I am starting a home based business as well as i am a full time employee in London, how much tax do i pay?
buns asked:
My questions are;
1. Even though i pay tax on my full time job do i still have to pay more tax on my home business?
2. If yes, how much tax do i need to pay if i earn 300£ p/w?
3. Are there any other taxes i need to pay for being self employed and working home based?
I need to assess the financial situation before i jump into it. Please help. Thanks.
hullcitychat.com
My questions are;
1. Even though i pay tax on my full time job do i still have to pay more tax on my home business?
2. If yes, how much tax do i need to pay if i earn 300£ p/w?
3. Are there any other taxes i need to pay for being self employed and working home based?
I need to assess the financial situation before i jump into it. Please help. Thanks.
hullcitychat.com
Tags: Home Based Business, Home Business, Starting A Home Based Business
If your total income(employment and self-employment) is over £40,000 – £50,000(I forget which) then you will have to pay 40% if under then 23%
There is nothing you have to pay before you start but you should sort out National Insurance contributions & Liability insurance and you will need to go to your local tax office and register as Self-employed.
You need not worry about paying business tax for the first 12 months.
Business and Day job are seperate items as far as tax is concerned. You will pay tax on your day job in the normal way and pay tax on any profit from your business seperately.
Be careful about about working from home because there are two seperate community taxes. One is the basic commity tax but you might have to pay business tax on your home. It is best that you do not let too many people know that you are running a business from home.
Before anyone can answer this the following information is needed,
1. Total taxable employment income
2. Information of any Dividends and Savings (they are taxable remember)
3. Prodicted Turnover Of Self-employment
4. Costs relating to Self-employment.
Thre are a lot of wild guesses here.
You will pay tax on the profits from your business as well as class 2 NIC’s (about £2.50 pm). If your earnings from your main job are over about £42k, the tax wil be charged at 40%, below that, tax is at 20%.
It is really unlikely that you would be liable to business rates, assuming you are just using one room.