declaring tax etc

I am no accountant but you have a personal tax free alllowance of about £6000 I think. This is the same as if you were employed. The way in which you choose to set your business up and the way in which you pay yourself effects the tax you pay.

Since I cannot help you directly, let me try and help you indirectly.

Speak to your local business link. It is free and they run courses on tax and accountancy free of charge. They also let you get free legal advice and generally support you a lot.
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Hi,

The way you have asked this question shows that you need more advice than you'll get from a forum, either contact business link: http://www.businesslink.gov.uk (for free) or get a book keeper, (they are not usually expensive and you can off-set the cost of them against any tax you may have to pay, they should save you money and they'll stop you from getting in trouble with the tax man)

The long and short is that you need to declare all your income to HMRC. You will almost certainly have an allowance, (this is an amount of money that you can earn without paying tax) and you can off-set the costs of your business against your earnings so that if you pay tax then you're only paying tax on money that is actually yours and not been used to buy stock etc. for the business.

i hope that makes sense.

good luck.
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oops sorry tdl, i must have been typing at the same time.
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Hi there,

Try the new HMRC guides on everywoman. There are a range of video and written guides on tax: http://www.everywoman.com/ResourcesAdvice/Finance/#TaxApp

Hope that helps!
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thanx guys, is this the same if i keep my current full time job... AND do this little business in my free time?
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l o v e t o l e a r n

yes, you need to declare ALL your income... if you are PAYE then the tax man will already know about your income, but you'll need a self assessment form, where you can add the details of your P60 (showing the amount you have been paid, and the amount of tax you have already paid) and then add the income and expenses of your business (the expenses must be directly related to the business or a proportional representation of business/personal use) if your expenses are greater than your income, then it’s likely you’ll be entitled to a rebate.
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Hi gypsey,

You will need to fill out an annual tax return(SA) declaring you current earnings and you business on the side.

You will need to include the tax deducted from your employed income. The amount you earn from both incomes will be added and the personal allowance which is £6450 will be deducted from the total amount.

if the earnings of your business on the side is over £10,001 you will have to contribute to corporation tax. REMEMBER its the amount you turned over NOT the turnover - costs(that will give you gross profit!) as people presume.

Then you will have to pay tax on net profit if you have made a healthy profit.

And obviously you said you weren't going to earn over the £67,000 VAT threshold so you don't need to worry about that.

So there is quite a few taxes you will have to pay to become a self made millionaire, but it can be easy to fill the SA.

Good Luck in your business

If you need any more help or advice send me an email

Ray
raihan@bbkca.com
Chartered Accountant

thanx that is very informative!! hey you never know, i could become a millionnaire by making a few wedding invites!! ; ) well thanx for all your information so far... really appreciate it!!
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l o v e t o l e a r n

I just wanted to post a really useful website you might like: www.etsy.com

They have an "alchemy" part where you can put in a bid for specific projects e.g. designing and printing 125 wedding invites. Might be a good way to get started?

Caroline
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Caroline Wylie

www.virtuallysorted.com

www.SocietyOfVirtualAssistants.co.uk

oh great thanks for that!! just visited the website...

i really cant believe how helpful & friendly people are on here!!

didnt even expect one reply by the end of the week, never mind all this!!

thanks again guys : )
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l o v e t o l e a r n

You need to register self employed with hmrc within 13 weeks of starting trading. Do it via the website, it's very easy. -> HMRC website
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Also if your income is liable to be low apply for class 2 nic exemption, form also available on hmrc site.
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