Tutoring is a great way to earn money while doing some good (especially as you can fit it round your busy schedule!).
The more hours you clock up, the more you probably start to wonder if you need to tell HMRC about your extra income. That’s why we've written a brief overview of all things tax you need to consider when you tutor through MyTutor.
When do I need to tell HMRC about my tutoring income?
HMRC allows you to earn £1,000 a year before you have to declare your income to them. This is your 'tax free allowance' and applies to anything and everything you earn (whether it’s solely from MyTutor, or from other places too).
If you earn more than £1,000 in the year from April to April, you need to declare this income to HMRC through a Tax Return (also known as a Self Assessment).
If you're not sure if you’ve earned that much, you can find your total income by going to your Income page on MyTutor. And if you work across the private and schools side of MyTutor, make sure you take the total of your invoices and your payslips!
If you work on the private side of MyTutor, the MyTutor fee should not be included as part of this £1,000 - so make sure to include only what you take home.
As a school tutor, you have holiday pay rolled up with your earnings - make sure to keep it included on your tax return, as this is taxable income.
What do I need for my tax return?
- A Unique Tax Reference (UTR) number
- Your personal details
- An overview of your earnings (from MyTutor and others)
While you may already have your personal details and overview of your earnings to hand, most people don't have their UTR.
A UTR is a 10 digit number that you get from HMRC after you register to do a tax return. It's very similar to your National Insurance number, but it's specifically used for your tax return.
You can register for a UTR directly with HMRC or do it for free with the Earnr app.
While most UTR registrations take 10 business days, they can take up to 10 weeks - so make sure you do this as soon as possible.
I already have a UTR - what do I do next?
You'll need to submit your tax return to HMRC. A tax return, or Self Assessment, is an overview of your earnings for the year. This includes your MyTutor income, but it can also include income you receive from employment, letting out a room, dividends, interest, or any other capital gains you've made.
You can submit your tax return directly with HMRC, an accountant, or through an app like Earnr (which will significantly speed up the process, and take out the confusion)!
What tutoring expenses can I include on my tax return?
You can only expense things that you need to run your tutoring business. In the words of HMRC, anything expensed needs to be 'wholly and exclusively’ for the business. This includes any materials you use to tutor like pens and paper.
Rather than keeping an itemised list of all your expenses, the Trading Allowance is a great benefit to take advantage of. The £1,000 trading allowance allows you to assume you've incurred £1,000 in expenses (even if your expenses are less than £1,000).
Using the trading allowance will likely save you hours of work preparing your tax return (and relieve you of the stress of doing something wrong)!
When do I need to submit my tax return?
Your tax return can be submitted from 6 April each year, and covers all your earnings from April to April (the tax year). The latest you can submit this to HMRC is 31 January.
Do I need to pay tax when I submit a tax return?
Not necessarily. If you earn less than the tax threshold in the UK, then you don't need to pay any income tax or National Insurance.
If you do earn above this threshold, then you will be taxed over your income. For the 2021/22 tax year, the thresholds you want to keep in mind are:
- You don't pay income tax if you earned less than £12,570
- You don't pay National Insurance if you earned less than £9,564 (This is only the case if you earn less than £6,515 from your self employed income)
Luckily the National Insurance threshold is planned to go up in July 2022, which means you’ll likely pay less tax if you earn more than £9,564.
You may still want to voluntarily pay National Insurance to start saving up for your state pension and state benefits like maternity leave and statutory sick pay.
How can I make this whole process easier?
Dealing with tax isn’t always accessible or easy, especially when you're busy enough with uni, tutoring, and a social life! Using an app like Earnr can make it easier to stay on top of your income and tax return before the deadline.
There are many benefits to submitting your tax return early including the ability to spread your tax bill across 10 months as opposed to one lump sum. It also means one less admin task hanging over you!
In addition to this, if you’ve earned less than £3,000 as a tutor in the last tax year, we'll help you do your tax return for free! To get started, just download the Earnr app from the IOS App Store or the Google Play Store.
Other Tutoring articles
Looking for more? Why not check out some of the other articles we've written to help you with your tutoring business.
