Self assessment's and maximum profit before having to submit one

SuperchargedLlama

Hi there,

I was chatting to a friend the other day who was giving me a bit of information which I wanted to double check (as I’ve not managed to find any supporting material).

Ultimately my friend was telling me that if you make less than £2k net profit, you don’t need to submit a self assessment as the profit is deemed as a hobby? I seem to have found some HMRC documentation that states this is a £1k limit, but even then it’s not clear. And I assume it is net profit rather than gross revenue?

For context, my business is a side hustle but I have a salaried day job with benefits - my side hustle definitely doesn’t make huge profits, and if I expensed more through it I certainly could keep it under a certain limit - these would be legit expenses of course, materials and equipment that are relevant to the job; part of which is having a youtube channel and I need to replace my computer soon editing in 4k is slowly driving me mad on my current one).

My net profits have never been that high really, but whenever I’ve done the self assessment through yourselves, I’ve never been advised I don’t need to submit one, so I just wanted to understand the rules, rather than guess and be in the wrong.

Many thanks,

Adrian.

Katie

Hi Adrian,

If your self employed income (not profit) is £1,000 or more for the tax year, you’ll need to file a Self Assessment.

If your income is less than this, you may not be required to file. If this is the case, you’d need to deregister with HMRC as they’ll be expecting you to file a return each year. If you don’t deregister and simply don’t file, even if you are under the compulsory threshold, they’ll issue a penalty.

Even if your income is below £1,000 there may be circumstances where you’re still required to file or you may voluntarily choose to. For example, if you intend to grow your business and want to claim expenses.

If you’re unsure if you’re required to file, HMRC has a short questionnaire to help you work this out:
Check if you need to send a Self Assessment tax return

Thanks,
Katie

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