# Calculating Tax to pay on a homer



## technics100 (Jul 9, 2008)

I an employed Architect and have just completed a private job (homer) for someone. I now need to pay tax on this. Can I do this myself or do I need an accountant to do this for me. I do not want to be registered as self employed as this was really just a one off. How do I calculate what is deductable from the gross amount paid to me. Can I deduct mileage, printing costs etc etc.. Any help would be useful

Cheers


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## scottgm (Dec 27, 2009)

I thought a "homer" was just a side job / favour that doesn't go through the books... i.e no tax?


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## The Cueball (Feb 8, 2007)

This should help you out:

http://www.hmrc.gov.uk/sa/index.htm

:thumb:


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## The Cueball (Feb 8, 2007)

scottgm said:


> I thought a "homer" was just a side job / favour that doesn't go through the books... i.e no tax?


That is <cough> illegal <cough> :tumbleweed:

All income has to be taxed for Queen and country..... :devil:

:thumb:


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## scottgm (Dec 27, 2009)

The Cueball said:


> That is <cough> illegal <cough> :tumbleweed:
> 
> All income has to be taxed for Queen and country..... :devil:
> 
> :thumb:


ye obv but thought thats why people do them?


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## The Cueball (Feb 8, 2007)

scottgm said:


> ye obv but thought thats why people do them?


only the corrupt ones....



:lol:

:thumb:


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## scottgm (Dec 27, 2009)

lol...

i've never done a 'homer'... im just a tax evading student


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## vroomtshh (Nov 23, 2009)

technics100 said:


> I an employed Architect and have just completed a private job (homer) for someone. I now need to pay tax on this. Can I do this myself or do I need an accountant to do this for me. I do not want to be registered as self employed as this was really just a one off. How do I calculate what is deductable from the gross amount paid to me. Can I deduct mileage, printing costs etc etc.. Any help would be useful
> 
> Cheers


Now, obviously what I'm going to say is illegal, but are you mental? The amount you'll be taxed on a one off job will make it not worth your whiel doing it (I'm assuming it wasnt a multi million pound contract)

If you pay tax at work, and its an odd time thing, and your paid cash, then personally I wouldnt bother declaring it.

I'm sure lots of people will brand me the devil or something now, but I pay 40% of my wages on tax as it is, £2k council tax, tax on everything I buy, tax for my car. So when I do the odd homer, its always a cash price, and I certainly dont want to be paying more tax on it.


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## technics100 (Jul 9, 2008)

I understand what your saying, but this job was reasonably big.. about 8k, so I have about 2k of that sitting to pay tax.. I just don't want the client declaring it and me not, then the HM revenue coming looking for me..


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## Maggi200 (Aug 21, 2009)

I would suggest you check out the badges of trade. Was this done for a friend, do you enjoy this as a hobby? What did you charge for? Time costs or a large amount for a large profit? It may not even be taxable depending on the badges of trade. Best examples of this is an amateur photographer charging a reasonable amount to do a friends weddong, as its a friend, its thier hobby and the charge isn't excessive I personlly wpuld argue its not trading and isn't taxable.


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## technics100 (Jul 9, 2008)

Not done for a friend, just a job that I was asked to do.. The fee was for planning / building control drawings for a 6500 sqft replacement house, stables, garage etc..

Where can I find info out about badges of trade?


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## HalfordsShopper (Jul 8, 2008)

Can't you think of 8Ks worth of business expenses incurred to allow you to complete the job. I mean you couldn't have done it without a laptop could ya, and a desk to work on - lol. If it were me i'd turn it into a loss and offset it against other profits - haha.


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## toddy2 (Jul 21, 2009)

I'm an employed Architect too, *if I was* to do a Homer I make sure it's for cash, and not put my name down on the drawings or act as the agent on the planning application. As your's is of a larger nature than the usual loft conversion extension type of homer, I'd declare it. make sure if your putting your name to it you have your indemity insurance in place.


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## The Cueball (Feb 8, 2007)

HalfordsShopper said:


> Can't you think of 8Ks worth of business expenses incurred to allow you to complete the job. I mean you couldn't have done it without a laptop could ya, and a desk to work on - lol. If it were me i'd turn it into a loss and offset it against other profits - haha.





toddy2 said:


> I'm an employed Architect too, *if I was* to do a Homer I make sure it's for cash


Shame on both of you...taking cash and not paying taxes... 

How do you expect all the immigrants coming into the UK to get nice houses and cars, as well as all those nice people in jail - without your taxes they might have to go without play stations!!! :lol:

You just think about that!!!

:tumbleweed:

:thumb:


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## technics100 (Jul 9, 2008)

Ok, so I should be paying tax on this. Does anyone know what is deductable and what isn't. What I can charge for travel, printing etc etc..

Thanks


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## jamest (Apr 8, 2008)

technics100 said:


> Ok, so I should be paying tax on this. Does anyone know what is deductable and what isn't. What I can charge for travel, printing etc etc..
> 
> Thanks


May be worth speaking to an accountant, I am sure they will do all the work for you for some "homer" money. Just don't claim it on your tax return :lol:


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## HalfordsShopper (Jul 8, 2008)

the cueball said:


> shame on both of you...taking cash and not paying taxes...
> 
> how do you expect all the immigrants coming into the uk to get nice houses and cars, as well as all those nice people in jail - without your taxes they might have to go without play stations!!! :lol:
> 
> ...


:lol::lol:


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## Maggi200 (Aug 21, 2009)

Lol, I've just seen the value, I was on my phone when I wrote my reply, maybe £8k is a bit much to ignore. Clicky this may help understand them. Now I've read more it would depend on your expenses relating to the job, and how much profit there was. I dunno what's involved, surveying fees first or something I guess, without that I won't make further comments! Hope the link clears my other post up a little though


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## HalfordsShopper (Jul 8, 2008)

technics100 said:


> Ok, so I should be paying tax on this. Does anyone know what is deductable and what isn't. What I can charge for travel, printing etc etc..
> 
> Thanks


Have a read of this.

That will give you an idea, but i would really consider seeing an accountant. This is the kind of thing that a tax accountant can do in their sleep and they will probably save you a few quid too.


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## Maggi200 (Aug 21, 2009)

Lol, tax accountants are a wierd breed. Ours are very odd, I'm glad I don't do tax, audit can get dull though  I've done my tax exams, still found them bloody hard, something I just can't get my head around totally is tax, as when we did the exams, it was based on rules 2 years ago, then everything changed, and I missed the update talks  

But a tax return really isn't hard to complete.


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## organgrinder (Jan 20, 2008)

I always thought those that liked audit were the odd ones! However since I do audit and tax that probably makes me very strange.

If the work was done with the aim of making money, then you are trading. As such you need to advise HMRC of your existence and trade on a form CWF1 (should be advised to HMRC within 3 months of starting). Since your earnings are more than the lower earnings limit you will also have to pay NI on your earnings. For self employed people (as you now are, in addition to being an employee) there are two types of NI you pay. Class 2 NI is £2.40 weekly (for 2009/10), payable monthly by Direct Debit. You will also pay Class 4 NI along with your tax. Class 4 is payable at 8% on your taxable profits over £5,715.

You can deduct from your income any expenses which were wholly and exclusively for the purposes of the work you undertook. Stationery, postage, professional fees and insurance can all be claimed as can mileage for your car at 40p/mile.

You will need to complete a Tax Return for the year in which you start in business. If your earnings are fairly recent (i.e. since 6 April 2009) then the first Tax Return you will have to do will be for the year to 5 April 2010 which has to be submitted by 31 October 2010 in paper form or by 31 January 2011 if you do it electronically.

You can get a CWF1 on the HMRC website together with a direct debit form for your Class 2 NI which is listed alongside it.


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## 3dr (Mar 1, 2008)

how much if it is actually "Profit" though? you could look at it a few ways, it could be £7950 profit, allowing £50 for pencils, rulers, rubbers and paper, or you could argue the cost of qualification and schooling etc to become qualified etc against the whole amount?


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## organgrinder (Jan 20, 2008)

3dr said:


> how much if it is actually "Profit" though? you could look at it a few ways, it could be £7950 profit, allowing £50 for pencils, rulers, rubbers and paper, or you could argue the cost of qualification and schooling etc to become qualified etc against the whole amount?


The costs of gaining new knowledge are not a tax deductible expense. You can claim relief for the costs of maintaining your knowledge (i.e CPD) and for keeping up to date with current views but you can not claim relief for learning new skills.

It might not make much sense but then tax never did!

The profit is the sales price less the expenses directly attributable to providing that service e.g. your pencils and rubbers, mileage etc.


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## goste (Dec 11, 2009)

jamest said:


> May be worth speaking to an accountant, I am sure they will do all the work for you for some "homer" money. Just don't claim it on your tax return :lol:


You know what they say - a good accountant should pay for themselves!

Also, there is nothing wrong with tax 'avoidance'.....eg using your full tax allowances topping up ISA's / pensions etc......tax evasion is a different story, punishable with jail time!!

G.


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## johnsastra16v (Oct 7, 2007)

just my 2p, and no relevance to this topic so sorry lol

but this country just rap_es each and every one of us with tax.

illegal it may be, but if i had a cash job i know what id do...


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## Grizzle (Jul 12, 2006)

johnsastra16v said:


> just my 2p, and no relevance to this topic so sorry lol
> 
> but this country just rap_es each and every one of us with tax.
> 
> illegal it may be, but if i had a cash job i know what id do...


You will be found out eventually though mate,


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## johnsastra16v (Oct 7, 2007)

Grizzle said:


> You will be found out eventually though mate,


i agree with that, but on the of chance on the 1 time you dont declare it...

or if you want to declare, then declare say half of it. and just show that on the books. just make sure it all adds up correctly


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## organgrinder (Jan 20, 2008)

johnsastra16v said:


> i agree with that, but on the of chance on the 1 time you dont declare it...
> 
> or if you want to declare, then declare say half of it. and just show that on the books. just make sure it all adds up correctly


If you knew what the new HMRC rules and penalties are for those caught evading tax then you might not be quite so relaxed. Where deliberate deception or concealment are found the penalty will be 100% of the tax due: that is the tax, the same amount again in a penalty plus interest, leaving virtually nothing for you to keep (especially if you are paying tax at 40%).

However that's not the worst bit: if HMRC can show that you have done this once, they will take the view that you must do it regularly. They might decide you do this once a month and multiply the figures by 12 and then assume you have been doing it for the past 6 years (or 20 years in some cases). You don't need me to do the arithmetic to work out that the end result could be the loss of everything for one homer!

As long as you are aware of the consequences then it's your decision what to do but don't think that you will persuade HMRC that you only did it once.


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