We have been asked by some UK based tutors whether the income that they earn by private tutoring at home and online is liable to income tax.

If you privately tutor, the money you earn is taxable. If your only source of income is from tutoring, then you only physically pay tax if your income exceeds £8,105 (tax year 2012-13). If you are receiving a pension beware, this is treated as income and tutoring income might take you over your personal tax allowance, meaning you will have to pay tax. If you have another occupation, e.g. full time teaching and already earning over £8,105 then you will have to pay tax.

There are items that you can use to reduce your tax liability. For example, within reason you can offset:

  1. Travel costs, to and from where the student lives
  2. Marketing costs, e.g. ads and business cards
  3. Materials, e.g. books
  4. Telephone call charges
  5. Costs of your own tutoring website.

You may have noticed press reports that Her Majesty’s Revenue & Customs (HMRC) are targeting tutors as a means to close a £42bn tax shortfall. Pleading ignorance is no excuse.

If you are confused or need help, our recommendation would be to speak, in the first instance, to HMRC or see someone face to face in their local Tax Enquiry Centres, who will be able to provide advice for free. Accountants will provide valuable support, but will charge a fee for their time.

Feel free to ask any questions / issues you may have on this subject, as comments to this blog post.

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