Mystery Shopping and Self Employment

[msemma]

I started working as a mystery shopper for a new company - I've mystery shopped before and this issue hasn't arisen). I noticed that after I submitted reports online there was a disclaimer saying I was responsible for declaring my earnings for NI and Tax. I've done this and contacted my tax office who have now put me down as self employed, and said I might get a fine for not telling them sooner. They also sent me a bill for backdated NI payments which was more than I'd earned form Mystery Shopping for the company! They did also sent me a form to fill in to claim small earnings exemption from NI payments and told me to send the bill back to them.It looks like I'll now have to go through self assessment next year - all for about �35 worth of payments! Someone I spoke to at the inland revenue said this might not be the case if my earnings stay under a certain amount. Is this the case? Has anyone else been in this boat?

[Scarlett]

Sounds like you need to get yoursalf an accountant. If you are self-employed it is so much easier to use one than try and deal with all this on your own. Be careful- you are allowed to earn quite a lot before you have to pay extra NI. Find out from the tax office what the threshold is. You can also earn about �4000 (someone will correct me) per year before you have to pay ANY tax. Then you pay a certain rate up to earnings of �10,000 and then another rate above that.

Keep in touch with the Inland Revenue and they will be on your side. But they shouldn't bother with you to be honest, you are far too small fry!! No offense!!

[kempie]

The HMRC website should be of some help

http://www.hmrc.gov.uk/startingup/selfempl.htm

[xrayspecs]

If you were workng as self employed three months or more before telling the tax office they can fine you. When you registered as self employed you would have been asked for a ball pak figure of gross earnings. If you told the tax office that your earnings would be under he threshold for tax and Nics I'm surprised you were billed for Nics. Remember also that you may have to pay both class 2 and class 4 Nics (depending on your earnings) and tax at roughly 25% of your earnings over and above the lower threshold.

In your second year of "trading" your tax is payable in advance! so you'll pay the tax you work out by self assessment and also an advance of tax based on the previous years tax bill. Obviously if you pay too much then you will get that back. If you estimate and pay too little you will not only be liable for the excess but also any interest the IR would have acrued from the correct amount had you sent it in. Good Luck!