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I am currently employed as a graphic designer but have been approached by a friend to create a website for them. Fee will be around £1000 but it's only going to happen once, guarantee it. Therefore, do I need to set myself up as self employed for tax purposes? Or can I just declare it at the end of the tax year as a miscellaneous or irregular income?

Any advice appreciated.

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Assuming you are in the UK, as you quoted GBP (£).

You can check for yourself whether your work on the website can be classified as self-employment at the HMRC website.

From what you described, no, you should not be self-employed for income tax purposes - since this is not an ongoing endeavor, you won't necessarily have to register a business. You will, however, be required to fill out a “self-assessment.”

As stated here, however, "It’s a legal requirement to register with the taxman as a new business as soon as your combined earnings (from your full-time employment and any other work) exceed your personal allowance." So there is some gray area here.

Your best bet is to call HMRC directly. Apparently, you can ask them to “amend your tax coding” to account for the miscellaneous income.

There was proposed legislation to allow for up to £1000 exemption on side income. However, as of April 2017, this bit of legislation was shelved, so don't count on it just yet.

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