self employment do you have to?

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Old Jan 28, 2017, 9:42am   #1
Joined Aug 2012
self employment do you have to?

Good morning I have a tax query if you are trading pennies and I mean pennies on a micro account do you still have to register as self-employed as it would be unlikely to make any money or just pennies.I assume that if you do then the personal allowance would apply.I am retired.And I do this as a hobby and an intellectual exercise not to earn any money.Thanks any help will be gratefully accepted.
Mike.
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Old Jan 28, 2017, 11:15am   #2
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Technically, HMRC take the view that all income is taxable. The winnings from gambling, including betting and spreadbetting, do not count as income, but fees charged for the delivery of training, advice, services etc. in connection with such activities do count as income.

Therefore, all income can be required to be declared to HMRC. However, income below a certain threshold level (currently £11,000) will qualify for income taxation at 0% - but its till taxable in their eyes. So, if trading is your sole means of income, even though small, HMRC might take the view you need to declare it. Past experiences reported suggest that HMRC don't want to subject traders and gamblers to income tax, as these people could potentially then claim some tax allowances which otherwise HMRC would not have to grant.

A good idea would be a preliminary consultation with an accountant, or an enquiry direct to HMRC, though their policies do change from time to time without notice.
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Old Jan 28, 2017, 1:56pm   #3
 
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Originally Posted by redtag12 View Post
Good morning I have a tax query if you are trading pennies and I mean pennies on a micro account do you still have to register as self-employed as it would be unlikely to make any money or just pennies.I assume that if you do then the personal allowance would apply.I am retired.And I do this as a hobby and an intellectual exercise not to earn any money.Thanks any help will be gratefully accepted.
Mike.
In short, no
self employed means that you are paying yourself a wage. income from trading is not a wage, it doesn't fall under income tax, it falls under capital gains tax
of which there is an allowance of 11,100
any gains under this amount does not need to be declared to HMRC

when you get to the point you are earning over 11,100 by all means let me know and I can tell you what/if income liability you may have
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Old Jan 30, 2017, 7:12am   #4
Joined Aug 2012
rply

redtag12 started this thread
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Originally Posted by tomorton View Post
Technically, HMRC take the view that all income is taxable. The winnings from gambling, including betting and spreadbetting, do not count as income, but fees charged for the delivery of training, advice, services etc. in connection with such activities do count as income.

Therefore, all income can be required to be declared to HMRC. However, income below a certain threshold level (currently £11,000) will qualify for income taxation at 0% - but its till taxable in their eyes. So, if trading is your sole means of income, even though small, HMRC might take the view you need to declare it. Past experiences reported suggest that HMRC don't want to subject traders and gamblers to income tax, as these people could potentially then claim some tax allowances which otherwise HMRC would not have to grant.

A good idea would be a preliminary consultation with an accountant, or an enquiry direct to HMRC, though their policies do change from time to time without notice.
Good morning and many thanks for your reply.Useful.Thankyou.
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Old Jan 30, 2017, 7:13am   #5
Joined Aug 2012
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Originally Posted by malaguti View Post
In short, no
self employed means that you are paying yourself a wage. income from trading is not a wage, it doesn't fall under income tax, it falls under capital gains tax
of which there is an allowance of 11,100
any gains under this amount does not need to be declared to HMRC

when you get to the point you are earning over 11,100 by all means let me know and I can tell you what/if income liability you may have
Hi many thanks an interesting point.Thankyou.And i will get in contact although i do not expect to have to.Mike.
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Old Feb 1, 2017, 11:36pm   #6
Joined Feb 2016
I hope that you already have the answer as of now, however it might be good if you check with your local tax consultant to get more detailed information about your query.
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