax and NI liability.
Call the HMRC helpline for the self-employed on (0845) 9154515 to check and confirm. Surprisingly, they’re very helpful! Good luck.
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I am self-employed.
http://www.hmrc.gov.uk/selfemployed/
February 5th, 2010 at 7:21 pm
Answer above (Steven B) is correct, BUT it is your total earnings during the tax year that have to be below £6035 before you pay tax (NOT just your self employed earnings). You need tell HMRC that you are doing self employed work because you have also had employment income which needs to be taken into account.
Call the Newly Self Employed Helpline for advice, tel 0845 915 4515 http://www.hmrc.gov.uk/selfemployed/iwtregister-as-self-employed.htm. They can answer your questions and can take your details if you will need to complete a Self Assessment Tax Return. They can also advise you about National Insurance Contributions.
If your uni told you that stipend is none taxable, just keep hold of the correspondence from them which states that. http://www.hmrc.gov.uk/manuals/eimanual/eim06271.htm http://www.hmrc.gov.uk/manuals/eimanual/EIM06205.htm
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February 5th, 2010 at 8:04 pm
You will need to register as self employed within 3 months of starting self employment. On the gross income you have stated, you will be entitled to the small earnings exemption for NIC’s, so you wont actually pay any. However, as you will be registered as working, this will count towards your NIC payments which count towards your pension.
You dont declare your stipend as this is not taxable. Keep accurate records of your self employed income and expenditure so that you can produce accounts and complete your self assessment at the end of the year. You will probably be due a refund for 08-09, so get your self assessment in as soon as possible.
References :
ex Inspector of Taxes
February 5th, 2010 at 8:23 pm
however the company told me that they will not file my taxes and NI because I HAVE to do it myself.
It sounds as if you are an employee of the company and they are trying to con you into thinking you’re self employed. You are an EMPLOYEE, although at £50pw well under the tax/nic threshold, and as such are not liable for Class 2 NICs.
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Accountant 40 years