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I'm working full time as a software developer at a research institution in the UK. I've now been approached by a company in Vietnam to do some translation work for them (English -> German). I've translated things for them before for free. This time they offered to pay me a small amount of money (less than 200 GBP).

I would like to accept the offer, but am unsure what the tax implications would be. Do I have to declare it and pay tax?

As a hypothetical question: they want to transfer the money via PayPal. Would HMRC even know?

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HMRC may or may not find out about it; the risks and penalties involved if they do find out make it unwise not to just declare it and pay the tax on it.

Based on the fact you asked the question, I am assuming that you currently pay all your tax through PAYE and don't do a tax return. You would need to register for Self Assessment and complete a return; this is not at all difficult if your tax situation is straightforward, which it sounds like yours is. Then you would owe the tax on the additional money, at whatever applicable rate (which depends on how much you earn in your main job, the rate tables are here: https://www.gov.uk/income-tax-rates/current-rates-and-allowances ).

If it truly is a one off you could simply declare it on your return as other income, but if it is more than that then you would need to look at setting up as Self Employed - there is some good advice on the differences here: http://www.brighton-accountants.com/blog/tax-self-employment-still-employed/ :

Broadly, you are likely to be running a business if you have a regular, organised activity with a profit motive, which continues for at least a few months. If the work is one-off, or very occasional (say, a few times per year), or not very organised, or of very low value (say, under £2,000 per year), then it might qualify as casual income.

If you think it is beyond the definition of casual income then you would also need to pay National Insurance, as described in the previous link, but otherwise the tax treatment would be the same.

  • Thanks for the detailed answer. So assuming I'm within the "Basic rate", that would mean that I'd have to pay 20% of what I receive as this one-time income as tax, right? – Baz Aug 28 '17 at 8:53
  • Yes, that is correct. – Vicky Aug 28 '17 at 11:29
  • Assuming I had a bank account in Germany as well, but I was a British resident (but German citizen). Would it make any difference if I had them transfer the money to that account instead? – Baz Aug 28 '17 at 13:40
  • I don't know. International tax affairs are complicated - I think you might be better off consulting an accountant or small business financial advisor. – Vicky Aug 28 '17 at 15:00
  • Probably not worth it for such a small amount of money. Thank you for your answer though, it was really helpful! – Baz Aug 28 '17 at 15:09

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