Any one know about this (Maybe need an accountant to answer :))

Mason64

Mason64

Mason64

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Hi

I work full time at the moment and earn just over minimum wage, Pays my bills and mortgage so cant complain at the moment.

I am starting my own little business to do in my spare time, This will maybe make £2 to 3 or maybe 4k a year. I will want to declare all this but do you think i will get Taxed like mad on it. Would it be worth it due to tax reasons? Will it interfere with my current wage at all?

I just need to know the basics really before i go spend to see an accountant.
 
It depends on how you take the profits and how the business is set up, but tbh you won't be taxed like mad.

I think you could take dividends instead but you'll pay higher corporation tax, not 100% sure as tax isn't my strongest point
 
The most simple way would be to declare it through a PAYE self assessment, in which case it would be taxed like normal income.

Its probably best to see an accountant though or talk to CAB though.
 
Mason64 said:
I just need to know the basics really before i go spend to see an accountant.
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Are you claiming any benefits? Housing benefits, reductions in council tax, tax credits...any thing at all?
If not, then there is no real reason for you to register a business and declare any extra earnings.
You only have to pay tax on a registered business, but you do not have to register it in the first place. Most people overlook that fact.

And for the sake of a couple grand a year? I wouldn't bother.
 
You'll pay tax at 20% of profits.

Also, make allowance for paying next year's tax in advance.

You will need to prepare simple accounts - income, less expenses. You should be able to do this yourself on excel. And the tax return is straightforward. I wouldn't get an accountant involved for such low income - it'll just eat a couple of hundred quid into your profit.
 
stopper - i am claiming nothing. just me and my g.f live in the house, no kids no benefits at all.

So the best way would be PAYE self assessment - Try and make as little profit as possible by spending it on stuff i need for my lifestyle anywy ( for example if i buy a new computer put it in as an expense? )

Think that would be the best way?
 
Well, obviously no-one should advise you to claim expenses that aren't business related against your business income...

But I'm sure your business would use a computer etc

Don't worry about paying tax on the profits of the self employed business, you will pay no more or less tax on the profits than if you just earnt it in your job, and it's always worth earning more money, no? :p

As Cheesyboy said, if your only looking to turn over 3-4k, then the income/expenditure will be very straight forward, and sure an accountant will probably be able to claim for some things you didn't know about, but at that level their charge will probably be more than they save you.

So just register with the HMRC as self employed, register online for the Self Assessment and fill it in yourself. It's fairly straight forward and will do all the tax calculations for you.

Just keep all your paperwork (invoices/receipts) in an orderly manner, don't go silly claiming for everything that has nothing to do with your business and you will have nothing to worry about.
 
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Don't keep quiet about it.

Depending on how you earn the money it will become increasingly difficult to keep quiet about it.
 
Don't keep quiet about it.
Register as self employed. Keep all receipts for business purchases and log your business mileage. 45p for the 1st 10k miles then 25p per mile thereafter.

Depending on what you need to do to get set up you may run at a loss and then pay less tax in your employed job.
 
You'll almost certainly be better off as a sole trader for that amount rather than incorporating.

You'll also need to do a tax return, declare the income and pay income tax on it (unless it is not taxable for some reason - which sounds unlikely). Not to do so would be concealing income, i.e., tax evasion and a fraud on the Exchequer - a criminal offence.
 
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Pudney said:
You may not need to do a tax return.
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Just make sure you run the business at a loss on paper and then you never pay tax. Its all about the cash flow. Buy as much as you can through the business and take everything you can as an expense.

Going on holiday? now its a business trip...
 
Howdy,
I have been self employed for 3 years now

Start of this year I went part time on business and took a full time job as well

You are better registering your business upon starting it up and then working out the tax you are liable for is a piece of ****

extracting the urine when it comes to expenses will land you in jail if you get audited (fraud)
 
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