Working as a private tutor will entail being self-employed, and with that will come the need to deal with your tax return. Remember, we are NOT accountants and this is general advice, not specific guidance, for which you will need to contact a professional or Her Majesty’s Revenue and Customs (HMRC).
Registering and Becoming Self-Employed
You will need to register as self-employed as soon as possible - generally within three months of starting work. Do this as soon as possible as it can take a little while to process your application. If you do not declare all of your earnings you can face a fine, and you cannot do this until you are registered with HMRC.
Self-Employed Tax Returns
You will be sent a self-assessment tax return after the 5th of April each year, which you must complete and send back to HMRC. Many people worry about this, but don’t. It’s a pretty simple process and comes with lots of guidance. It’s generally easier to do online if you are at all computer savvy.
Once you have submitted your tax return, HMRC will let you know how much income tax you are due to pay and the deadline for payment.
What you will need to complete your Self-Assessment Tax Returns:
- P60
- Access to your bank statements (paper or online)
- Details of all of your earnings, including:
- Teaching income
- Any PAYE income from other roles
- Income from investments
- Income from pensions
- Income from savings
- Details of all of your expenditures (keep your receipts)
Even if you are completing your form online (which will give you a little longer than by post), make sure that you don’t wait until the last minute to register, as you will be sent your password by post!
The self-assessment helpline is: 0300 200 3310.
Staying on top of your finances can come with a steep learning curve. Although it’s not a legal requirement, it’s good practice to have a separate bank account that you use for all of your inbound payments and business transactions. This makes it much easier to keep track of your money and can be a lifesaver come Self Assessment time.
If you are working full time and have lots of incoming payments, you may want to think about looking into using some accounting software to help you stay on top of everything. At the bare minimum, you should use a spreadsheet to track and log all of your payments and expenses."
Zack Neary-Hayes, Freelance SEO, Neary-Hayes
National Insurance
Remember that you will also need to pay national insurance contributions if you are earning a certain amount. It's probably best to check this when considering becoming self-employed.
The amounts you are expected to pay are outlined here.
Paying VAT
If you are earning more than £83,000, you will need to pay VAT. If you are earning more than £83,000 as a tutor, you are doing extremely well!
Hiring an Accountant
When becoming self-employed, many people choose to hire an accountant who is more experienced in dealing with such issues. Whilst there are obvious costs associated with this, you will need to assess them against the time it will take you to complete these documents.
Scott Woodley, Co-founder of Tutorful.
Scott is a fully qualified primary school teacher who left teaching to set up Tutorful, a site which helps parents and learners find the right tutor for them.
If you are looking to become a tutor, you can easily create a profile with Tutorful. You can set your own price, offer online or face-to-face tuition and begin building your rewarding career in no time.
