Tutoring is a great way to earn money while doing some good (especially as you can fit it round your busy schedule!).
The more hours you clock up, the more you probably start to wonder if you need to tell HMRC about your extra income. That’s why we've written a brief overview of all things tax you need to consider when you tutor through MyTutor.
When do I need to tell HMRC about my tutoring income?
HMRC allows you to earn £1,000 a year before you have to declare your income to them. This is your 'trading allowance' and applies to anything and everything you earn (whether it’s solely from MyTutor, or from other places too).
If you earn more than £1,000 in the year from April to April, you need to declare this income to HMRC through a Tax Return (also known as a Self Assessment).
If you're not sure if you’ve earned that much, you can find your total income by going to your Income page on MyTutor. And if you work across the private and schools side of MyTutor, make sure you take the total of your invoices and your payslips!
This is based on what you earn before any fees are deducted. If you have employment income, this would also be reported - separately - on your tax return.
What do I need for my tax return?
- A Unique Tax Reference (UTR) number
- Your personal details
- An overview of your earnings (from MyTutor and others)
While you may already have your personal details and overview of your earnings to hand, most people don't have their UTR.
A UTR is a 10 digit number that you get from HMRC after you register to do a tax return. It's very similar to your National Insurance number, but it's specifically used for your tax return.
You can register for a UTR directly with HMRC or do it with the Earnr app.
While most UTR registrations take three or four weeks, they can take up to 10 weeks - so make sure you do this as soon as possible.
I already have a UTR - what do I do next?
You'll need to submit your tax return to HMRC. A tax return, or Self Assessment, is an overview of your earnings for the year. This includes your MyTutor income, but it can also include income you receive from employment, letting out a room, dividends, interest, or any other capital gains you've made.
You can submit your tax return directly with HMRC, an accountant, or through an app like Earnr (which will significantly speed up the process, and take out the confusion)!
What tutoring expenses can I include on my tax return?
You can only expense things that you need to run your tutoring business. In the words of HMRC, anything expensed needs to be 'wholly and exclusively’ for the business. This includes any materials you use to tutor like pens and paper.
Rather than keeping an itemised list of all your expenses, the Trading Allowance is a great benefit to take advantage of. The £1,000 trading allowance allows you to assume you've incurred £1,000 in expenses (even if your expenses are less than £1,000).
Using the trading allowance will likely save you hours of work preparing your tax return (and relieve you of the stress of doing something wrong)!
When do I need to submit my tax return?
Your tax return can be submitted from 6 April each year, and covers all your earnings from April to April (the tax year). The latest you can submit this to HMRC is 31 January.
Do I need to pay tax when I submit a tax return?
Not necessarily. If your income is below the personal allowance, no tax will generally be due (sometimes a small amount of national insurance may be payable depending on the year).
But if tax is due, the deadline is also 31 January, so it's worth filing early.
You may also need to make payments on account for the following year - one half in January, and one half in July.
How can I make this whole process easier?
Dealing with tax isn’t always accessible or easy, especially when you're busy enough with uni, tutoring, and a social life! Using an app like Earnr can make it easier to stay on top of your income and tax return before the deadline.
There are many benefits to submitting your tax return early including the ability to spread your tax bill across 10 months as opposed to one lump sum. It also means one less admin task hanging over you!
Other Tutoring articles
Looking for more? Why not check out some of the other articles we've written to help you with your tutoring business.
