Can anyone help?

[xmarley21x]

Hi guys

 

just wondering if anybody can give me a bit of advice here. Its on tax, its so confusing im obviously looking it up on the internet but me and figures do not mix so if anyone could shed some light you would be star! Iv got a job in which i get paid about 11/12k a year, and i get charged 20|% tax. I then became self employed as well in june and my earnings should be around 5,000 or under so as im aware this will go down at 20% tax but then obviously i have all my reciepts and invoices for the money that i have set up for materials when i started out, and everything else i buy, so is this right, say i earn 5,000 till i do my tax return, its 20% on tax so that would be £1000 to tax man but then i deduct all my reciepts from this and everything iv bought and whatever else is left i pay to tax man....just wanted to make sure that it will be 20%, as it would only be 17,000 a year surely i wouldnt get charged 40% for that? iv tried ringing hm revenue and i refuse to sit and listen to there music for 20 minutes on an 0845 number before i get through to them. sorry if iv confused you reading this

 

Marie x

[0742Sheff]

You won't go up to 40% tax on 17k a year.

 

I called the tax helpline just last week and was only waiting a couple of minutes. The guy on the phone walked me through every single part of filling in my tax return in just 10 minutes (i had all my figures written down before i called).

 

I can't give you specific help with your tax though. I am not clued up on it, hence why i was on the phone to them

[welshgirl]

For your job you'll be paying income tax as before, but presumably you will be paying Corporation Tax on your business's profits rather than income tax? You'll definitely need to speak to HMRC to set it all up though (and find out what type of accounts etc you'll need to provide).

 

All the best with the business!

[andyofborg]

For your job you'll be paying income tax as before, but presumably you will be paying Corporation Tax on your business's profits rather than income tax? You'll definitely need to speak to HMRC to set it all up though (and find out what type of accounts etc you'll need to provide).

 

depends if he's working as a sole trader or though a limited company.

 

if he's working through a limited company then he has the option of drawing salary through the paye system and also taking dividends too.

 

if he's working as a sole trader then expenses are counted against income and you are taxed on the difference.

 

each mode of operating has advantages and disadvantages, and either way offers significant tax/ni advantages. they also offer a number of traps for the unwary the consequence of which tend to be expensive and can result in a small stay in one of the ministry of justice's holiday camps.

 

rather than relying on the numerology proffered by the denizens on here the op would probably be better served by spending an hour with a decent accountant.

 

All the best with the business!

 

indeed, good luck