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Topic Title: tax
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Created On: 10 October 2012 10:11 PM
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 10 October 2012 10:11 PM
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wylexman

Posts: 68
Joined: 12 March 2011

evening all,
im going to register self emplyed and be paye aswell as i only have bits coming in at the moment (currently employed),
im not sure how itll work do i pay all my self employed money into a seperate account and then pay my tax and ni out of that, can i transfer any to my account or spend it etc. im getting confused by what different people are telling me.
 10 October 2012 10:21 PM
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slittle

Posts: 3374
Joined: 22 November 2007

My advice would be find a good accountant, they will cost you a few hundred pound but if you get a good one they will save it as well.

From what I remember if you are PAYE and SE there are options as to how you pay your SE tax bill

I would certainly run it as a separate account as it will make the books easier. Of course you can transfer some out, at worse you'll be paying 50% of it in NI and Tax but at best a lot less than that.

Good luck with the self employment


Stu
 10 October 2012 10:28 PM
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Legh

Posts: 3435
Joined: 17 December 2004

Its pretty straight forward. Not sure what it will be next year.
As a self employed single trader you'll be expected to fill in a self assessment form and if your gross income ( turnover) is under £70k, and you're not running several business in parallel ie registered to the selling dvds on a market stall while trading in metals on street corners
you'll be sent a short Tax return form.
It will include all income from all sources including employers, self generated, rental, and other income sources.
Its up to you to keep your accounts up to date and maybe expected to prove it on occasions. and don't miss the deadlines as you will be penalized .

Legh

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 10 October 2012 10:28 PM
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daveparry1

Posts: 5887
Joined: 04 July 2007

On the self assessment return there is a box you can tick if you don't want your self employment tax to be taken using your paye code,

Dave.
 10 October 2012 10:29 PM
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alpelec

Posts: 89
Joined: 04 November 2008

I would say phone HM Revenue & Customs, tell them your circumstances, and see what they say, since they are who you pay any tax to.

Regards

Tony
 10 October 2012 10:31 PM
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daveparry1

Posts: 5887
Joined: 04 July 2007

I will say they are very helpful on the phone.
 10 October 2012 11:56 PM
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sparkiemike

Posts: 1513
Joined: 24 January 2008

This radio program that was on today might be useful

I have not listened to it yet but heard them talking about it earlier, apparently they dicuss self-employed and employed status

Money Box Live - Part-time working 10/10/2012

Part-time working

Duration: 30 minutes

Part-time working: More than 8 million people in the UK now work part-time. For some, working part-time is a choice, giving them time to bring up a family or care for an elderly relative. For others, it's a necessity because they can't find a full-time job in the current economic climate.

If you're amongst the millions of part-timers in the UK, do you know your rights? Perhaps you are self-employed and work part-time. If you have children or need to care for a family member, is your employer obliged to let you work part-time? How will part-time work affect your pension, your tax or your benefits? What about maternity rights, holiday entitlement and sickness provision? How can you ensure you're getting the same rate of pay, pro rata, as your full-time colleagues?
 11 October 2012 12:25 AM
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Yooj

Posts: 186
Joined: 19 June 2009

As mentioned, you will do a Self assessment tax return. You should use your P60 to assist you to fill out your returrn. Basically, you will add together your earnings from both the PAYE job and your self employed earnings. You will also then include the amount of tax you have paid, which will be from your PAYE. You then fill in your expenses etc. Make sure that you get this in before the deadline for the HMRC to calculate your tax, which then makes the whole process a lot easier... Furthermore, should you make a loss during your first three years of trading, you can then claim a tax rebate from your last three years of PAYE tax paid.
I would highly recommend you do some reading on the HMRC website... Whilst there is a mountain of information on there, a lot is very good, and is great in helping you out understanding what your expense and capital allowances are.
Finally, don't be scared initially to manage your own tax/business financial affairs, as this will stand you in good stead as your business grows.

Yooj
 11 October 2012 09:50 AM
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davebp

Posts: 104
Joined: 16 April 2009

It's really easy, - just register as self employed, there's opportunity to list your full-time employer, and in your tax return you just make sure your final earnings from your P60 are included. Assuming you earn more than the tax threshold in your full time work, everything you earn on top will be eligible for tax, but of course this is offset by materials and all the costs associated with being a small business (e.g. scheme membership, insurance, calibration etc.) - I genuinely don't make too much from my moonlighting, - but think it's worth doing for pocket money and as a plan B when my current employment finally collapses!

On the HMRC website there are some examples of exactly your situation, - trades person who works full time for a company but who earns 'x' working evenings and weekends doing jobs on the side.

It's unlikely you'll need an accountant to start off with, much better to keep on top of receipts and invoices and try not to spend that money you'll need to pay the tax bill! If you're doing well, you may be issued with a new tax code that you'll need to pass on to your full time employer, - mine's not changed though as my earnings don't warrant it.

Oh, and you may want to claim exemption from national insurance for your freelance earnings, - I think this is based on your projected earnings. - You need to take the lead on this though as you'll automatically get billed if you don't pursue this.

Dave.
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