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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4075
Experience:  FCCA FCMA CGMA ACIS
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I am a UK citizen. I haven’t paid tax in the UK since 1996,

Customer Question

I am a UK citizen.
I haven’t paid tax in the UK since 1996, which was the last time I had a job here. At the end of 1996 I started working on cruise ships and was paid in US$.
I finished working on ships in 2011, and returned to the UK. I’ve been living here in the UK since 2011. I haven’t had a job and I haven’t claimed any benefits – I use the money that I saved while working on ships to pay my living costs.
I now write short stories, which I submit to magazines and online publications. I have received no payments yet, but the plan is to make a living/career from my writing.
What happens when I receive my first payment? Do I need to declare it?
Should I register with HMRC now, even though (up until now) I have not made any money from my stories?
Will HMRC ask how I’ve been supporting myself? Or look at taxing me for the money that I earned on ships?
Should I register as self-employed? Am I currently eligible for some benefits?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

You should register with HMRC as self employed, probably when you have received your first remuneration. That Department will then send you a self assessment tax return to complete at the conclusion of each tax year.

If you were on ships for over a year then you are entitled to Seafarer's Allowance and are not liable to UK taxation. HMRC are most unlikely to make inquiries as to your circumstances. Recent austerity has greatly reduced their ability and enthusiasm for fishing expeditions.

I do hope that you have found my reply of assistance.

Customer: replied 1 year ago.
Hi, Keith.So, for example: If I receive a £75 cheque tomorrow, then I should inform HMRC? How? By calling them? And is self-employed the way for me to go, or would that be a conversation I had with HMRC?I worked on cruise ships for 15 years, spending maybe 2/3 months each year in the UK. HMRC would not be interested in taxing me for the US$ I earned during that period? And they would not be interested in my not having a job/not paying tax/living off my savings since returning to the UK in September 2011?
Expert:  bigduckontax replied 1 year ago.

No, you should merely register for self employment with HMRC. The only reason I mentioned remuneration was because there is little point in registering before you had some income!

You should consult HMRC regarding your entitlement to Seafarer's Allowance, a highly complex subject especially as you appear to have been employed on an overseas registered ship. The relevant contact details can be found here:

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/seafarers-tax-enquiries

Customer: replied 1 year ago.
only talk to HMRC when I have received my first payment, of any amount? Even amounts that don't exceed the personal allowance of 11K p.a.? There is no action for me to take until I receive a payment?
And, I'm not totally conversant with the pros/cons of self-employment. Will HMRC advise me regarding self-employment, and if it's the path I should take?
Customer: replied 1 year ago.
also...
I returned to live in the UK in September 2011. I've not had a job since then, so I've not received any income, nor paid any income tax or national insurance contributions. While this is unusual, I'm not doing anything wrong, right? Are there taxes that I should be paying?
I'm basically living off my savings...it feels like I'm 'off the radar', as I don't have a regular job, no income, and I'm not paying any taxes.
Expert:  bigduckontax replied 1 year ago.

There is no point in my opinion in registering for self employment until you receive your first remittance. When you make your return and if your income proves to be relatively low HMRC may well tell you that you need not self assess in future.

The notes provided with your tax return are pretty comprehensive. In the meantime you should maintain proper books of account to record income and expenditure.

If you have no income then there is no IT or NI to pay. Council Tax for the living accommodation you occupy is, of course, quite another matter. You should be reminded of any shortfall in NI contributions annually. Remember you need 35 years of having your card stamped, to use an old expression, to obtain full state benefits at retirement age.

You are indeed of the radar, but I would gently point out that until you start earning from self employment that is perfectly correct.

Customer: replied 1 year ago.
when I receive my first payment, that's when I should inform HMRC? Is there a dedicated department/number to contact for this? At that point, they will send me a self assessment tax return to complete at the conclusion of the tax year? And they won't be interested in my current 'off the radar' status? Is my understanding correct?And regarding self-employment:
I can live off my savings for two more years, during which time I plan to write short stories and make money from my writing, hopefully to make it my career. Is self-employment the route I should take?
Expert:  bigduckontax replied 1 year ago.

Here is the HMRC link for registering:

https://www.gov.uk/new-business-register-for-tax

They will send you a self assessment tax return to complete at the end of each tax year [5 April].

Authorship seems an appropriate self employment to take in your circumstances.

Customer: replied 1 year ago.
when I receive my first payment, I contact HMRC. At that point I would tell them I'm self-employed, or would that be something they would decide for me?
I guess I would need to look into self-employment, and see if it's right for me. Or are there other ways of doing it? I will be setting up a website/blog, but does that make it a business?
Expert:  bigduckontax replied 1 year ago.

No, you would declare your being self employment yourself.

If your web site pays you income then it would be part of your self employment.

You could form a limited company, but that would be a bit of a palaver running it and probably not worth the effort.

Customer: replied 1 year ago.
given my circumstances, and after researching self-employment, would you advise me to register as self-employed (when I receive my first payment)?
Expert:  bigduckontax replied 1 year ago.

Yes similtaneously.

Customer: replied 1 year ago.
Thanks, Keith.
It's a lot to take in, but I think I'm getting my head around it. If any further questions occur to me, tomorrow or the next day, can I ask them without incurring any further fees? Obviously, it would be questions on this issue, and not a separate matter.
Expert:  bigduckontax replied 1 year ago.

No problem with follow ups at all even after rating.

Please be so kind as to rate me before you leave the Just Answer site.

bigduckontax and 2 other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Is a record of our conversation kept on this site?
Expert:  bigduckontax replied 1 year ago.

It is indeed, it is an open site.

Thank you for your support.