Jackson national life insurance co.

Small business expert George Derbyshire looks at how a new businessman or woman can most easily approach dealing with their tax returns.

QUESTION

Rachel, UK

I am a student of engineering, studying in my third year of five.

As a hobby I make , as presents for friends, but also to sell.

I don’t make very much from this. In fact, I don’t think I have made a net profit at all yet. Do I need to make some kind of tax declaration?

ANSWER

George Derbyshire, chief executive of the National Federation of Enterprise Agencies

If you are currently working and paying income tax and national insurance, any revenue generated by your own business can be treated as “additional income” on your tax return.

This will be your total earnings from sales less all your associated expenses.

On the other hand, if you are and this is your sole income, you are not required to make until your profit exceeds the threshold, currently 4,465.

You are advised to contact your local HM Revenues & Customs office, as you have to complete the Small Earnings Exemption Form (CF10) if you do not wish to make National Insurance contributions.

For more specific advice relevant to your business, you should contact your local Enterprise Agency. Many of them can offer a free consultation session.

You can search for your nearest agency on the National Federation of Enterprise Agencies website (link on the right), or ring us on 01234 831623.

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