HMRC has launched a new "Help for Hustlers" campaign to help people who are earning extra income, figure out if they need to pay tax on the additional earnings. The campaign runs until the end of March and focuses on five key areas where tax might apply:

1. I’m buying or making things to sell.
2. I’ve got a side gig.
3. I work for myself with multiple jobs.
4. I’m a content creator or influencer.
5. I rent out my property.

The good news is there are two £1,000 tax allowances — one for property income and one for trading income. If you have both types of income, you can claim £1,000 for each.

• Trading Allowance: If you make up to £1,000 from self-employment, casual services (like babysitting or gardening), or renting out personal equipment (such as power tools), this income is tax-free and does not need to be declared.
• Property Allowance: If you earn £1,000 or less from property-related activities (like renting out a driveway), you do not need to report it to HMRC or include it in your tax return.

These allowances cover all relevant income before expenses. If your income is under £1,000, it’s tax-free. If you earn more than £1,000, you can choose to either deduct the £1,000 allowance from your income or list your actual expenses when calculating your taxable profit.

However, if your side hustle income goes over £1,000 in a tax year, you may need to complete a self-assessment tax return. Keep in mind this only applies if you are actively trading or selling services. If you are just clearing out some old stuff and selling it, there is usually no need to worry about tax.

The Ministry of Justice (MOJ), together with HM Courts & Tribunals Service (HMCTS) and the Minister for Courts and Legal Services, has announced significant improvements in probate waiting times. Probate is a legal process through which a deceased person’s will is validated and is the starting point for the distribution of funds to beneficiaries.

According to newly published data, the average waiting time for probate in December 2024 was just over four weeks. This represents a sharp reduction from 12 weeks at the close of 2023 and more than eight weeks at the end of June 2024. This achievement is part of a plan to address the backlog of cases that accumulated as a result of the Covid-19 pandemic by recruiting additional staff.

Approximately 80% of grant applications are now processed online, with digital submissions typically taking just over two weeks to complete. For applicants who submit their documents without complications, probate can often be granted in under a week. Meanwhile, the processing time for paper applications has been reduced from more than 22 weeks to just under 15 weeks.

The Minister for Courts and Legal Services remarked:

'We know that handling probate can be tough for families at a difficult period in their lives. That is why so we’ve worked hard to reduce delays and make the process easier. 

By cutting wait times and going digital, we’re ensuring people receive the support they need quickly at what can be a challenging time.

We’re getting public services back on their feet again as part of this Government’s Plan for Change.'

Even if you have never been employed, you might have been eligible for NI credits without realising it. For example, if you have been a carer for a sick or disabled person for more than 20 hours a week, you could have claimed Carer's Credit. Similarly, if you have been receiving certain benefits, such as Jobseeker's Allowance or Employment and Support Allowance, you might have automatically received NI credits.

It's a good idea to review your personal history to see if there are any periods where you might have been eligible for NI credits. If you identify such periods, you can contact the HM Revenue and Customs (HMRC) to see if your NI record can be updated accordingly.

Paying Voluntary Contributions

If you are below the State Pension age and have gaps in your NI record, you can choose to pay voluntary contributions to boost your State Pension entitlement. This can be particularly beneficial if you have some qualifying years but not enough to reach the 10-year minimum.

Before deciding to pay voluntary contributions, it's important to:

• Check Your National Insurance Record: This will show you any gaps in your contributions and how they affect your State Pension forecast.
• Evaluate the Cost: Voluntary contributions come at a cost, so you'll need to assess whether the potential increase in your State Pension is worth the expense.
• Consider Your Health and Life Expectancy: If you're in poor health, it might not be financially beneficial to make voluntary contributions.

You can find more information on paying voluntary NI contributions on the GOV.UK website.

Deciding whether to incorporate your business in the UK involves evaluating several key factors:

Limited Liability Protection

Incorporating as a limited company creates a separate legal entity, safeguarding your personal assets from business debts and liabilities. This means your personal finances remain protected if the business faces financial difficulties.

Tax Implications

Operating as a limited company can offer tax advantages. Companies pay Corporation Tax on all trading profits at a maximum rate of 25%; for smaller companies, this rate can be as low as 19%. Additionally, dividends distributed to shareholders are not subject to National Insurance, potentially providing a more tax-efficient method of remuneration.

Administrative Responsibilities

Incorporation brings increased administrative duties, including:

• Regulatory Compliance: Registering with Companies House, filing annual accounts, and submitting confirmation statements are mandatory.
• Record Keeping: Maintaining detailed financial records is essential to meet legal obligations.
• Costs: Expenses include registration fees and potential professional services for compliance.

Professional Image and Credibility

A limited company structure can enhance your business's credibility, potentially attracting more clients and investors. This formal structure often instils greater confidence among stakeholders.

Business Growth and Investment

Incorporation facilitates business expansion by allowing:

• Equity Sharing: Issuing shares to raise capital from investors.
• Succession Planning: Simplifying ownership transfer, ensuring business continuity.

Conclusion

Incorporating your business offers benefits like limited liability and potential tax efficiencies but comes with added administrative responsibilities. It's crucial to assess your specific circumstances, financial goals, and the current economic environment. Please call if you need help considering your options.

Health professionals providing medical services may be exempt from VAT if their work falls within their registered profession and primarily protects, maintains, or restores health. HMRC outlines specific exempt services, including diagnosis and treatment.

The VAT liability of goods and services provided by registered health, medical, and paramedical professionals, can be a complex area of tax law. HMRC’s guidance provides clarification on the definition of medical services and outlines the specific health services performed by registered professionals that are exempt from VAT.

If a health professional, as defined by HMRC, provides services, those services are generally exempt from VAT, provided that both of the following conditions are satisfied:

1. The services fall within the profession in which you are registered to practice.
2. The primary purpose of the services is the protection, maintenance, or restoration of the health of the individual concerned.

For VAT purposes, the definition of medical services (including medical care and treatment) is limited to those that meet the second condition outlined above. This includes services such as the diagnosis of illnesses, the provision of analyses of scans or samples, and assisting a health professional, hospital, or similar institution in making a diagnosis.

HMRC provides examples of services that are considered to meet the primary purpose of protecting, maintaining, or restoring a person’s health. These include:

• Health services provided under General Medical Services (GMS), Personal Medical Services, Alternative Provider Medical Services, General Dental Services, and Personal Dental Services contracts
• Sight testing and prescribing by opticians (limited to England, Wales, and Northern Ireland)
• Primary and secondary eye examinations (limited to Scotland)
• Enhanced eye health services
• Laser eye surgery
• Hearing tests
• Treatment provided by osteopaths and chiropractors
• Nursing care provided in a patient’s own home
• Pharmaceutical advice
• Services involving the diagnosis of an illness or the provision of analyses of samples that are a key part of a diagnosis

Additionally, certain insurance or education-related services may also be exempt from VAT, regardless of their primary purpose, as they could qualify under other independent exemptions.