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Private tutoring and tax

Discussion in 'Private tutors' started by lou1990lou, Jan 1, 2015.

  1. lou1990lou

    lou1990lou New commenter

    Hi,

    How does tax work for private tutors? Whenever I search for it, all I get is something to do with being self-employed which to me seems like they think you'd be doing it full time (or at least for most of your working hours).

    If I were to start tutoring a student once or twice a week (time permitting for both myself and the student) would I need to start paying tax on that income as well as paying the tax from my F.T. teaching job?
     
  2. GordonNome

    GordonNome New commenter

    The short answer is yes, of course you have to pay tax on that money.

    Luckily it's not all that hard to do. You register as self-employed. Then you keep really good records of what you earn and your expenses. At the end of the year you fill out a tax return. There is a space where you enter what you got PAYE (ie what you earned from your full time job) and another space where you enter your turnover (the money you got in from tutoring), your expenses and the final amount on which you have to pay tax. If you do it online you get the answer immediately as to how much tax you have to pay. You should be able to work it out roughly based on what percentage you pay of your FT salary. I would reckon on between 25% (if you are at the lower end of teacher wages) and about 40% (if you are considerably higher up the wage ladder). You can google and find out how to calculate it.
     
  3. langteacher

    langteacher Occasional commenter

    don't leave it too late. I have done mine all but clicking submit...when I did it told me the password was wrong...the same password that was stored on my computer from last year which logged me in and saved all my details then when I got to the last page iy was still stored but this time it told me it was wrong!! I had not even touched it. They are sending me a new one in the post but I have to wait up to ten days
     
  4. To add to the posts above, watch out for payments on account. Essentially, if you earn over a certain amount through self-employment (rules are over £1000 of tax from self-employment) alongside your other income then you will be asked to pay a pretty chunky contribution towards the next year's tax AT THE SAME TIME as paying for the previous year. This is automatically calculated based on the previous year's earnings, and can be sizaeable. If your earnings are likely to be smaller, you will need to tell HMRC for that tax year that you want to reduce your payments on account.

    This catches a lot of newly self employed people out.

    [This comment/section has been removed for breaching our Community Guidelines]

    Good luck!
     
  5. GordonNome

    GordonNome New commenter

    Yes indeedy, I got caught out on that one last year and suddenly had to find an extra 50% of my tax bill to pay up front.

    Rules on personal allowances changed, and equally suddenly I find this year that I am due a hefty rebate and have nothing to pay in advance. Won't get caught a second time though and will always make sure I have double my expected tax bill available just in case...
     
  6. Definitely agree on having a stash fund. I used to save 50% of tuition income until that year's tax bill had gone through. Way more than necessary, but it stopped me from running out, plus meant I had a savings account!
     
  7. Another option would be to join a local agency that operates PAYE and ask to be paid through them. You then won't have the tax on account problem. The downside is that you have to pay a small payroll fee (about 70p per hour). The upside is that all of your work is taxed at source, so you have no paperwork. You can still claim legitimate expenses and you also receive full insurance.
     

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