How Payments Work – Sugar Hill Hop

How Your Pay Is Calculated

This guide explains how Sugar Hill Hop calculates teacher pay for each session, what your tax position looks like, and what documentation we provide to support you. Whether you’re on a fixed fee or a percentage of income, this page covers exactly how the numbers work — and what happens with the tax side, so there are no surprises.

Your Employment Status

Teachers at Sugar Hill Hop are self-employed. This means you are not an employee of the school — you are an independent individual who provides teaching services. In practice, this means:

You are free to accept or decline any session — there is no obligation to teach on any given night.
You can teach at other schools or run your own classes elsewhere.
You teach your own style and use your own methods, guided by our shared values and the Code of Conduct.
There is no holiday pay, sick pay, or employment benefits — but equally, there are no fixed hours or contractual commitments tying you down.
Sugar Hill Hop does not deduct tax or National Insurance from your pay. You receive the full amount agreed.

This arrangement reflects the reality of how our teaching team works: most of our teachers have other jobs or commitments, teach their own material, and choose when and how often they want to be involved. It also keeps the barrier to becoming a teacher as low as possible — which matters to us, because we want to encourage people to share what they know.

The £1,000 Trading Allowance — Why Most Teachers Owe Nothing

This is the most important thing to understand about tax as a Sugar Hill Hop teacher, and it’s good news.

HMRC provides a £1,000 Trading Allowance for people with small amounts of self-employment income. If your total self-employment income from all sources (not just Sugar Hill Hop) is under £1,000 in a tax year (6 April to 5 April), then:

You do not need to register for Self Assessment.
You do not need a UTR (Unique Taxpayer Reference).
You do not need to file a tax return.
The income is completely tax-free. You owe nothing.

For most of our teachers — earning between £10 and £30 per session across perhaps 20 to 40 sessions a year — total annual earnings sit comfortably in the £200–£900 range, well within the allowance. You simply receive your pay, and that’s it. No forms, no admin, no tax.

We track your earnings for you. Our system monitors how much each teacher has earned during the current tax year. If you’re approaching the £1,000 threshold, we’ll let you know in good time so you can decide how you’d like to proceed. Your options include:

Keep teaching and register with HMRC — if you’re happy to file a tax return, we’ll help you through it (see below).
Pause paid sessions until the new tax year begins on 6 April.
Volunteer for remaining sessions — you keep teaching and stay involved, just without pay. This is a great option if you love being on the floor and don’t want to stop.
Defer payment — you continue teaching and earning, but we hold your pay until after 6 April so it falls into the next tax year. Under HMRC’s cash basis accounting (the default for self-employed individuals), tax is based on when you’re paid, not when you worked. This means you don’t lose any income and you don’t stop teaching — you just receive the money a few weeks later. We’ll issue the self-billing invoices with the actual payment dates, so everything is properly documented.
Adjust your rate for the remaining sessions of the year — we can agree a lower percentage or reduced fixed fee so your total stays within the allowance.

There’s no pressure and no wrong answer. We’ll give you the information and let you choose what works best for your situation.

Important: The £1,000 allowance covers your total self-employment income from all sources, not just Sugar Hill Hop. If you also earn self-employment income elsewhere — freelancing, tutoring, selling crafts, other dance teaching — those amounts count towards the same £1,000 threshold. We can only track what you earn with us, so please keep this in mind if you have other self-employed income.

Future change — Self Assessment threshold rising to £3,000

The UK government has confirmed that the threshold at which you need to file a full Self Assessment tax return will increase from £1,000 to £3,000 of gross trading income, expected to take effect from the 2027/28 tax year (no later than 2029). This means if your total earnings do not go beyond £3,000, you won’t need a UTR or a full Self Assessment return — instead, you’ll report and pay any tax due through a new simplified HMRC online service. The £1,000 trading allowance itself isn’t changing, so earnings up to £1,000 remain completely tax-free. We’ll update you when the new rules go live.

Reading:

What Happens If You Exceed £1,000

If your self-employment income crosses the £1,000 threshold, you will need to register for Self Assessment with HMRC and obtain a UTR (Unique Taxpayer Reference). We want to be upfront about what this involves, because it is additional work and responsibility on your part.

What registering means for you:

You must file a Self Assessment tax return every year by 31 January (for the previous tax year), even if you end up owing little or no tax. We help you with this by providing all the documents and figures you need — you won’t be left working things out on your own (more on this below).
You become responsible for calculating and paying any Income Tax and National Insurance owed on your self-employment profits.
HMRC may require payments on account — advance payments towards next year’s tax bill, based on what you owed this year.
From April 2026, Making Tax Digital for Income Tax will require quarterly digital updates for self-employed people earning over £50,000 (with lower thresholds expected in future years).
Once registered, you generally need to continue filing returns each year, even if your income drops back below £1,000 — until you formally tell HMRC you’ve stopped being self-employed.

This is not intended to discourage you — many people manage Self Assessment perfectly well, and for small amounts of teaching income, it’s usually straightforward. But we believe in being honest: registering for Self Assessment is a commitment, and you should make that decision with full awareness of what’s involved.

The silver lining: Even after crossing £1,000, you can still use the Trading Allowance as a flat £1,000 deduction instead of tracking individual expenses. Alternatively, if your actual expenses exceed £1,000, you can claim those instead — whichever gives you the better result. You cannot use both — it’s one or the other. Here’s how the two options compare:

Example: £1,800 Earned in the Tax Year

Option A — Use the Trading Allowance as a flat £1,000 deduction:

Total self-employment income	£1,800.00
Less: Trading Allowance	– £1,000.00
Taxable profit	£800.00

No receipts needed. You simply deduct £1,000 and pay tax on the remainder.

Option B — Claim your actual expenses instead:

Total self-employment income	£1,800.00
Less: Travel to venues (45p/mile)	– £400.00
Less: Dance shoes	– £120.00
Less: Training workshop/festival	– £200.00
Less: Music for classes	– £80.00
Total expenses	– £800.00
Taxable profit	£1,000.00

In this example, Option A is better — you’d pay tax on £800 instead of £1,000.

But if your expenses were higher — say you also paid £150 for professional insurance and £200 for additional training — your total expenses would be £1,150, giving you a taxable profit of just £650. In that case, Option B wins.

The rule is simple: whichever option gives you the lower taxable profit is the one to use. If your expenses are under £1,000, take the flat deduction and don’t worry about receipts. If your expenses are over £1,000, claim the actuals.

How to Register — And a Recommended Tool

You can register directly on the HMRC website at gov.uk/register-for-self-assessment, though the process involves creating a Government Gateway account and can feel a bit daunting if you haven’t used the HMRC website before.

An alternative we’d recommend is the Pie Tax app (available free on iOS and Android). Pie Tax walks you through the registration process step by step, and once you have your UTR, you can use the same app to file your Self Assessment tax return directly to HMRC — completely free. The app handles the calculations, lets you import bank transactions, track expenses, and submit your return without ever having to navigate the HMRC website yourself. It also has human tax assistants you can message within the app if you get stuck.

It typically takes around 10 working days to receive your UTR by post once you’ve registered, so if you’re approaching the threshold, it’s worth starting the process early.

What We Provide to Help You File

If you do cross the £1,000 threshold and need to file a tax return, our support comes in the form of giving you all the documents and figures you need to hand off — either to Pie Tax, another tax app, or an accountant. You won’t need to calculate your Sugar Hill Hop income yourself. Specifically:

Your Annual Earnings Statement gives you the exact total to enter as self-employment income on your tax return, broken down month by month with every session listed.
Each Self-Billing Invoice provides a per-session breakdown showing how your pay was calculated — useful if you need to verify any individual payment.
The statement tells you which SA103 boxes your income relates to, so you (or your app) know exactly where the numbers go.

In short, we handle the bookkeeping side, and your tax app or accountant handles the filing side. You’re never left staring at a blank tax return, wondering where to start.

Pay Types

There are two ways you can be paid for a session:

Fixed Fee — You receive a set amount regardless of how many students attend. For example, £30 per session. This is straightforward and doesn’t change based on the night’s income.

Percentage of Income — You receive a percentage of the session’s income after running costs have been deducted. This means your pay is directly linked to how well-attended the session is.

For some of our more experienced teachers, a blended arrangement may be agreed — combining elements of both. For example, a teacher might receive a small fixed base fee to guarantee a minimum, plus a percentage of income on top. The specifics of any blended arrangement are agreed directly between Sugar Hill Hop and the teacher.

Blended Example

Session income (after running costs)	£90.00
Fixed base fee	£15.00
Plus 15% of income	£13.50
Total pay	£28.50

In this example, even on a very quiet night, the teacher would still receive the £15 base. On a busier night, the percentage component grows, rewarding both the teacher’s experience and the session’s success.

How “Session Income” Is Calculated

Session income includes everything the session earns:

Door payments — Cash and card payments made by students on the night (walk-ins, single class payments).

Class card value — When a student uses a class card, the system attributes a portion of the original sale price to that session. For example, if a 10-class card was sold for £80, each use is worth £8.00. This attributed value counts towards the session’s income even though no cash changed hands on the night.

Term pass value (deferred) — Term passes work differently from class cards. A term pass gives unlimited access within a date range, and because we don’t know how many times it will be used until the pass expires, the term pass value is deferred — it is not included in your session pay until after the pass has expired.

Once a term pass expires (plus a short 9-day grace period for late entries), the sale price is divided equally across every session where it was used. This settled value is then added to each session’s income. For example, a £40 pass used across 8 sessions would add £5.00 to each of those 8 sessions.

Running Costs (Venue Expenses)

Before percentage-based pay is calculated, the venue’s running cost for that session is deducted from the income. This represents the cost of hiring the venue for the evening.

For example, if a session earns £200 in total income and the venue cost assigned to that session is £65, the amount available for percentage pay is £135.

The Calculation

Here’s the step-by-step formula for percentage-based pay:

Start with session income — door payments + class card attributed value + settled term pass value
Subtract running costs — venue hire assigned to this session
Subtract all fixed staff pay — any fixed-fee staff are paid first
Apply your percentage — your agreed percentage of the remaining amount

Example

Door payments (12 students × £10)	£120.00
Class card uses (3 × £8.00)	£24.00
Settled term pass (£40 ÷ 8 uses)	£5.00
Total session income	£149.00
Less: Venue cost	– £65.00
Less: Misc fixed fee	– £15.00
Available for % pay	£69.00
Teacher at 30%	£20.70

Term Pass Settlement — How Deferred Pay Works

Because the term pass value can only be calculated once the pass has expired and all uses are known, pay from term passes works in two stages:

Stage 1 — During the term: You are paid based on door payments and class card value only. Any term pass uses are noted, but doesn’t affect your pay yet. Your session page will show a “pending” indicator so you know there is deferred income coming.

Stage 2 — After the pass settles: Once the pass expires (plus 9 days), the sale price is divided evenly across all sessions where it was used. If your pay was calculated on a percentage basis, the additional term pass income increases the session total, and the difference is owed to you as a settlement top-up.

Example: Settlement Top-up

Originally paid (door + cards only)	£18.00
After term pass settles (+ £5 income)	£19.50
Top-up owed	£1.50

This top-up is tracked automatically. It will appear on your session record and in the reports, and will be paid separately, usually as a batch once all passes from that term have all settled.

Running costs still apply. When a settled term pass adds income to a session, the same deductions are applied as with any other income — venue hire and fixed staff fees come off first, and your percentage is only calculated on what remains. So if a pass adds £5.00 to a session and you’re on 30%, your top-up is £1.50, not £5.00. The remaining £3.50 goes towards the school’s venue rent and other running costs, exactly as it does with door payments and class card income.

The key benefit of this approach is fairness: the same per-use value is applied to every session the pass was used in, regardless of which venue or which week. No single session is overvalued or undervalued.

Class Cards — Consistent Per-Use Value

Class cards are simpler. A 10-class card sold at £80 always attributes £8.00 per use, regardless of when it’s used. The value is: sale price ÷ total credits on the card. This value is included in session income immediately — there is no deferral.

Loyalty Rewards

Sugar Hill Hop runs a loyalty programme where regular students earn a free class after a set number of paid visits. When a loyalty reward is triggered, that attendance is recorded at £0.00 — it does not affect the session income or your pay calculation.

Self-Billing — Why You Don’t Need to Invoice Us

Sugar Hill Hop operates a self-billing arrangement. This is an HMRC-recognised system where the buyer (Sugar Hill Hop) creates the invoice on behalf of the supplier (you, the teacher), rather than the other way around.

In practice, this means you never need to send us an invoice. We generate one automatically for each session you teach, with a unique reference number, the full pay calculation, and both parties’ details. This is standard practice for arrangements where the buyer has all the information needed to calculate the amount owed — which we do, since we run the sessions and record the attendance.

If you earn over £1,000 and register for Self Assessment, we will ask you to sign a short Self-Billing Agreement. This is a simple document (usually one page) that confirms you agree to Sugar Hill Hop issuing invoices on your behalf. It’s an HMRC requirement for self-billing arrangements and protects both sides. We’ll generate the agreement for you — you just need to review and sign it.

Documents We Provide

Whether you’re under or over the trading allowance, we believe in keeping clear records. If you do need to file a tax return, we provide everything you need so you’re not scrambling for figures at the end of the year. Here’s what’s available:

Self-Billing Invoice (per session) — Generated for each session you teach. Shows the session date, venue, how your pay was calculated, and the amount owed. Each invoice has a unique reference number (e.g. SHH-SB-00142). If you ever need to show HMRC how a specific payment was calculated, this is the document. These are generated automatically once your session pay has been recorded.

Payment Statement (any date range) — A summary of all sessions you taught within a chosen period, showing what was owed, what has been paid, and any outstanding balance. Useful for your own records or for checking everything adds up over a term or a few months.

Annual Earnings Statement (tax year) — A complete summary of everything you earned from Sugar Hill Hop during a UK tax year (6 April to 5 April). Includes a monthly breakdown, a full list of every session, and your total earnings for the year. If you need to file a Self Assessment tax return, this is the key document — it gives you the figure to enter as self-employment income. It also includes guidance on which box of the SA103 supplementary pages it relates to.

Self-Billing Agreement — The formal agreement between you and Sugar Hill Hop that authorises us to issue invoices on your behalf. Only needed if you’ve exceeded the trading allowance and registered with HMRC. We generate this for you — it covers the HMRC requirements under VAT Notice 700/62 and confirms your employment status, invoice numbering, and record-keeping obligations.

All documents are available as printable pages that you can save as PDF from your browser. If you need any document at any time, just ask — we can generate them on the spot.

If You Do File a Tax Return — What You Can Claim

If you’ve crossed the £1,000 threshold and registered for Self Assessment, you have two options when filing your return:

Option A — Use the Trading Allowance. Simply deduct £1,000 from your total self-employment income. You only pay tax on the amount above £1,000. No receipts or expense tracking needed. This is the simplest approach and works well if your actual expenses are modest.

Option B — Claim actual expenses. If your genuine business expenses exceed £1,000, you may be better off claiming those instead. You cannot use both — it’s one or the other. Expenses that HMRC typically allows for dance teachers include:

Dance shoes — Fully allowable. These are specialised pieces of equipment with no everyday personal use.
Travel to teaching venues — 45p per mile for the first 10,000 business miles if you drive, or actual public transport costs. Note: regular commuting to your normal workplace doesn’t count, but travel to temporary or varying venues typically does.
Training and workshops — Classes, workshops, and courses that maintain or improve your teaching skills.
Music purchased for teaching — Tracks or subscriptions used specifically for your classes.
Performance costumes — Clothing used exclusively for performances or showcases (not everyday dancewear or rehearsal clothes). HMRC recommends keeping photos of yourself wearing costumes in their performance context.
DBS checks — If you paid for your own enhanced DBS check.
Professional insurance — Public liability or professional indemnity insurance related to your teaching.
Phone and internet — The business-use proportion, if you use your phone for scheduling, communication, or music.

What you cannot claim: everyday clothing (even if you only wear it to teach), food and drink during teaching, gym memberships, or general hairdressing. HMRC applies a “wholly and exclusively for business” test — if something has a personal benefit too, it generally doesn’t qualify.

If in doubt, HMRC’s guidance on self-employed expenses is clear and accessible, or speak to an accountant. We’re happy to help point you in the right direction, but we’re dance teachers, not tax advisors — so for anything complex, professional advice is always worth it.

Where the Rest Goes

After teacher pay, venue hire, and direct session costs, the remaining income doesn’t sit idle — it funds everything that keeps Sugar Hill Hop running and growing.

Venue costs are the biggest ongoing expense. Beyond the per-session hire fee that’s deducted before your pay is calculated, there are longer-term commitments like deposits, insurance, and equipment that aren’t tied to a single session but are essential to keeping our doors open.

Marketing and outreach will cover everything from online advertising to printed materials, website hosting, and directory listings. This is what keeps new students finding us — which directly benefits everyone, because fuller classes mean higher session income.

Research and development funds new teaching resources, music licensing, training for our teaching team, and the time spent developing curriculum and class structures. It’s an investment in the quality of what we offer.

The Pay It Forward Fund is something we’re particularly proud of. A portion of class income goes into a fund that allows us to offer sponsorships and subsidised places for people who want to dance but can’t always afford to. Not every student walks in with the same financial circumstances, and this fund means we never have to turn someone away because of money.

Teacher and staff appreciation — from time to time, a portion also goes towards gifts and gestures of thanks for our teaching team and staff, because the people who make Sugar Hill Hop happen deserve to know they’re valued.

Festival funding is perhaps the least obvious but most important use of class revenue. Our annual festivals are run at a loss — the ticket prices don’t fully cover the cost of guest instructors, live musicians, venue hire, and production. That’s a deliberate choice: we want our festivals to be accessible and memorable, not priced to turn a profit. It is envisioned that the majority of our school’s income is directed towards making our annual festivals a reality; however, we are still working out exactly how this will affect our tax position as a business. If you have any insight into this, please come and talk to us. It is the cash flow from regular classes throughout the year that makes this possible. When you teach a night class, you’re not just earning your pay — you’re helping fund the events that bring the wider community together.

We share this because we believe in transparency. Your pay is calculated fairly based on session income, and the school’s share is reinvested directly into the things that make Sugar Hill Hop what it is.

Quick Reference — Your Tax Year Checklist

Your situation	What you need to do
Earning under £1,000/year from all self-employment	Nothing. Income is tax-free under the Trading Allowance. No registration, no return, no UTR needed.
Approaching £1,000	We’ll flag this for you. Options: register for Self Assessment now so your UTR is ready; pause paid sessions until 6 April; volunteer for remaining sessions; defer payment to the next tax year; or adjust your rate.
Over £1,000 — first time	Register via Pie Tax (recommended) or at gov.uk. Provide your UTR to Sugar Hill Hop. Sign the Self-Billing Agreement. File your tax return by 31 January.
Over £1,000 — already registered	Confirm your UTR is on file with us. Request your Annual Earnings Statement after 5 April. Use it to complete the SA103 self-employment pages of your tax return — or hand it to Pie Tax or your accountant.

Questions?

If anything about your pay doesn’t look right, speak to the session organiser. You can request a payment receipt for any session, which breaks down the full calculation.

For questions about your tax position, your Annual Earnings Statement, or any of the documents described above, speak to us directly — we’re happy to walk through it with you. If you’d like help getting started with Self Assessment, we recommend downloading the Pie Tax app — it’s free, it’s designed for exactly this kind of situation, and it’s a much friendlier experience than the HMRC website. And if your situation is more complex (for example, you have multiple sources of self-employment income or you’re unsure whether to claim expenses or the Trading Allowance), we’d always recommend speaking to a qualified accountant or using HMRC’s free Self Assessment helpline.