Tax & National insurance

I'm no expert, James is and I'm sure he'll post after me ;-), but you have a personal tax allowance each year that makes up your tax free income. Over this amount you then pay tax at varying rates dependent on how much you earn. Whether your income is from your full time job or you part time business is irrelevany, it al goes in the same pot. So lets say your allowance is £4,615. You earn £20,000 from your full time job and your part time business profits are £5,000. Your total income is £25,000. Take off your allowance and you would pay tax on the remaining £20,385 IF you are in a PAYE scheme at work you will have already paid the tax for your work earnings but the business you will have to return a self-assesment at the end of the tax year. Like I said, I'm not an expert in this area and what I've said is probably wrong so I would advise waiting for James to post or going to yuor local tax office and ask them. I use them all the time if I have a question and they are incredibly helpful and actually advised me how to pay LESS tax!!! Cheers, Phil www.simplycfhost.co.uk - Top quality hosting from just £4.99 per month www.openmindmedia.co.uk - Simple, effective and powerful design solutions Call 0845 351 0413 today and find out how we can help your business succeed online.
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Cheers, Phil

www.openmindhosting.co.uk - Top quality hosting from just £4.99 per month
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AP You will pay Tax & NI as normal on your employed job. From the extra business you set up you will need to register with the Inland Revenue that you are self employed as well (within 3 months or there is a £100 fine). They will arrange for you to pay a flat rate of £2.05 per week for Class 2 NI. At the end of the tax year you will need to prepare accounts for your self employed job, allowing for expenses incurred in doing this job. You will end up with a profit figure (hopefully !!) and this will be taxed as additional earnings on top of your salaried job either at 22% or 40% depending on how much you earn. You will also need to pay class 4 NI on these profits as follows: <4,745 - 0% 4,745 to 31,720 - 8% > 31,720 - 1% Hope this helps Barr Stevenson Chartered Accountant http:/www.our-accountants.co.uk
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Barr Stevenson
Chartered Accountant
http:/www.jsaccountants.co.uk

See I was close! ;-) Cheers, Phil www.simplycfhost.co.uk - Top quality hosting from just £4.99 per month www.openmindmedia.co.uk - Simple, effective and powerful design solutions Call 0845 351 0413 today and find out how we can help your business succeed online.
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Cheers, Phil

www.openmindhosting.co.uk - Top quality hosting from just £4.99 per month
www.openmindmedia.co.uk - Simple, effective and powerful design solutions
www.openminddomains.co.uk - Domain registrations from £7.77 + vat pa

Just a quick point you could also consider setting up a limited company to do the online business and then control your own earnings through the company (assuming you make a profit). As a shareholder in a limited company you can declare dividends which are taxed at a maximum extra tax of 22.5%(if your a higher rate tax payer) and no NI. Probably best to discuss this possiblity with your accountant before you start and once you have prepare a business plan. Barr Stevenson Chartered Accountant http:/www.our-accountants.co.uk
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Barr Stevenson
Chartered Accountant
http:/www.jsaccountants.co.uk

listen to barr, his advice is sound.
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Brian Fin

www.businessbx.com

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