Being self employed and employed- tax

[dolled up]

Hi geeks. Quick post as I'm at work :/

Basically I've just found out that as I'm both self employed and employed I have to pay 20% tax on my employed job (I don't earn enough to pay tax) because I'm classed as having two jobs. Now this is going to mess my finances about a lot has anyone got any info on this and is there anyway around it? Ive just been told and It's really getting me down now )': just to add I've just completed my first year of business and haven't made any profit x

 

[shedunlop]

You can ask to have your employed job as your main job and self employed as the secondary. You would then do a self assessment every year and declare what you have earned both employed and self employed and that way you will get the tax allowance on the employed position and owe any tax for the self employed. If you know what I mean.

Ring your tax office my darling they won't bite and will help you sort this out.

 

[dolled up]

Thank you for your reply! It calmed me down last night turns out my bosses silly accountant got me worked up for nothing and hmrc have confirmed it to me that I only have to pay 20% tax on my self employed income just as I knew in the first place! Stressssss xx

 

[Steph86]

How annoying. Yes thats better and more sensible! Glad you have it sorted xx

 

[Kim Lawless]

Don't worry! As Sheila said, call the tax office, but basically both incomes will be added together, then you deduct what your outlay has been and you pay tax on the profit. As you've not been in budiness lobg, you might not have mFe a profit. Get yourself an accountant as they're worth their weight in gold.

 

[Becky_simon]

You can ask to have your employed job as your main job and self employed as the secondary. You would then do a self assessment every year and declare what you have earned both employed and self employed and that way you will get the tax allowance on the employed position and owe any tax for the self employed. If you know what I mean.

Ring your tax office my darling they won't bite and will help you sort this out.

So is it better to have the higher wage as your second job and the lower wage as your main job so you don't get taxed as much? Or am I completely missing something? You only get taxed on profit right?

 

[Kim Lawless]

So is it better to have the higher wage as your second job and the lower wage as your main job so you don't get taxed as much? Or am I completely missing something? You only get taxed on profit right?

Each person is allowed a personal allowance, so assuming that your business is run as a sole trader and not a Ltd company, it makes no difference. They'll just be added together and you'll be taxed over and above your personal non taxable allowance.

If it was a Ltd company, it would be taxed separately.

 

[Steph86]

So is it better to have the higher wage as your second job and the lower wage as your main job so you don't get taxed as much? Or am I completely missing something? You only get taxed on profit right?

No, your higher wage job is your main income. That is where you have your tax free allowance then get taxed accordingly.

There is no way around paying less tax-legitimately it is what it is. If you had your lower paid job as your main income, you would owe money come your tax return, if you earn over 9,600.

Your second job or self employed role is taxed at 20% (once your earning a profit from SE) xx

As kim said- come end of tax year all your earnings (main employment and 2nd job or SE) are added up alongside your business out goings, if this business is running a loss, no tax will br due. Unless for some reason your employer has paid your tax wrong. Xx

 

[Becky_simon]

No, your higher wage job is your main income. That is where you have your tax free allowance then get taxed accordingly.

There is no way around paying less tax-legitimately it is what it is. If you had your lower paid job as your main income, you would owe money come your tax return, if you earn over 9,600.

Your second job or self employed role is taxed at 20% (once your earning a profit from SE) xx

As kim said- come end of tax year all your earnings (main employment and 2nd job or SE) are added up alongside your business out goings, if this business is running a loss, no tax will br due. Unless for some reason your employer has paid your tax wrong. Xx

Thanks for your explanation So as soon as my business is making profit, il be taxed 20% on that?

 

[Becky_simon]

Ok sorry another question slightly irrelevant to topic- do I list the whole total on my credit card as an outgoing on my SA? Or do I just show when I have made my payments?

 

[the hairmobile]

Sounds like you need an accountant or some help with your accounts if you aren't sure what to do.

 

[Steph86]

Thanks for your explanation So as soon as my business is making profit, il be taxed 20% on that?

Yes. Thats right

Xx

 

[Steph86]

Ok sorry another question slightly irrelevant to topic- do I list the whole total on my credit card as an outgoing on my SA? Or do I just show when I have made my payments?

Yes, if that is an outgoing for your business. If you are doing it annually (total incomings/outgoings) on your SA. The loss can be carried forward to the next tax year til you have made a profit xx

 

[Becky_simon]

Yes, if that is an outgoing for your business. If you are doing it annually (total incomings/outgoings) on your SA. The loss can be carried forward to the next tax year til you have made a profit xx

When u say yes, are u referring to the total on my cc or do I just record and put through when iv made my payments to my cc? As its only an outgoing from my account once iv paid each month?

 

[Steph86]

When u say yes, are u referring to the total on my cc or do I just record and put through when iv made my payments to my cc? As its only an outgoing from my account once iv paid each month?

The total amount. That is out goings for your business- assuming it is all stock or SE related... If you only pay £30 per month off a £1,000 business debt, you will appear to make a profit before you actually have. Your business still owes you the £1,000 until you are in profit. Does that make sense? Xx

 

[Becky_simon]

The total amount. That is out goings for your business- assuming it is all stock or SE related... If you only pay £30 per month off a £1,000 business debt, you will appear to make a profit before you actually have. Your business still owes you the £1,000 until you are in profit. Does that make sense? Xx

Yes it does thank you